COMMISSION STAFF WORKING PAPER accompanying the REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT and THE COUNCIL on the follow-up to 2008 discharge – Replies to requests from the European Parliament  {COM(2010) 650}
Date: 2010-11-18
Institutions: European Commission
Subjects: economic and social cohesion, economic growth, economic recession, employment policy, job creation, knowledge economy, management of resources, report, stability pact

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EUROPEAN COMMISSION 

Brussels, 18.11.2010 
SEC(2010)1438 final 

COMMISSION STAFF WORKING PAPER 

accompanying the REPORT FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT and THE COUNCIL on the follow-up to 2008 discharge – Replies to 
requests from the European Parliament 

{COM(2010) 650} 

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TABLE OF CONTENTS 

INTRODUCTION...................................................................................................................... 1 

European Parliament resolutions on 2008 discharge ................................................................. 2 

Overriding concerns and targets to be achieved ............................................................... 3 

Reliability of the accounts and legality of the underlying transactions ............................ 4 

Information and framework of the DAS........................................................................... 7 

Revision of the Treaties: reform of the DAS.................................................................... 8 

Budgetary management .................................................................................................... 9 

Recoveries....................................................................................................................... 10 

Suspension of payments.................................................................................................. 12 

Annual summaries .......................................................................................................... 15 

National management declarations................................................................................. 18 

The Commission's internal control system ..................................................................... 20 

Interinstitutional debate on the current discharge procedure system.............................. 25 

Political responsibility and administrative responsibility at the Commission................ 26 

European Anti-Fraud Office (OLAF) ............................................................................. 32 

Revenue. ......................................................................................................................... 36 

The common agricultural policy..................................................................................... 38 

Cohesion ......................................................................................................................... 41 

Employment and social affairs ....................................................................................... 51 

Internal policies............................................................................................................... 55 

External actions............................................................................................................... 69 

Administrative expenditure............................................................................................. 88 

Special Report No 10/2008 on EC Development Assistance to Health Services in Sub-

Saharan Africa .................................................................................................. 89 

Special report No 12/2008 on the Instrument for Structural Policies for Pre-accession 

(ISPA), 2000-2006............................................................................................ 92 

Special report No 1/2009 on banking measures in the Mediterranean area in the context 
of the MEDA programme and the previous protocols...................................... 94 

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Special report No 2/2009 on the European Union's Public health Programme (2003-

2007): an effective way to improve health? ..................................................... 96 

Special report No 3/2009 on the effectiveness of Structural Measures spending on waste 
water treatment for the 1994-1999 and 2000-2006 programme periods .......... 97 

Special report No 4/2009 on the Commission's management of Non-State Actors' 

involvement in EC Development Cooperation................................................. 99 

Special report No 5/2009 on the Commission's Treasury Management....................... 103 

Special report No 6/2009 on European Union food aid for deprived persons: an 

assessment of the objectives, the means and the methods employed ............. 105 

Special report No 7/2009 on the management of the Galileo programme's development 

and validation phase ....................................................................................... 106 

Special report No 8/2009 on "Networks of excellence" and "Integrated projects" in 

Community Research policy: did they achieve their objectives?................... 108 

Special report No 9/2009 on the efficiency and effectiveness of the personnel selection 

activities carried out by the European Personnel Selection Office................. 114 

Special report No 10/2009 on information provision and promotion measures for 

agricultural products ....................................................................................... 117 

Special report No 11/2009 on the sustainability and the Commission's management of 

the LIFE-Nature projects ................................................................................ 118 

Special report No 12/2009 on the effectiveness of the Commission's projects in the area 
of Justice and Home Affairs for the western Balkans .................................... 120 

Special report No 13/2009 on delegating implementing tasks to executive agencies: a 

successful option?........................................................................................... 123 

Special report No 14/2009 entitled "Have the management instruments applied to the 

market in milk and milk products achieved their main objectives?".............. 126 

Special report No 16/2009 on the European Commission’s management of pre-

accession assistance to Turkey ....................................................................... 128 

European Development Funds...................................................................................... 130 

Requests to the Commission concerning the agencies ................................................. 137 

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INTRODUCTION 

This  Commission  Staff  Working  Paper  completes  the  Report  from  the  Commission  to  the 
European  Parliament  and  the  Council  on  the  Follow-up  to  2008  Discharge  {COM(2010) 
650}.  It  presents  in  detail  the  answers  to  the  238  specific  requests  made  by  the  European 
Parliament  in  its  Resolutions  forming  an  integral  part  of  its  Decisions  on  the  2008 
Discharges.1 

1 
requests 1-208 are all for the 2008 General Budget Discharge. 

For each specific request a reference is given to the relevant Parliament document. The references for 

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COMMISSION STAFF WORKING PAPER accompanying the REPORT 
FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT and 
THE COUNCIL on the follow-up to 2008 discharge – Replies to requests 
from the European Parliament 

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Overriding concerns and targets to be achieved 

1. 

(European  Parliament,  §§  1-5,  192)  -  The  European  Parliament  expects  a  strong 
statement from Commissioners Janusz Lewandowski and Algirdas Šemeta promising 
action in the areas of: Member State statements of assurance, proposals for tolerable 
risk  of  error,  simplification  and  transparency,  and  trust  funds  covering  external 
actions,  and  further  believes  that  this  must  cover  further  action  in  the  area  of 
corrections and recoveries, and internal control systems; 

Calls  on  the  Commission  to  prepare  and  submit  to  Parliament  a  new  Agenda  for 
2010 onwards, providing for an acceleration in the reduction of error rates so as to 
ensure that a further 20 % of the budget can be given a 'green' classification from the 
Court of Auditors by 2014,  

Calls on the Commission President to inform Parliament about how the Commission 
will operate in a more coordinated way, so as to address remaining weaknesses in the 
financial systems and significantly reduce error rates as indicated above. 

Commission's response: 

The  Commission  agrees  to  do  its  utmost  for  accelerating  the  reduction  of  error 
rates so as to contribute as much as possible to increasing 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 of the respective percentages 
of  the  various  colours  (red,  yellow,  green)  will  depend  on  a  number  of  factors, 
notably the effect of ongoing action plans, the effect of the 2007-2013 legislation, 
the  structure  of  the  Court's  annual  report  as  well  as  the  progress  on  the 
discussions on the concept of tolerable risk of error. 

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  clear  definition  of  the  risk  of 
error  implied  by  current  legislative  provisions  and  the  costs  of  control  in  a 
tolerable  risk  approach  (in  line  with  the  proposals  adopted  on  26  May  2010  for 
levels of tolerable risk of error for the policies 'Rural development' end 'Research, 
energy and transport' (COM(2010)261), European Trust Funds, the management 
assurance  from  the  Member  States,  national  declarations,  cooperation  with 
supreme audit institutions and national Parliaments; and recoveries and financial 
corrections.  

The  Commission's  central  services  are  already  actively  overseeing  all  services' 
control activities, through the two compulsory annual exercises where each service 
identifies  its  main  risks  (within  the  framework  of  the  establishment  of  the 
Management  Plan)  and  where  it  justifies  the  reasons  underlying  the  financial 
assurance  it  provides  (in  the  Annual  Activity  Report).  The  central  services' 
oversight  has  been  progressively  strengthened  over  the  past  few  years,  with  the 
performance  of  a  peer  review  process  for  selected  AARs  and  the  issuing  of  more 
focussed instructions for the AARs. 

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Reliability of the accounts and legality of the underlying transactions 

2. 

(European  Parliament,  §  7)  -  Consideration  should  be  given  to  establishing  a 
Community pension fund in order to externalise the financial commitments vis-à-vis 
staff.  

3. 

4. 

Commission's response: 

The  Commission  has  previously  analysed  this  issue.  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. 

(European  Parliament,  §  8)  -  The  Commission  should  address  the  Court's 
observations  regarding  weaknesses  identified  in  certain  bodies  and  Directorates-
General of the Commission in the accounting system for invoices/cost statements and 
pre-financing which put at risk the quality of financial information.  

Commission's response: 

The  Commission  has  continued  with  its  accounting  quality  project  which  has 
improved the underlying accounting data used in preparing the 2009 accounts. 

(European Parliament, §§ 12 & 13) - The European Parliament regrets that the DAS 
still  remains  qualified  for  Structural  measures.  It  acknowledges  that  in  its 
Communication  on  the  impact  of  the  action  plan  to  strengthen  the  Commission’s 
supervisory  role  under  shared  management  of  structural  actions,  the  Commission 
indicates  that  the  steps  outlined  in  it  have  been  completed;  it  notes  that  the 
preliminary  results  show  an  error  rate  in  expenditure  of  around  5  %  for  the  2007-
2013 period; it awaits, however, the wider benefits to cohesion policy, where there 
are still very large problems despite the progress made by the Commission towards a 
more efficient use of EU funds and the overall control environment.  

Commission's response: 

The Commission is taking the requested action. It considers that in the framework 
of the Action Plan it has made and continues to make major steps in improving the 
management  and  control  in  structural  actions.  The  impact  report  on  the  Action 
plan  to  strengthen  its  supervisory  role  in  the  shared  management  of  structural 
actions  (COM(2010)52)  adopted  in  mid  February  2010  demonstrates  that  these 
steps  have  indeed  brought  important  results.  This  report  identifies  3  first  positive 
impacts  of  the  action  plan:  first,  audit  results  on  the  implementation  2007-2013 
programmes  show  a  clear  decrease  of  the  estimated  error  rate.  Although  it  is  an 
encouraging indicator about the effectiveness of the control framework, this result 

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must be interpreted in a prudent way since the population audited covers payments 
made  at  an  early  stage  of  the  programming  period  until  31  May  2009  from  15 
Member  States  which  had  declared  expenditure  by  that  time.  Second,  the 
Commission audit activity reveals an expected residual risk of error of programmes 
at closure of 1994-1999 period substantially reduced. Finally, the increased level of 
financial corrections  for  2008-2009  shows the Commission's  resolute  response to 
the  detection  of  systems  deficiencies  in  Member  States  and  provides  a  deterrent 
effect on Member States from any future mismanagement of EU funds. 

However the full effect of the Action plan on the error rate in Cohesion policy may 
only  be  seen  later  on  in  the  2007-2013  period  when  the  impact  of  the  new 
regulatory  framework  and  all  simplification  measures  adopted, 
including 
simplified costs, may be seen. The problems identified by the Court are exclusively 
related  to  the  2000-2006  period  and  the  Commission  has  imposed  important 
corrections in all cases where this was required. 

5. 

(European Parliament, §§ 12, 14 & 15) - As regards Research, Energy and Transport 
and  External  aid,  development  and  enlargement,  the  Commission  Action  Plan 
towards an Integrated Internal Control Framework should already bring benefits and 
the  Commission  should  be  able  to  provide  a  series  of  indicators  and  descriptors  to 
measure  the  impact  of  this  Action  Plan.  The  European  Parliament  notes,  however, 
the  Court’s  observation  that  it  is  not  yet  possible  to  determine  whether  the  Action 
Plan  has  had  a  measurable  impact  on  the  supervisory  and  control  systems  and 
ultimately on the regularity of transactions (point 2.28 of the 2008 Annual Report), 
and  urges  the  Commission  to  take  appropriate  action  to  ensure  that,  for  the  2009 
discharge, indicators are in place to measure the impact of that Action Plan.  

Commission's response: 

The Commission fully supports the observations of the Parliament. As reported in 
the  Communication  on  the  impact  of  the  Action  Plan  COM  (2009)  43,  the 
implementation  of  the  Action  Plan  was  completed  by  the  end  of  2008.  The 
Communication  contained  a  full  range  of  indicators  and  key  supporting 
information  to  demonstrate  the  impact  of  the  initiative.  However,  it  pointed  out 
that  it  was  not  possible  to  dissociate  the  impact  of  the  action  plan  from  that  of 
other  initiatives  to  improve  control  (including  the  follow-up  of  reservations  in 
Annual Activity Reports and the impact of new period legislation). 

Significant actions from the Action Plan such as Tolerable Risk and simplification 
are  being  carried  forward  under  separate  initiatives.  The  overall  indicator  of  the 
impact of these initiatives and any further action from the Commission will be the 
annual declaration of assurance (DAS) from the Court of Auditors. 

6. 

(European  Parliament,  §  16)  -  The  Commission  should  put  forward  proposals  for 
shortening the periods involved in the discharge process, so that the vote in plenary 
can be held in the year following the financial year under review.  

Commission's response: 

The  time  limits  for  the  discharge  procedure  are  set  out  in  the  Financial 
Regulation. In practical terms, a reduction of the time needed would require that 

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the Court of Auditors bring forward the publication of its annual report, and that 
the  European  Parliament  (Committee  on  Budgetary  Control)  also  shorten  its 
proceedings. 

Therefore,  the  Commission  considers  that  this  request  should  be  first  discussed 
between the institutions concerned. 

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Information and framework of the DAS 

The European Parliament has made no specific request to the Commission. 

Commission's response: 

No reply necessary. 

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Revision of the Treaties: reform of the DAS 

The European Parliament has made no specific request to the Commission. 

Commission's response: 

No reply necessary. 

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Budgetary management 

7. 

(European Parliament, §§ 26-27) - The European Parliament welcomes the fact that 
automatic de-commitment should prevent problems in the current funding period but 
remains  concerned 
the  highest  proportion  of  outstanding  budgetary 
commitments ("RAL") is related to the cohesion area associated with the lack of any 
de-commitment procedure for the 2000-2006 period; 

that 

Asks the Member States to transmit the remaining compliance assessment documents 
of the Management and Control Systems as soon as possible and in sufficient quality 
in order to avoid further delays regarding the interim payments and a further increase 
of outstanding budgetary commitments.  

Commission's response: 

is 

taking 

the  requested  action.  The  regulations 

limit 
The  Commission 
reimbursements  before  closure  to  95%  of  the  EU  contribution  and  give  the 
Member States 15 months after the end of eligibility to submit the final payments 
claims. Therefore, the RAL on the 2000-2006 period is limited by the regulations. 
It is expected that closure payments will start in 2010 and continue into 2011. 

8. 

(European Parliament, § 28) - The European Parliament calls on the Commission to 
provide  Parliament with an  overview  of budgetary support granted, by country and 
by fund, for the years 2005 to 2009.  

Commission's response: 

The requested action has been taken. The Commission has reported these figures 
in the Annual Activity Reports of the Structural Funds Directorates-General. 

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Recoveries 

9. 

(European Parliament, § 29) - The EP remains concerned about the problems which 
subsist regarding irregularly disbursed Community funds and the poor quality of the 
information supplied on the correction mechanism applied at Member State level; it 
draws  attention  to  the  urgent  need  to  aim  for  a  100  %  recovery  rate  in  respect  of 
funds that have been falsely issued.  

Commission's response: 

The Commission is taking the recommended action. For Structural Funds, it has 
clearly improved the level of its financial correction and has reported quarterly to 
the  Parliament  on  financial  corrections  imposed  by  the  Commission  since  2008. 
The Commission follows up all cases of detected errors and endeavours to recover 
all irregular amounts. 

The Commission is taking steps to improve the quality of information provided by 
Member States on recoveries. It has analysed the information provided in previous 
years and made appropriate recommendations where needed. It considers that the 
data for 2009 submitted by the Member States to the Commission in the 1st half of 
2010 are of much better quality than in previous years. These data are published in 
note  6  to  the  Commission's  final  annual  accounts.  In  the  framework  of  its  2008 
Action Plan the Commission has carried out audits of Member States' systems for 
withdrawals  and  recoveries  in  19  Member  States.  The  remaining  Member  States 
will be audited in 2010. The Commission will continue its efforts to improve even 
further the quality and completeness of information available on recoveries from 
Member States. 

10. 

(European  Parliament,  §  31)  -  Calls  on  the  Commission  to  enhance  the  efficiency 
and effectiveness of multiannual recovery systems, including at Member State level, 
and  to  consolidate  data  on  recoveries  and  financial  corrections  in  order  to  provide 
reliable  figures  which  can  be  compared  between  the  various  policy  areas  and  fund 
management  procedures;  calls  on  the  Commission  to  report  to  Parliament  in  the 
notes accompanying the annual accounts, so that an overview can be obtained.  

Commission's response: 

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  is  of  a  much  better 
quality.  In  the  framework  of  its  2008  Action  Plan  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. 

11. 

(European  Parliament,  §  32)  -  Requests  the  Commission  to  present  complete  and 
reliable figures for financial corrections and, in particular, recoveries, specifying the 
Member State concerned, the exact budget line and the year to which the individual 

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recoveries relate (as already specified in the Discharge Report for 2006), given that 
any other presentation makes serious control impossible;  

Commission's response: 

The  Commission  is  taking  the  requested  action.  It  is  taking  steps  to  improve  the 
quality of information provided by Member States on recoveries. It provided such 
information in the Annual Report on the Implementation of the Structural Funds 
(SEC(2009)1495  of  30/10/2009  covering  the  financial  year  2008),  including  a 
breakdown per Member State and per Fund. Because of the multi-annual nature 
of structural programmes and the fact that the control procedures may last several 
years,  it  is  impossible  to  identify  the  exact  year  to  which  individual  recoveries 
relate.  The  Commission  however  provides  figures  for  the  year  in  question  and 
cumulative for the whole period. 

As regards agriculture, the corrections charged by the Commission to the Member 
States can be found in the respective conformity decisions which are published in 
the Official Journal. Information on Member States' recovery of undue payments 
from the financial beneficiaries is published in the Annual Activity Report. 

12. 

(European Parliament, § 33) - Recalls its demand that the Commission produce an 
annual fund-by-fund grading per Member State, specifying the error rate established 
– both with and without the impact of corrective mechanisms – and that it forward 
this to Parliament in an active, transparent and easily accessible manner.  

Commission's response: 

The Commission already provides detailed information and a classification of the 
individual member States systems in the Annual Activity Reports of DG Regional 
Policy, DG Employment, Social Affairs and Equal Opportunities and Agriculture. 
For Structural Funds, for the period 2007-2013, the regulations require the Audit 
Authorities  to  provide  the  Commission  with  annual  control  opinions  and  error 
rates, as a result of their audits, which will be based on random statistical samples. 
Neither  the  Commission  nor  the  Court  compile  an  error  rate  by  fund  and  by 
Member  state  as  this  is  not  required  by  the  applicable  legal  framework.  As  the 
audits  performed  by  Member  States  audit  bodies  are  partially  representative  and 
partially  risk  based,  and  by  the  Commission  risk-based,  error  rates  cannot  be 
produced  or  considered  representative  of  the  programmes.  See  also  reply  above 
under  point  11  to  Parliament's  request  in  paragraph  32  of  the  discharge 
resolution, which outlines the steps taken to improve the quality of information in 
the Cohesion area and confirms that in agriculture information on Member States' 
recovery of undue payments from the final beneficiaries is published in the Annual 
Activity Report of the Director-General. 

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Suspension of payments 

13. 

(European Parliament, § 35) - The European Parliament points out the importance of 
the  final  decisions  and  corrective  measures  taken  with  the  aim  of  removing  EU 
funding  from  expenditure  which  has  not  been  carried  out  in  conformity  with  EU 
legislation, and restates its call for the precise budget heading and the year to which 
individual recoveries relate to be specified.  

Commission's response: 

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 2010, 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. 

14. 

(European  Parliament,  §  37)  -  Draws  attention  to  the  example  of  Greece,  where 
significant  financial  corrections  brought  about  by  Commission  decision  appear  to 
have resulted in better performance in some areas; invites the Commission to identify 
these  areas  and  recalls  that,  as  regards  the  Integrated  Administration  and  Control 
System  (IACS),  no  evidence  has  been  provided  that  the  action  plan  set  up  and 
implemented by the Greek authorities was effective (2008 Annual Report, point 2.5).  

Commission's response: 

The requested action has been taken.  

In 2006, the Greek authorities committed themselves to the implementation of an 
action  plan  consisting  of  specific  corrective  measures  and  milestones,  including 
regular reporting on progress made, to put in place a fully operational Integrated 
Administration and Control System (IACS) by 31 December 2008. 

As of claim year 2006, the Greek  authorities introduced a new procedure for  the 
submission of claims for the single payment aid scheme in order to ensure security 
of data and to protect it from unauthorized modifications. 

In  order  to  improve  their  timing,  quality  and  reporting  of  results,  the  paying 
agency (OPEKEPE) (regional) staff has gradually taken over the responsibility for 
the classical on-the-spot checks from the Nomi. In addition, Greece increased the 
level of on-the-spot checks to 8% in claim year 2007 and 10% in claim year 2008. 

In  2008,  the  main  remaining  outstanding  issue  of  the  IACS  action  plan  was  the 
creation of a new LPIS-GIS to be operational by 31 December 2008. Consequently, 
DG AGRI has continued to monitor closely the use by the Greek authorities of the 

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new  operational  LPIS-GIS.  To  this  end,  the  Directorate-General  for  Agriculture 
and Rural Development (DG AGRI) has carried out three audit missions to Greece 
in 2009 as well as two audit missions in 2010. 

A  new  Land  Parcel  Identification  System  Geographical  Information  System 
(LPIS-GIPS) has been used for the first time in the 2009 claim year. Greece has 
encountered  certain  problems  in  this  first  year  of  application,  in  particular  the 
missing digitisation by farmers of the areas claimed. 

Following  adoption  of  Regulation  No  691/2010,  giving  Greek  farmers  until  31 
January  2010  (15  February  2010  for  the  Aegean  islands)  to  digitise  the  parcels 
that were already alphanumerically included in the claim lodged by 15 May 2009, 
overall 98% of the claims and 99.5% of parcels claimed have been digitised within 
this deadline and can in principle be paid. 

The  first  payments  for  2009  claim  year  were  foreseen  for  mid  March  2010  for 
farmers for which the checks did not reveal anomalies requiring further follow-up. 

The implementation of the IACS in Greece will continue to be closely monitored by 
DG AGRI and residual problems will continue to be addressed in the context of the 
conformity clearance procedure. 

For the European  Social Fund  (ESF), there are low error rates  observed for the 
2000-2006  programming  period.  Audits  conducted  up  to  end  June  2010  for  the 
2000-2006 and 2007-2013 periods reveal the absence of serious or systemic issues. 
Therefore emphasis is on monitoring the effective functioning of the system. 

15. 

(European Parliament, §§ 38-39) - Believes that, in the case of recurrent reserves for 
expenditure programmes in a particular Member State, suspension of payments, as a 
means of pressure, will contribute to greater involvement of the Member States in the 
correct use of EU funds received; 

Calls on the Commission to simplify the rules and apply the existing legislation on 
suspension of payments wherever necessary, and to inform Parliament, the Council 
and the Court of Auditors in good time concerning suspensions of payments and their 
results.  

Commission's response: 

The  Commission  is  taking  the  requested  action.  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 2010, 10 
suspension decisions have been adopted by the Commission in 2008 and 7 in 2009. 
Moreover  the  Commission  will  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.  Information  on 
suspension  of  payments  will  be  reported  in  the  Annual  Activity  Reports.  For 

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agriculture,  a  specific  mechanism  for  suspending  payments  in  such  cases  was 
introduced in 2007 (Article 17a of Council Regulation (EC) No. 1290/2005). 

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Annual summaries 

16. 

(European  Parliament,  §§  40-42)  -  The  European  Parliament  stresses  the  need  to 
strengthen  the  role  of  annual  summaries  in  the  upcoming  review  of  the  Financial 
Regulation as well as to improve the quality, homogeneity and comparability of the 
data provided by Member States so as to ensure their added value in the field of the 
control of EU funds.  

Commission's response: 

Overall,  the  quality  of  the  2009  annual  summaries  improved.  23  Member  States 
complied  with  the  minimum  requirements  regarding  the  information  to  be 
provided,  whereas  4  Member  States  did  not  comply  and  were  asked  to  submit 
revised  summaries.  15  Member  States  provided  an  overall  analysis  of  the 
information provided, and 9 (compared to 7 for the 2008 summaries) furnished a 
statement of assurance following the Commission's recommendation. 

For Agriculture, the ten Member States with more than one Paying Agency were 
required to draw up annual summaries, all these Member States complied with this 
obligation  and  submitted  an  annual  summary  to  the  Commission  (though  in  one 
case  it  will  be  subject  to  an  addendum  due  to  outstanding  documents  from  the 
certification  bodies).  For  the  remaining  Member  States  with  only  one  Paying 
Agency,  the  Statement  of  Assurance  serves  the  same  purpose  as  the  annual 
summary. In conclusion, the evaluation of the annual summaries and statements 
of  assurance  suggests  that  the  Member  States  have  complied  with  their  legal 
obligations  and  largely  followed  the  Commission  guidelines.  Compared  to  last 
year, the quality of the analysis has further improved. 

The  Commission  proposal  for  the  triennial  revision  of  the  Financial  Regulation 
was  adopted  in  May  2010.  The  Commission  has  reinforced  the  legal  basis  in  the 
Financial  Regulation  for  the  annual  summaries  by  proposing  to  obtain  annual 
management declarations of assurance from accredited management bodies in the 
Member States, accompanied by an independent audit opinion. The audit opinion 
is expected to help in improving the quality of the data submitted. 

The Commission will carry out an evaluation of annual summaries after 3 years of 
existence by the end of 2010. It will also issue guidelines on value-added features 
of the voluntary national declarations. 

17. 

(European  Parliament,  §§  43-45)  -  Welcomes  the  information  provided  to 
Parliament by the Commission on the annual summaries received in 2009 and calls 
on  the  Commission  to  make  all  annual  summaries  of  all  Member  States  public  in 
order to enhance transparency and public accountability; invites the Commission, on 
the basis of the annual summaries received, to analyse the strengths and weaknesses 
of  each  Member  State’s  national  system  for  the  administration  and  control  of  EU 
funds; 

Considers  that  it  is  of  the  utmost  importance  for  the  Commission  to  report  on  the 
quality  of  those  annual  summaries  and  to  add  value  to  the  process  by  identifying 

EN 

15 

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common problems, possible solutions or best practices, using this information in its 
supervisory role; 

Considers  that  a  comparative  analysis  should  be  forwarded  to  Parliament,  the 
Council and the Court by late 2010 and should be made public soon thereafter.  

Commission's response: 

The  Commission  is  taking  the  requested  action.  It  considers  that  annual 
summaries can be a means for improving accountability in shared management if 
its guidelines are followed by Member States. 

The  Commission  has  provided  information  on  the  annual  summaries  in  its  2009 
Report  on  the  implementation  of  the  Action  Plan  (COM(2009)42)  and  in  the 
Annual  Activity  Reports  of  the  Directorates  General.  The  Commission  has  also 
asked  for  the  Member  States'  approval  to  transmit  the  annual  summaries  to  the 
European Parliament. 

The  Commission  revised  its  guidance  on  annual  summaries  and  presented  it  to 
into  account 
Member  States 
recommendations of the study commissioned by the European Parliament, such as 
emphasizing the value-added elements and reducing redundant information. 

in  October  and  December  2009, 

taking 

Finally, while significant progress has been made, the Commission considers that 
the current added value of annual summaries is limited and that a stronger legal 
base  is  necessary  to  make  further  progress.  The  Commission  is  commissioning  a 
study to evaluate the added value of annual summaries after three years and in this 
exercise it will indicate the extent of their usefulness over this period. The triennial 
revision  of  the  Financial  Regulation  in  2010  –  on  which  the  Parliament  will  be 
involved by Co-decision procedure - could provide an opportunity for this. 

18. 

(European  Parliament,  §  46)  -  Calls  on  the  Commission  to  ensure  that  the  general 
Guidance  Note  concerning  the  annual  summaries  requires  a  uniform  methodology 
and analytical scope from all Member States; notes the intention of the Commission 
to revise its Guidance Note in such a way as to simplify the reporting requirements 
and  provide  more  guidance  on  good  practice; requires  the  Commission  to  take  this 
opportunity to include in the Guidance Note a framework for national management 
declarations for those Member States that decide to introduce them and to develop its 
incentive-based approach.  

Commission's response: 

The  Commission  is  taking  the  requested  action.  It  is  making  every  effort  to 
improve the added value of annual summaries under the current legal framework. 
A  revised  note  was  discussed  with  the  Member  States  in  the  Coordination 
Committee of the Funds (COCOF) meetings of October and December 2009. The 
revised guidance note takes on board some of the recommendations formulated in 
the  study  of  5  June  2009  on  the  Annual  Summaries,  which  was  presented  to  the 
Parliament (Cocobu) on 3 November 2009.  

EN 

16 

   EN 

 
 
The  Commission  has  simplified  the  exercise  by  taking  out  information  received 
from  other  reports  and  in  addition,  has  build  up  the  part  on  the  overall  analysis 
and explained the incentives to the Member States for using this option, as well as, 
the statement of assurance.  

The Commission agrees with the European Parliament that national declarations 
increase awareness and responsibility concerning the financial management of EU 
funds  at  the  central  government  level  and  demonstrate  an  acceptance  of 
accountability for these funds. But this can hardly be part of a guidance document 
without stronger legal basis. The revision of the Financial Regulation provides an 
opportunity  to  strengthen  the  legal  framework  for  the  annual  summaries  by 
including the requirement, among others, for a declaration of assurance from the 
Member States. 

For  Agriculture  the  guideline  regarding  the  establishment  of  the  annual 
summaries is revised (for clarification purposes) on an annual basis in the light of 
the  experiences  of  the  previous  exercise.  Moreover,  the  guideline  is  further 
explained on the occasion of an annual conference with the directors of the paying 
agencies and the coordinating bodies. 

EN 

17 

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National management declarations 

19. 

(European Parliament, §§ 47-51) - The European Parliament recalls its demand for 
the introduction of national management declarations (paragraph 32 of its resolution 
of 23 April 2009 accompanying its decision on discharge for 2007); 

invites  the  Commission  to  use  the  new  wording  of  Article  317  to  introduce 
mandatory national management declarations as soon as possible;  

calls  on  the  Commission  to  propose,  within  the  framework  of  the  review  of  the 
Financial Regulation, the obligation for Member States to issue national management 
declarations  signed  at  an  appropriate  political  level  and  certified  by  their  national 
supreme  audit  body,  as  a  means  of  administrative  relief  as  well  as  improved 
administration of funds under shared management.  

Commission's response: 

The  Commission  proposal  for  the  triennial  revision  of  the  Financial  Regulation 
(FR) was adopted in May 2010. The Commission intends with the revision of the 
FR  to  optimise  Member  States'  contribution  to  assurance  by  introducing  a 
requirement  for  annual  management  declarations  of  assurance,  accompanied  by 
an  independent  audit  opinion  thereon.  The  declaration  should  be  signed  by  the 
body accredited by the Member State to manage the funds and be complemented by 
information  on  error  rates  per  fund  (summary  of  available  audits  and  controls). 
This proposal should reinforce the responsibility of the bodies actually managing 
Union funds under shared management. 

National  declarations,  signed  at  political  level,  are  not  part  of  the  Commission's 
proposal. The Commission will however continue to encourage Member States to 
work  on  voluntary  political  assurance  statements,  covering  all  EU  funds  they 
receive,  documenting  the  controls  and  assessing  the  effectiveness  of  their 
management  and  control  systems.  It  will  also  issue  guidelines  on  value-added 
features of the voluntary national declarations. 

20. 

(European Parliament, § 53) - Proposes that national audit bodies, in their capacity 
as  independent  external  auditors,  and  with  due  regard  for  international  audit 
standards, issue national audit certificates for the management of EU funds, calls on 
the Commission to examine the possibility of modifying and adapting the discharge 
timetable in order to allow for timely audits of the national management declarations 
by the (national) external auditors.  

Commission's response: 

The Commission is envisaging to propose that the annual management declaration 
of  assurance  from  the  managing  body  in  the  Member  State  forming  part  of  the 
annual  summary  should  be  accompanied  by  an  independent  audit  opinion.  (See 
letter Šemeta-Lewandowski to the Committee on Budgetary Control of 2.3.2010) In 
order  for  the  Commission  to  take  them  into  account  for  its  own  annual  activity 
reports  reporting,  these  summaries  must  arrive  before  March  of  the  year  N+1. 
There is therefore no necessity to review the discharge timetable. 

EN 

18 

   EN 

 
 
 
21. 

(European Parliament, § 54) - Is deeply concerned about the proven manipulation of 
financial  statistics  and  tax  evasion  in  Greece;  notes  the  generalised  public-sector 
corruption  throughout  the  administration,  including  in  public  procurement,  as 
recognised by the Prime Minister of Greece; draws attention to the significant effect 
in  terms  of  costs  that  this  has  on  Greece's  budget;  calls  on  the  Commission  to 
investigate  as  a  matter  of  priority  the  circumstances  under  which  the  Commission 
was  provided  with  and  effectively  accepted  wrong  macroeconomic  data  for  such  a 
long period of time.  

Commission's response: 

The requested action has been taken. Investigations have been carried out by the 
Commission  and  its  results  reported  in  the  Commission  Report  on  Greek 
Government Deficit and Debt Statistics of 8 January 2010 (COM (2010) 1 final). 

Greece  has  started  addressing  the  issues  raised  in  the  Commission  Report  of  8 
January  2010,  with  the  adoption  of  a  new  law  on  the  Hellenic  Statistical  System 
including  the  creation  of  a  new  statistical  authority  (ELSTAT)  in  order  to 
guarantee the independence and integrity of statistics. 

EN 

19 

   EN 

 
The Commission's internal control system 

22. 

(European  Parliament,  §§  55-57)  -  Voices  its  concern  at  the  Court's  repeated 
criticism  of  the  inadequate  quality  of  controls  in  Member  States  and  considers  it 
detrimental  to  the  image  of  the  EU  if  individual  Member  States  are  able  to  apply 
different control standards; 

Notwithstanding  the  progressive  improvement  in  the  DAS  since  2003  (56  %  of 
expenditure being given positive audit opinions by the Court in 2008 compared to 6 
% in 2003), remains concerned by the Court’s assessment that it is not yet possible to 
determine whether the Action Plan has had a measurable impact on the supervisory 
and  control  systems,  and  that  the  Commission  is  not  able  to  demonstrate  that  the 
steps taken by it to improve supervisory and control systems have been effective in 
mitigating the risk of error in some areas of the budget (points 2.28 and 2.33 of the 
2008 Annual Report); 

Calls on the Commission to continue to present regular assessments of the integrated 
internal control system, and calls for even better and more explicit coverage – in the 
annual activity reports and the synthesis report – of the functioning of Commission 
departments’ and Member States’ shared-management systems, as is already done by 
the Commission’s DG for Regional Policy in its annual activity report.  

Commission's response: 

The  Commission  is  continuously  improving  the  standing  instructions  for  the 
setting  up  of  its  services'  Annual  Activity  Reports,  namely  those  regarding  the 
building blocks of their assurance statement.  

The  latest  Annual  Activity  Reports  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. 

Most  of  the  Commission  services  already  provide  in  their  annual  activity  reports 
clear  information  about  the  effectiveness  of  their  and  implementing  partners' 
internal control systems, and about identified weaknesses and remedial measures 
underway. 

Besides Directorates-General for Regional Policy, for Employment, Social Affairs 
and Equal Opportunities, and Agriculture and rural development provided detailed 
information and a classification of the individual Member States' systems in their 
2009 Annual Activity Reports. 

The Commission fully implemented a peer review system that allows its services to 
better address weaknesses identified and to do it in time and at the adequate level.  

The  Synthesis  of  the  Commission's  management  achievements  addresses  key 
management issues identified in the Annual Activity Reports and define the lines 
of action. It also reports on the progress achieved on the new and ongoing actions 
identified in former Synthesis Reports to address major crosscutting management 
issues and it gives an overview on the reservations entered during the last 5 years. 

EN 

20 

   EN 

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

23. 

(European  Parliament,  §§  58-60)  -  Draws  attention,  in  this  context,  to  the 
importance  of  Action  10  of  the  above-mentioned  Action  Plan,  which  proposes 
making  an  "analysis  of  the  costs  of  controls",  in  view  of  the  "need  to  reach  an 
appropriate balance between the costs and benefits of controls"; 

Calls  on  the  Commission  to  carry  out  in  2010  a  more  complete  and  exhaustive 
evaluation  of  the  resources  given  over  to  control  systems  in  the  areas  of  research, 
energy, transport, rural development, external aid and administrative expenditure, as 
requested  by  Parliament  in  its  previous  resolutions  accompanying  the  discharge 
decisions; 

Believes that this will be a crucial tool for assessing what future improvements can 
be  achieved  and  at  what  cost,  as  recommended  by  the  Court  in  its  2008  Annual 
Report (point 2.35(a)), and for achieving progress on the question of tolerable risk of 
error.  

Commission's response: 

On 26 May 2010, the Commission adopted its proposals for levels of tolerable risk 
of  error  (TRE)  for  the  policies  'Research,  energy  and  transport'  and  'Rural 
development' (COM(2010) 261). The proposals are based on an examination of the 
relationship between the cost of controls and error rates and include an evaluation 
of resources related to control systems. 

The  Commission  will  evaluate 
the  control  resources  for  "Administrative 
expenditure"  before  the  end  of  2010  and  for  "External  aid,  development  and 
enlargement" in the beginning of 2011 when presenting concrete TRE proposals 
for these policy areas. 

24. 

(European  Parliament,  §§  61-66)  -  The  European  Parliament  takes  note  of  the 
above-mentioned  Commission  communication of 16 December 2008 on a common 
understanding  of  the  concept  of  tolerable  risk  of  error  as  a  sound  methodological 
basis  for  an  economic  analysis  of  acceptable  levels  of  risk;  recalls  its  doubts 
concerning the figures provided by the Member States on control costs and calls on 
the  Commission  to  update  and  complete  the  figures  used  in  the  communication; 
invites the Commission to address all weaknesses and shortcomings identified by the 
Court of Auditors, and underlines the following: 

– 
the  definition  of  a  possible  tolerable  risk  of  error  is  only  one  of  several 
elements  to  be  explored  with  a  view  to  improving  financial  management  in  the 
European Union; other elements are (1) better use of existing control systems, (2) an 
increase  in  what  are  generally  very  low  control  costs,  (3)  simplification  and  (4) 
concentration; 

– 
the  quality  of  the  information  available  from  the  Member  States  is  currently 
not sufficient as a basis for the establishment and approval of a tolerable risk of error; 

EN 

21 

   EN 

 
 
 
 
 
– 

the Council’s position on the question is not known; 

Calls  on  the  Commission  to  provide  a  detailed  analysis  of  the  shortcomings  and 
weaknesses identified by the Court of Auditors , especially regarding the quality of 
the data available from the Member States; 

Recalls  Action  4  of  the  above-mentioned  Action  Plan,  which,  in  line  with  the 
recommendations of Parliament, proposes the initiation of "interinstitutional dialogue 
on  risks  to  be  tolerated  in  the  underlying  transactions";  notes,  however,  that 
implementation of this action has scarcely begun; 

Considers,  therefore,  that  the  Commission,  in  line  with  the  principles  of 
proportionality and cost efficiency (value for money) of the control systems, should 
evaluate the relationship between, on the one hand, the resources available for each 
particular  policy,  and,  on  the  other,  the  part  of  those  resources  dedicated  to  the 
control systems broken down by area of expenditure; 

Asks  the  Commission  to  identify  areas  of  high  political  sensitivity  (with  high 
"reputational  risk")  where  a  quality  approach  to  rates  of  error  (rather  than  an 
economic one) should be adopted; 

Considers  that  the  volume  of  Union  funds  at  risk  because  of  errors  should  also  be 
taken into consideration when a tolerable error rate is determined.  

Commission's response: 

in 

that 

the  data  published 

The  Commission  recalls 
the  Commission 
Communication  of  16  December  2008  were  provided  by  the  Member  States  and 
that a sensitivity analysis was carried out to cater for a possible underestimation of 
control  costs  by  the  Member  States.  New  data  for  Rural  Development  were 
presented in the Communication "More or less control. Striking the right balance 
between the administrative costs of control and the risk of error" of 26 May 2010 
(COM(2010)  261).  This  Communication,  which  also  included  TRE  proposals  for 
Research,  energy  and  transport,  should  form  the  basis  to  re-launch  the  inter-
institutional discussion and agree on concrete TREs for those policy areas.  

The Commission also believes that this Communication addresses the weaknesses 
and  shortcomings  previously  identified  by  the  Court  of  Auditors.  However,  while 
the  Commission  fully  acknowledges  the  existence  and  importance  of  additional 
qualitative factors such as the deterrent effect of controls or the reputational risk 
of  an  institution,  it  considers  that  it  is  up  to  the  Legislative  Authority  to  take 
account of the political imperatives and inherent risk when deciding on the level of 
error to tolerate on the basis of the Commission's future proposals. 

For 'Cohesion Policy', a new analysis will be presented towards the end of 2011, 
once 2010 DAS results are available. It is important that this analysis is based on 
2010 data during which the new legal framework (2007-2013 legislation) with its 
stronger  control  provisions  will  govern  most  expenditure  and  newly  implemented 
simplifications will have kicked in. 

EN 

22 

   EN 

 
 
 
 
 
 
 
The  Commission  agrees  there  are  other  elements  to  be  explored  with  a  view  to 
improving  financial  management  (such  as  simplification)  and  believes  that  these 
kind  of  initiatives  are  not  mutually  exclusive  but  can  take  place  in  parallel  and 
simultaneously (simplifications will take time to have an impact on the Discharge, 
which relates to the year N-2). Nevertheless the Commission points out that there 
are limits to which level the control costs can be increased to reduce errors further 
under constant legislation. 

In line with the objective of its future TRE proposals, the Commission will analyse 
the  resources  available  and  the  part  of  those  resources  dedicated  to  the  control 
systems when defining a cost-effective level of control for all the remaining policy 
areas (see the response to paragraphs 58-60 under point 23 above). 

25. 

(European  Parliament,  §  68)  -  Regrets  that  the  Commission  puts  more  effort  into 
convincing Parliament about the need to introduce a ‘tolerable risk of error’ than into 
persuading  Member  States  of  the  need  for  mandatory  national  management 
declarations.  

Commission's response: 

The  Commission  proposal  for  the  triennial  revision  of  the  Financial  Regulation 
was  adopted  in  May  2010  and  includes  a  requirement  for  annual  management 
declarations  of  assurance  from  accredited  management  bodies  in  the  Member 
States,  accompanied  by  an  independent  audit  opinion  thereon  (see  also  the 
response in point 19 above to paragraphs 47-51 of the Parliament's resolution). 

The Commission will carry out an evaluation of annual summaries after 3 years of 
existence by autumn 2010. It will also issue an analysis of on value-added features 
of the voluntary national declarations. 

26. 

(European  Parliament,  §  69  (and  §  180))  -  Emphasises  that  control  systems  are  a 
reflection  of  the  complexity  of  regulations  and  rules  on  the  various,  sometimes 
overlapping levels; urges the Commission, therefore,  to speed up  the simplification 
exercise  whilst  fully  involving  Parliament,  and  asks  Member  States  and  regions  to 
make corresponding efforts to that end.  

Commission's response: 

The  Commission  supports  simplification  where  possible  and  where  this  is 
consistent  with  the  achievement  of  policy  objectives  (which  often  require  precise 
rules). It has committed itself to proposing simplifications in the post 2013 period 
legislation.  To  inform  the  debate  on  the  new  period  provisions,  it  will  adopt  a 
communication  by  the  end  of  2010  outlining  how  legislation  might  be  simplified 
for the forthcoming period. 

For the 2007-2013 programming period, the Commission has already implemented 
simplifications  in  the  common  agricultural  policy,  including  rural  development, 
and will continue to do so in the future. However, any such further simplification 
will not be enough to reduce the error rate in rural development below the Court's 
2% materiality threshold without the risk of jeopardising policy objectives. 

EN 

23 

   EN 

 
Against  this  background,  introducing  the  concept  of  tolerable  risk  of  error  is 
needed to reach a clear view on the balance between the risk of error and the costs 
of  control:  such  an  approach  would  foster  cost-effective  controls.  This  does  not 
imply  accepting  inadequate  management  and  control  systems,  but  setting  a 
different  standard  for  determining  the  best  possible  control  results  within  given 
resources. 

EN 

24 

   EN 

 
Interinstitutional debate on the current discharge procedure system 

27. 

(European  Parliament,  §§  70-71)  -  Calls  on  the  Commission  to  organise  an 
interinstitutional  discussion  involving  in  the  initial  phase,  at  the  highest  level, 
representatives of the Council, of the Commission, of the Court of Auditors and of 
Parliament,  and  in  the  second  phase  representatives  from  the  Member  States,  of 
national parliaments  and supreme audit institutions, with a view to embarking on a 
comprehensive debate on the current discharge procedure system; 

Proposes to give the Commission, during the forthcoming budgetary procedure, the 
financial resources needed to organise such debate.  

Commission's response: 

The  Commission  agrees  to  the  need  for  a  broad  discussion  among  stakeholders 
and hopes for the European Parliament support in this. This conference should be 
an opportunity to agree on a new partnership and define the role and tasks of each 
party with a view to achieving an unqualified statement of assurance (DAS). 

EN 

25 

   EN 

 
 
Political responsibility and administrative responsibility at the Commission 

28. 

(European  Parliament,  §  73)  -  Expresses  its  concern  about  the  fact  that  the  Court 
continues to find weaknesses in the operation of supervisory and control systems and 
in  the  relevant  reservations  on  the  assurance  given  in  the  declarations  by  the 
Commission’s  Directors-General,  namely  as  regards  their  impact  on  the  assurance 
concerning  the  legality  and  regularity  of  underlying  transactions,  and  reminds  the 
Member States and the Commission of their respective responsibilities in this field;  

Commission's response: 

The Commission considers the reservations in the Annual Activity Reports (AARs) 
in line with the materiality criteria established and the AAR methodology in force. 
It  recalls  the  major  methodological  difference  between  the  Court  of  Auditors' 
annual  audits  and  the  Commission's  multi-annual  control  system,  where  errors 
found by the Court may be detected and corrected in subsequent years, before the 
final payment. 

Nevertheless,  the  Commission  takes  this  issue  very  seriously  and  has  therefore 
taken decisive action to further improve the quality of AARs and in particular the 
reasoning and evidence presented underlying the assurance provided. For the 2009 
AARs, the instructions were significantly overhauled, a dedicated helpdesk was set 
up and training courses were provided. Complementary actions will take place for 
the 2010 AARs, and the Commission expects to see the results of this major effort 
in the Court's 2010 Annual Report. 

29. 

(European Parliament, § 74) - Insists that the public must have access to information 
on all members of expert groups and working groups working with the Commission 
as well as disclosure concerning beneficiaries of EU funding.  

Commission's response: 

The Commission published information on the lists of members of expert groups in 
the Commission’s Register of Expert Groups. This publication must be done taking 
into  account  the  composition  of  each  expert  group  and  requirements  of  both 
Regulation 45/2001 and Article 4 of Regulation 1049/2001. 

On  special  advisers,  the  Commission  adopted  on  19  December  2007  new  rules 
which  foresee  a  specific  information  of  the  Budgetary  Authority  as  part  of  the 
budgetary  procedure,  and  the  publication  of  the  list  of  the  special  advisers  and 
their  curricula  vitae  on  the  "Europa"  Website  of  the  Commission  (see 
C(2007)6655 of 19 December 2007): 

http://ec.europa.eu/transparency/regexpert/ 

Concerning the disclosure of beneficiaries of EU funds, the Commission and the 
Member States' administrations already provide that information to the public. 

30. 

(European Parliament, §§ 75-76) - Insists that the Commission must be responsible 
for ensuring the completeness, searchability and comparability of the data provided 

EN 

26 

   EN 

 
concerning the beneficiaries of EU funding, including details of recipients and their 
projects; 

Welcomes  the  fact  that  the  information  on  EU  funding  beneficiaries  is  to  be 
published  more  widely  and  on  an  easily  accessible  and  user-friendly  website,  and 
calls  for  standardisation  of  the  structure  and  presentation  of  national,  regional  and 
international sites accessible from a central portal.  

Commission's response: 

The  Commission  considers  that  it  has  issued  the  relevant  instructions  for 
standardisation  of  the  information  to  be  presented  by  the  various  management 
authorities involved in managing EU funds, and cannot go further in the present 
context (art 30 FR) as the publication of beneficiaries under shared management 
is clearly of the responsibility of Member States. A further coordinated initiative is 
not envisaged at this point. 

On  the  other  hand,  the  Commission  is  focusing  on  improving  its  "Financial 
Transparency  System"  website  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 administrative budget. 

31. 

(European  Parliament,  §§  77-78)  -  Emphasises  once  again  the  need  to  revise  the 
present  Code  of  Conduct  of  the  Members  of  the  Commission  in  order  to  remedy 
shortcomings  such  as:  (a)  the  absence  of  any  definition  of  the  term  "conflict  of 
interest", (b) the failure to prescribe a course of action if a conflict of interest arises, 
(c) a lack of clarity with regard to the acceptance of gifts and hospitality, and (d) the 
absence  of  any  body  designated  to  look  into  complaints  as  well  as  to  relieve  the 
President from the (possible) duty of self-assessment; 

Expects the Commission to begin the process of consulting Parliament on revision of 
the present Code of Conduct of the Members of the Commission in accordance with 
the  common  understanding  reached  on  27  January  2010  between  President  José 
Manuel Barroso and Parliament’s Working Party on the revision of the Framework 
Agreement  between  the  Parliament  and  the  Commission,  and  to  adopt  the  revised 
version of its Code of Conduct of the Members of the Commission by August 2010 
at  the  latest,  whilst  observing  that  this  revision  should  have  been  done  prior  to  the 
appointment of the new Commission.  

Commission's response: 

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

This  revision  will  aim  at  improving  the  current  Code,  clarifying  obligations 
without introducing unnecessary red-tape.  

As  foreseen  in  the  negotiation  on  the  revision  of  the  Framework  Agreement 
between  the  Parliament  and  the  Commission,  the  Commission  will  seek 
Parliament's  opinion  when  it  comes  forward  with  a  revision  of  the  Code  of 
Conduct for Commissioners relating to conflict of interest or ethical behaviour. 

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The Commission has been confronted to many others priority in the first month of 
its mandate and considers that a revision of this code is an important issue which 
must be taken seriously. 

32. 

(European Parliament, § 79-80) - Recalls the importance of complete transparency 
and  publicity  with  regard  to  staff  working  in  the  cabinets  of  Members  of  the 
Commission who have not been recruited in accordance with the Staff Regulations; 

Also  recalls  that  the  binding  Code  of  Conduct  of  the  Members  of  the  Commission 
should  incorporate  the  necessary  ethical  rules  and  the  principal  guidelines  to  be 
observed  by  Commissioners  in  the  conduct  of  their  office,  in  particular  when 
appointing colleagues, especially to their cabinets.  

Commission's response: 

The staff of the Cabinets of Members of the Commission is recruited according to 
the  set  rules.  The  President  of  the  Commission  sets  the  rules  concerning  the 
composition  of  the  cabinets  of  the  Members  of  the  Commission.  As  foreseen  by 
article  17.6  of  the  Treaty  (TUE),  'the  President  of  the  Commission  shall  (a)  lay 
down  guidelines  within  which  the  Commission  is  to  work…'  See  also  SEC(2010) 
104 of 3 February 2010. 

33. 

(European Parliament, § 81) - Calls on the Commission to ensure that all staff are 
well  trained  and  properly  briefed  about  their  obligations  and  rights  under  Articles 
22a and 22b of the Staff Regulations.  

Commission's response: 

The  Commission  has  adopted  a  Communication  on  ethics  (SEC(2008)301), 
containing,  amongst  others,  an  action  plan  to  train,  brief  and  inform  staff  and 
management on the various rights and obligations in this respect, including art 22 
a and b. 

34. 

(European Parliament, §§ 82-83) - Notes the small decrease (from 31,8 % in 2007 to 
30,9  %  in  2009)  in  staff  allocated  to  "administrative  support  and  coordination 
functions",  which  forms  only  part  of  the  overall  overhead;  recalls  its  previous 
demands for measures aimed at attaining a proportion of 20 % in this area (paragraph 
217 of its above-mentioned resolution of 23 April 2009); 

Urges  the  Commission  to  submit,  together  with  the  preparatory  documents  for  the 
2011 budget (formerly working documents relating to the preliminary draft budget), 
an  establishment  plan  implementing  a  3  %  reduction  in  this  field  as  a  first  step 
towards  reaching  the  20  %  level  by  the  end  of  the  term  of  office  of  the  Barroso  II 
Commission.  

Commission's response: 

The Commission has taken the recommended action. 

Taking  all  persons  on  Commission  premises  in  early  2010,  29.5%  of  them  were 
engaged in support and coordination functions, compared to 31.8% in 2007, 31.7% 

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in 2008 and 30.9% in 2009. This figure comes down to 26.7% if one counts only 
its  own  administration  support  and 
persons  serving 
coordination  functions,  after  deducting  persons  identified  as  serving  other 
institutions or agencies.  

the  Commission 

in 

The  detailed  figures  were  transmitted  by  note  from  Vice-President  Šefčovič  and 
Commissioner  Lewandowski  to  M.  Lamassoure,  President  of  the  EP  Budget 
Committee, on 1st June 2010. 

The  Commission  will  continue  its  efforts  of  redeploying  resources  dedicated  to 
horizontal and coordinating functions to operational and political tasks, but within 
reasonable limits. For this exercise the 20% figure is not an objective as such. 

35. 

(European Parliament, § 84) - Calls on the Commission, in the run-up to review of 
the Staff Regulations of officials and Conditions of Employment of other servants, to 
devise and submit alternative methods for the adjustment of the pay of officials and 
other servants on a proper legal and actuarial basis; considers that this should bring 
about  a  broader  basis  of  calculation  for  the  annual  adjustment  and  a  prompter  pay 
adjustment,  and  thus  more  appropriately  reflect  general  economic  developments  in 
the Member States.  

Commission's response: 

Firstly, the method is laid down in the Staff Regulations and is valid until the end 
of 2012. 

It  takes  into  account  evolution  of  purchasing  power  of  national  civil  servants  in 
central  government  in  eight  Member  States,  representing  76%  of  EU  GDP,  and 
thus follows the European Union's economic development. 

The  Commission  will  use  its  right  of  initiative  to  keep,  amend  or  replace  the 
method after its expiry. 

36. 

(European  Parliament,  §  85)  -  Calls  on  the  Commission  to  assess  the  value  of 
placing candidates in entry pay grades solely in the light of their suitability and to put 
forward  proposals  for  placing  qualified  staff  in  higher  pay  grades;  expects  also,  as 
part  of  the  assessment,  a  report  on  the  practical  use  of  cabinet  members  after  they 
leave office and in relation to the entry conditions they were expected to fulfil.  

Commission's response: 

As  regards  the  entry  grades,  the  Commission  services  are  elaborating  a  proposal 
for  recruitment  of  the  function  group  AD  officials,  where  the  problem  is  mostly 
situated,  at  two  different  grades,  recognising  the  necessity  to  take  the  experience 
into account. The proposal is being examined at the political level. 

As regards the "use" of ex-cabinet members after they leave office, Art. 11 of the 
Conditions  of  Employment  of  Other  Servants  states  that  they  are,  by  analogy, 
subject  to  the  same  obligations  (and  have  the  same  rights)  as  officials,  viz.  those 
defined in art. 11 to 26 of the Staff Regulations. More specifically, the Commission 
Decision on outside activities applies to them as well. 

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37. 

(European Parliament, § 86) - Calls on the Commission to state its position on the 
extent to which the savings foreseen in the 2004 reform of the Staff Regulations have 
actually  been  achieved,  especially  with  regard  to  the  increase  in  contributions  by 
officials and other servants in the areas of health care and pensions.  

Commission's response: 

The  Commission  will  include  elements  of  comparison  between  forecasted  and 
effective savings in its proposal for the review of Annex XI to the Staff Regulation, 
in time before its expiry at the end of 2012. 

As to the staff's pension contribution, its rate and increase, if any, is based on an 
analysis of the long-term equilibrium of the system. 

As to the contribution for the Joint Sickness and Insurance Scheme, a similar rule 
applies. 

38. 

(European  Parliament,  §  87)  -  Proposes  that  the  Commission  split  the  hierarchical 
power  between  people  with  accounting  responsibility  and  those  responsible  for 
transferring  funds  in  application  of  the  normal  security  rules  for  internal  control  in 
treasury management.  

Commission's response: 

In the Commission's context the treasury management activities that fall under the 
responsibility  of  the  Accounting  Officer  are  limited  in  scope  by  the  Financial 
Regulation and its Implementing Rules. 

In  particular  the  Commission's  treasury  cannot  intervene  in  the  payment 
authorisation  process  (which  falls  under  the  responsibility  of  the  Authorising 
Officers),  and  its  responsibility  is  limited  to  the  technical  execution  of  payment 
instructions  initiated  and  fully  authorised  by  the  relevant  spending  departments. 
The only transfers of funds that can be initiated by the Commission's treasury are 
transfers  between  its  own  accounts  (that  are  instructed  for  cash  management 
purposes). The possibility therefore does not exist that funds be transferred to third 
parties on the initiative of the Commission's treasury department.  

The  above  in  practice  leaves  the  Commission's  treasury  operations  without 
responsibilities that could represent any significant potential conflict with those of 
its Accountant. 

At  the  same  time  within  the  Commission's  treasury  department  there  is  a  full 
segregation of duties between the accounting tasks related to the reconciliation of 
the  bank  accounts,  and  the  payment  execution  tasks.  The  two  profiles  are 
incompatible  in  the  Commission's  system,  so  that  officials  authorised  to  work  on 
the  payment  execution  have  no  authorisation  to  post  accounting  entries  and  vice 
versa. 

Finally,  a  recent  audit  of  the  Court  of  Auditors  on  the  Commission's  treasury 
management has not revealed any weaknesses or potential risks in this area. 

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39. 

(European Parliament, §§ 88-89) - As regards the agencies, the European Parliament 
recalls its demand (paragraphs 254 and 255 of its above-mentioned resolution of 23 
April  2009)  for  the  development  and  implementation  of  a  general  management 
system  for  the  "regulatory  agencies"  as  well  as  for  the  introduction  of  an  effective 
monitoring system for the Union agencies; 

Stresses in that regard that, notwithstanding the legally independent status of certain 
agencies, the Commission remains responsible for the implementation of the budget 
(in accordance with Article 317(1) of the Treaty on the Functioning of the European 
Union,  Articles  54,  55  and  185  of  Regulation  (EC,  Euratom)  No  1605/2002  and 
Article 37 and Article 41(2) of Regulation (EC, Euratom) No 2342/2002).  

Commission's response: 

As  the  Commission  already  stressed  in  its  answer  to  the  European  Parliament's 
demand in its resolution on the discharge for 2007 (paragraphs 254 and 255) , it 
cannot  create  a  global  management  system  or  impose  guidelines  on  planning, 
monitoring or reporting issues because of the agencies' independence and because 
of  the  limits  imposed  by  the  Legislative  Authority  to  the  Commission  in  the  acts 
creating each agency. 

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European Anti-Fraud Office (OLAF) 

40. 

(European  Parliament,  §  90)  -  Is  concerned  at  the  number  of  investigations  taking 
over  nine  months  and  the  low  level  of  follow-up  in  national  judiciaries  of  cases 
investigated  by  OLAF,  and  believes  that  an  assessment  of  the  staffing  resources  in 
OLAF  should  be  carried  out  in  order  to  see  whether  increased  staffing  could  bring 
improvements in these two areas.  

Commission's response: 

Duration of investigations: 

In its Management Plan, OLAF has set a target of 24 months for the completion of 
investigations.  Results  in  2009  were  close  to  the  24  months'  target.  Continuous 
efforts  are  made  to  reduce  the  length  of  investigations.  The  duration  of 
investigations  is  closely  monitored  by  management.  OLAF  has  put  in  place  a  'de 
minimis'  policy  and  is  now  dealing  with  more  serious  cases  than  hitherto.  From 
July  2010  onwards,  OLAF  aims  to  refine  its  result  indicators  by  differentiating 
between  simple  cases  (which  could  be  completed  in  less  than  18  months)  and 
complex cases (which could be completed in less than 36 months). This is within 
the  framework  of  a  policy  where  OLAF  is  dealing  with  cases  which  are  more 
complex  and  have  a  higher  financial  impact.  In  addition,  Article  11(7)  of 
Regulation  1073/99  requires  the  Director  of  OLAF  to  inform  the  Supervisory 
Committee  of  the  reasons  for  which  it  has  not  been  possible  to  conclude  the 
investigation,  and  of  the  expected  time  for  completion.  This  provides  an  external 
check on the duration of investigations. 

The Commission considers that the reinforced monitoring by OLAF's management 
and by the Supervisory Committee will contribute to a diminution in the duration 
of  investigations  and  considers  that  it  is  OLAF's  responsibility  to  assign  its 
resources to the most complex cases. 

Judicial follow up by Member States: 

The follow up of OLAF-investigations is complex and judicial proceedings may be 
lengthy.  It  should  be  recalled  that  the  Member  States  are  sovereign  for  the 
prosecution  and  the  judgment  of  cases.  Moreover,  the  judicial  organisation  is 
different  in  each  Member  State.  OLAF  can  only  transmit  a  case  to  recommend 
further action by the national authorities, but cannot compel Member States to act. 

The  Commission  recognises  the  need  to  ensure  a  better  follow  up  including 
judicial  follow  up  to  OLAF  investigations.  Therefore  its  proposal  for  the 
amendment  of  Regulation  1073/1999  foresees  that  for  the  purposes  of  all  its 
investigations  OLAF  should  be  informed  of  actions  taken  by  national  judicial 
authorities  in  response  to  information  transmitted  during  an  OLAF  investigation 
or after its closure. 

At  a  practical  level,  through  its  annual  conferences  for  anti-fraud  prosecutors, 
OLAF has established a network of specialised magistrates, who are able to assist 
in the follow-up. 

EN 

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Assessment of staffing resources: 

An assessment of the staffing resources in OLAF is carried out on an annual basis 
in the framework of the establishment of the OLAF budget. This regular analysis 
led  OLAF  to  embark  upon  a  gradual  rebalancing  in  the  permanent  versus 
temporary post composition of its establishment plan in order to stabilize its work 
force. As a matter of fact, the initial emphasis on temporary posts to ensure rapid 
staffing  of  the  newly–created  office  has  turned  into  a  source  of  instability  once 
these  staff  approached  the  end  of  their  contract,  exposing  OLAF  to  a  risk  of 
massive  departures  and  loss  of  know-how.  With  Amending  Budget  8/2009,  the 
Budget authority approved OLAF's plan to stabilize the office's workforce through 
external  and  internal  competitions  likely  to  facilitate  the  recruitment  of  OLAF 
temporary agents as officials and through a related increase in the proportion of 
officials  to  temporary  agents.  As  new  lists  of  laureates  of  internal  competitions 
were published in March 2010, further adjustments to OLAF's establishment plan 
were  submitted  to  the  Budget  Authority  (Amending  Budget  5/2010  and  Draft 
Budget 2011). 

41. 

(European  Parliament,  §§  91-92  and  94-95)  -  Welcomes  the  undertakings  of  15 
January  2010  by  the  new  Commission  to  unblock  discussions  in  the  Council  about 
the  reform  of  OLAF  and  to  come  forward,  at  the  latest  by  July  2010,  with  the 
promised  and  long  overdue  Commission's  "reflection  paper"  as  a  basis  for 
negotiations in the Council; 

Reiterates  the  importance  of  taking  into  account  Parliament’s  first-reading  position 
of 20 November 2008 on a proposal for a Regulation of the European Parliament and 
of  the  Council  amending  Regulation  (EC)  No  1073/1999  concerning  investigations 
conducted by the European Anti-Fraud Office (OLAF) , and wishes to re-emphasise 
that, for the future strength of OLAF, it should remain within the Commission whilst 
retaining its independence; recalls that Article 317 of the Treaty on the Functioning 
of the European Union places an enhanced responsibility on the Member States and 
thus supports Parliament’s continuous call for improved cooperation by the Member 
States with OLAF; 

Requires the Commission to come forward, as a matter of urgency, with its promised 
and  long-awaited  ‘reflection  paper’,  and  reiterates  the  importance  of  Parliament’s 
above-mentioned first-reading position of 20 November 2008 on the subject; wishes 
to  re-emphasise  that,  for  the  future  strength  of  OLAF,  it  should  remain  within  the 
Commission  whilst  retaining  its  independence;  stresses  its  proposals  regarding  the 
post  of  Director-General  of  OLAF,  as  contained  in  Parliament’s  position,  and  calls 
for  the  successful  candidate  to  be  appointed  very  quickly;  takes  the  view  that  the 
selection procedure needs to be carried out in an interinstitutional framework which 
fully respects Parliament’s prerogatives; 

Reaffirms its opinion that the procedure for the appointment of the interim Director 
General  of  OLAF  must  follow  mutatis  mutandis  the  rules  contained  in  the  act 
providing  for  OLAF's  legal  basis,  namely  Article  12  of  Regulation  (EC)  No 
1073/1999  of  the  European  Parliament  and  of  the  Council  of  25  May  1999 
concerning  investigations  conducted  by  the  European  Anti-Fraud  Office  (OLAF)  ; 
deplores  the  Commission's  general  application  of  the  Staff  Regulations  and  is 
concerned that the Commission's position may affect OLAF´s effectiveness.  

EN 

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Commission's response: 

Reflection paper: 

Commissioner  Šemeta  presented  the  reflection  paper  to  the  Committee  on 
Budgetary Control on 12 July 2010. 

The purpose of the reflection paper is to put forward some elements for reflection 
which would help to achieve progress in the inter-institutional debate on the future 
of  OLAF.  It  identifies  the  convergent  and  divergent  positions  of  the  EP  and  the 
Council  on  the  Commission  proposal  and  sets  out  possible  options  in  order  to 
achieve  consensus  on  the  main  issues  at  stake,  in  particular  to  increase  OLAF’s 
efficiency  and  accountability  while  fully  respecting  its  operational  independence. 
The proposal for amendment of Regulation 1073/1999 and the EP resolution in 1st 
reading represent the starting points for further reflection. 

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. 

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.  While  it  is 
important  to  move  forward  quickly  in  finding  the  new  Director  General,  the  first 
priority is to find the best possible candidate for this post.  

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 EP and the Council at an early stage.  

Interim arrangements: 

The Commission takes the view that the acting Director General was confirmed in 
his  functions  in  accordance  with  the  applicable  rules  and  the  principle  of 
continuity of service. 

42. 

(European  Parliament,  §  93)  -  Wishes  to  have  early  sight  of  the  proposal  for  the 
establishment  of  a  European  Public  Prosecutor’s  Office  (EPPO)  as  envisaged  in 
Article  86  of  the  Treaty  on  the  Functioning  of  the  European  Union;  wishes  to  be 
involved in the discussions about the establishment of an EPPO.  

Commission's response: 

The Treaty of Lisbon provides for several new means to reinforce the protection of 
the financial interests of the EU. The Union can make use of criminal law (article 
325 TFEU) to reinforce this protection, and set up a body to effectively coordinate 
criminal  prosecutions  and  protect  taxpayers'  money:  the  establishment  of  a 

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European Public Prosecutor's Office from Eurojust as set out in article 86 TFEU. 
The Commission will set out its initial ideas on the ways to promote the cause for 
fighting  fraud  and  enable  effective  criminal  prosecutions  equally  in  all  Member 
States to reinforce the protection of the EU Budget. To this end, the Commission 
will  also  adopt,  in  2011,  an  amended  proposal  on  the  Regulation  on  OLAF 
investigations.  Preparatory  work  on  the  establishment  of  a  European  Public 
Prosecutor's  Office  requires  thorough  reflection  involving  all  stakeholders.  The 
European Parliament will be informed from an early stage. 

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Revenue 

43. 

(European Parliament, § 97) - Takes note, with deep concern, of the Commission’s 
report on the Greek government deficit and debt statistics (COM(2010)0001), which 
raises  serious  doubts  concerning  the  reliability  of  the  data  delivered  by  the  Greek 
authorities;  calls  on  the  Commission  to  establish  by  its  own  investigations  the 
validity of the data made available in 2008 and to confirm the regularity and legality 
of the calculation and contribution of the own resources made available.  

Commission's response: 

The  requested  action  has  been  taken.  The  present  levels  of  the  Greek  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.  These 
results were discussed and supported by the GNI Committee of Member States. The 
Commission Report COM (2010) 1 final of 8 January 2010 deals with deficit and 
debt  data  of  general  government  in  Greece.  A  thorough  analysis  of  the  potential 
impact of the issues which emerged from this deficit and debt verification did not 
reveal a significant impact on GDP/GNI levels. It is also reminded that a protective 
regulatory  system  of  reservations  is  in  place  that  allows  the  Commission  to  take 
into consideration, for own resource purposes, possible corrections to GNI data if 
deemed necessary. 

44. 

(European  Parliament,  §  98)  -  Asks  the  Commission  to  present  its  plans  on  the 
future  handling  of  operations  with  the  Greek  administration;  stresses  that  staff 
involved in the management of European funds must be excepted from cost-cutting 
measures  in  order  to  ensure  the  maintenance  and  integrity  of  the  management 
structures.  

Commission's response: 

The Commission would like to point out that based on a joined agreement with the 
EU  and  the  IMF  Greece  has  started  to  implement  a  comprehensive  reform 
programme  (Economic  Adjustment  Programme)  as  a  pre-condition  for  financial 
assistance.  The  programme  terms  include  far-reaching  reforms  of  Greek  public 
administration, of public financial management and fiscal frameworks as well as 
measures  to  improve  the  absorption  of  EU  structural  and  cohesion  funds. 
However,  it  should  be  stressed  that  concerning  the  management  of  EU  funds, 
Greece has already been subject to the same strict monitoring of the legality and 
regularity of spending as all other Member States which has inter alia resulted in 
low levels of EU funds disbursement. 

The  implementation  of  the  reform  programme  is  subject  to  strict  regular 
monitoring. Progress according to the agreed time-frame is a pre-condition for the 
disbursement  of  successive  tranches  of  the  agreed  financial  assistance.  The  first 
phase of the reforms is progressing well and the Commission is convinced that the 
successful implementation of the entire reform programme will lead to substantial 
improvements in Greek fiscal management. 

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45. 

(European  Parliament,  §  99)  -  Notes  however,  regarding  the  VAT-based  own 
resources, that reservations dating back as far as 1989 continue to exist, and calls on 
the  Commission,  in  cooperation  with  the  Member  States,  to  continue  its  efforts  to 
ensure that reservations are lifted within reasonable timescales.  

Commission's response: 

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 reservations now having been set in 2008 or later. 

46. 

(European  Parliament,  §  100)  -  Asks  the  Commission,  regarding  GNI-based  own 
resources,  to  follow  the  Court’s  recommendation  in  point  4.36  of  its  2008  Annual 
Report  and  to  communicate  to  Parliament  details  of  the  progress  made  in  applying 
direct verification and assessing supervisory and control systems in Member States’ 
national statistical institutes.  

Commission's response: 

The  requested  action  has  been  taken.  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 (the so-called GNI inventories), taking into account risk 
analysis.  The  Commission  considers  that  this  approach  is  essential  to  reach 
conclusions  on  the  quality  of  Member  States'  GNI  data  in  accordance  with  the 
provisions  of  GNI  Regulation  (1287/2003).  Further  to  the  observations  from  the 
European Court of Auditors, the Commission started using direct verification since 
2007, and has established specific rules that were approved by the GNI Committee 
in  April  2009.  By  end  February  2010,  the  Commission  carried  out  direct 
verifications in 24 Member States, covering all EU-15 and 9 EU-10 countries. For 
Cyprus and EU-2, direct verifications will be performed in 2010-2011. Finally, in 
continuing  to  promote  the  sharing  of  best  practices  for  the  development  and 
assessment  of  national  supervisory  and  control  systems  between  countries,  the 
Commission held a seminar on supervisory and control systems in which Member 
States  and  the  Court  of  Auditors  participated  in  December  2009.  The  issue  of 
national supervisory and control systems for national accounts will be followed at 
future meetings of the GNI Committee in 2010. 

EN 

37 

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The common agricultural policy 

47. 

(European  Parliament,  §  102)  -  The  overall  credibility  of  the  system  must  not  be 
jeopardised by the extreme spread of on-the-spot error rates by Member State in the 
implementation of area aids; calls for well directed, immediate measures resulting in 
both  administrative  relief  for  outperforming  Member  States  and  effective 
countermeasures;  

Commission's response: 

The requested action has been taken. The control requirements on Member States 
in  the  field  of  agriculture  take  into  account  the  principle  of  proportionality.  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 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. 

48. 

(European Parliament, § 106) - Calls for a simplification of complex rules and more 
precise  definitions  of  eligibility  criteria,  especially  for  agri-environmental  schemes, 
first of all at Commission level but also at national level, in the context of the rural 
development  plans,  and  asks  also  for  all  stakeholders  to  be  given  more 
comprehensive and clearer instructions and guidelines, and for training actions to be 
organised;  

Commission's response: 

The Commission is taking the requested action. 

Rural  development  measures,  and  notably  agri-environmental  ones,  are 
characterised  by  more  demanding  eligibility  criteria  compared  to  direct  payment 
schemes. The resulting complexity is known and accepted as a condition to achieve 
the overall objective of providing environmental benefits and public goods through 
these aid schemes. 

Nevertheless,  there  is  scope  for  some  simplification  of  the  agri-environmental 
measures.  The  Commission  has  taken  several  measures  to  simplify  existing  rules 
and  to  ensure  effective  and  efficient  implementation  of  the  control  rules  in  rural 
development.  In  particular  Commission  Regulation  (EC)  1975/2006  has  for  the 
first time established a comprehensive and transparent legal control framework for 
rural development. Furthermore, the Commission has established in 2007 a final 
version  of  a  guidance  note  providing  guidelines  and  additional  explanations  for 
the implementation of agri-environmental measures. Finally, the Commission has 
enhanced its audit activities in this area. 

However,  it  should  be  noted  that  the  rural  development  programmes  are 
implemented  under  the  shared  management  and  that  the  Community  legislation 

EN 

38 

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only  provides  a  general  legal  framework  whereas  it  is  up  to  the  Member  States 
themselves  to  define  detailed  eligibility  criteria  at  national  level.  Furthermore, 
Annex  VI  of  Commission  Regulation  (EC)  No  1974/2006  requires  that  the 
managing authorities disseminate the most comprehensive information possible on 
the  financing  opportunities  covering,  inter  alia,  application  procedure,  the 
eligibility conditions and selection criteria. 

Commission  Regulation  (EC)  1975/2006  will  be  recast  during  2010  in  order  to 
simplify  and  clarify  certain  rules.  In  addition,  as  part  of  DG  AGRI  2010  annual 
audit  work  programme,  a  task  force  has  been  set  up  to  follow  up  the  high  error 
rate  reported  by  certain  Member  States  in  2009  for  rural  development  measures 
under axis 2. 

49. 

(European Parliament, § 109) - Emphasises the importance of prompt and thorough 
ex-post  audits  to  detect  ineligible  expenditure  and/or  inadequate  supporting 
documentation, in order to allow the necessary corrections to be made;  

Commission's response: 

The requested action has been taken.  

All aid measures other than direct payments covered by the IACS are subject to ex-
post controls under either Regulation (EC) No 485/2008 or, for rural development 
measures, Regulation (EC) No 1975/2006. Moreover, the paying agencies' annual 
accounts and the functioning of their internal control procedures are verified and 
certified  on  an  ex-post  basis  by  the  certification  bodies.  Both  types  of  ex-post 
controls  are  carried  out  in  accordance  with  an  annual  audit  plan  established  on 
the basis of a pre-determined audit strategy. 

50. 

(European Parliament, § 111) - Considers that the question of beneficiaries who do 
not meet the definition of "farmers", as denounced by the Court in the 2008 Annual 
Report, should be resolved by the Commission in order to provide a greater level of 
assurance which can be gained from the work of the certification bodies;  

Commission's response: 

Under  EU  legislation,  natural  or  legal  persons  are  entitled  to  receive  SPS/SAPS 
payments if they carry out an agricultural activity. An agricultural activity means 
the production, rearing or growing of agricultural products including harvesting, 
milking,  breeding  animals  and  keeping  animals  for  farming  purposes,  or 
maintaining the land in good agricultural (and environmental) condition . Thus, it 
is sufficient that the beneficiary fulfils its obligation to maintain the rural area at 
its disposal in good agricultural (and environmental) conditions. 

However,  as  regards  the  Parliament's  request,  the  Commission  has  already 
addressed the issue of the farmer definition in the framework of the Health Check 
by  giving  Member  States  the  possibility  to  exclude  from  direct  payment  schemes 
natural  or  legal  persons  whose  principal  business  objects  do  not  consist  of 
exercising an agricultural activity or whose agricultural activities are insignificant 
(Article 28(2) of Regulation (EC) No 73/2009). 

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39 

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Further reflexion will take place in the scope of the post 2013 CAP reform. 

51. 

(European  Parliament,  §  112)  -  Takes  note  of  the  conclusions  of  the  Court  and 
therefore  urges  the  Commission  to  improve  checks  in  those  Member  States  which 
did not comply with Community legislation when allocating entitlements beyond the 
provisions of the regulations;  

Commission's response: 

The requested action has been taken. Weaknesses in the allocation of entitlements 
are  being  followed  up  by  the  Commission  in  the  framework  of  the  conformity 
clearance procedures. 

52. 

(European Parliament, § 114) - Asks the Commission to carry out a detailed follow-
up to ensure that the debts at the overall level of the debtors’ accounts are correct and 
properly charged to the Community budget;  

Commission's response: 

The  requested  action  has  been  taken.  The  Commission  obtained  enough 
information  on  debtors  for  clearance  and  accounting  purposes.  Corrections 
amounting to EURO 14.8 million have been proposed by the Commission based on 
its assessment of the errors found by the certification bodies in their reports. The 
financial errors found are followed up through the normal clearance of accounts 
procedures. 

EN 

40 

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Cohesion 

53. 

(European  Parliament,  §  116)  -  Stresses  the  absolute  priority  of  further  reducing 
global  error  rates,  which  remained  high  in  this  spending  area  in  2008,  and  of 
improving the Commission's supervision and the system of recoveries;  

Commission's response: 

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. But also the vast 
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  after  receiving  in  December  2010  (and  thereafter  in 
December  each  year)  the  results  of  the  2009  audits  by  Member  States'  audit 
authorities on the first 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  2010 (COM(2010)52), the first preliminary results of this inquiry 
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,  as  not  all  of  them,  including  some  countries 
where  most  of  the  important  errors  were  concentrated  in  the  past,  had  declared 
expenditure by the end of May 2009. 

54. 

(European Parliament, § 120 (1st part)) - Reiterates its call for further simplification 
of the rules proposed by the Commission and, at the same time, for the introduction 
of  more  efficient  controls  at  national  and  EU  level,  with  a  view  to  effective 
implementation of the Structural and Cohesion Funds;  

Commission's response: 

The Commission fully agrees and has already taken steps in order to translate this 
request  into  concrete  action.  In  2008,  the  Commission  set  up  a  Task  Force  at 
Commission  level  between  DG  REGIO  and  DG  EMPL,  with  the  aim  to  identify 
specific measures to be adopted at legislative and non-legislative level in order to 
facilitate  the  financial  flows  to  beneficiaries  and  simplify  the  implementation  of 
interventions,  while  ensuring  the  EU  financial  interests.  This  Task  Force  had 
several  reflections  and  discussions  with  an  Expert  Group  on  Simplification, 
composed  by  national  experts  from  managing  authorities,  certifying  authorities 
and  audit  authorities  in  the  Member  States.  Several  of  the  proposals  discussed 
within  the  Task  Force  and  the  Expert  Group  are  reflected  in  the  three 

EN 

41 

   EN 

 
modifications  of  the  General  Regulation,  the  amendment  of  ESF  and  ERDF 
Regulations  as  well  as  the  amendment  of  the  Commission's  implementing 
Regulation.  For  simplified  costs,  which  have  a  clear  added-value  in  terms  of 
implementation  and  controls,  the  adoption  of  the  Commission  guidelines  on  28 
January  2010  is  expected  to  facilitate  Member  States'  use  of  these  options.  In 
parallel,  the  Commission  services  are  providing  their  ex-ante  assessment  on 
national  proposals  for  the  calculation  of  indirect  costs  on  a  flat-rate  basis, 
trainings and, if needed, assistance to national authorities. 

Simplification  of  the  regulatory  framework  comes  to  an  end  but  the  Commission 
will pursue this objective. After the last set of simplifying legislative measures was 
adopted  by  the  Parliament  in  2010,  the  Commission  intends  to  pursue  its 
simplification efforts by discussing with Member States on further simplification of 
the practical working arrangements. 

The single audit principle incorporated in the regulatory framework applicable for 
2007-2013 (article 73 of Regulation 1083/2006) is expected to improve controls at 
national  level:  national  audit  authorities  will  work  closely  with  Community  audit 
services in the same assurance building process. 

55. 

(European  Parliament,  §  120  (2nd  part))  -  Takes  the  view  that  an  objective 
assessment of the effects of the simplification measures introduced in 2008-2009 is 
essential,  and  calls  on  the  Commission  to  carry  out  this  assessment  by  the  end  of 
2010;  

Commission's response: 

The Commission fully agrees and has already taken steps in order to translate this 
request  into  concrete  action.  In  2008,  the  Commission  set  up  a  Task  Force  at 
Commission  level  between  DG  REGIO  and  DG  EMPL,  with  the  aim  to  identify 
specific measures to be adopted at legislative and non-legislative level in order to 
facilitate  the  financial  flows  to  beneficiaries  and  simplify  the  implementation  of 
interventions,  while  ensuring  the  EU  financial  interests.  This  Task  Force  had 
several  reflections  and  discussions  with  an  Expert  Group  on  Simplification, 
composed  by  national  experts  from  managing  authorities,  certifying  authorities 
and  audit  authorities  in  the  Member  States.  Several  of  the  proposals  discussed 
within  the  Task  Force  and  the  Expert  Group  are  reflected  in  the  three 
modifications  of  the  General  Regulation,  the  amendment  of  ESF  and  ERDF 
Regulations  as  well  as  the  amendment  of  the  Commission's  implementing 
Regulation.  For  simplified  costs,  which  have  a  clear  added-value  in  terms  of 
implementation  and  controls,  the  adoption  of  the  Commission  guidelines  on  28 
January  2010  is  expected  to  facilitate  Member  States'  use  of  these  options.  In 
parallel,  the  Commission  services  are  providing  their  ex-ante  assessment  on 
national  proposals  for  the  calculation  of  indirect  costs  on  a  flat-rate  basis, 
trainings and, if needed, assistance to national authorities. 

Simplification  of  the  regulatory  framework  comes  to  an  end  but  the  Commission 
will pursue this objective. After the last set of simplifying legislative measures was 
adopted  by  the  Parliament  in  2010,  the  Commission  intends  to  pursue  its 
simplification efforts by discussing with Member States on further simplification of 
the practical working arrangements. 

EN 

42 

   EN 

 
The first effects of the reinforced control framework are expected to be visible at 
the  end  of  2010  onwards,  based  on  the  results  of  Community  audits  and  after 
receiving in December 2010 the results of the 2009 audits by Member States' audit 
authorities on the first 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 18 February 2010, the first preliminary results of 
this  inquiry  reveal  a  clear  decrease  of  the  estimated  error  rate  that  suggests  that 
actions  taken  are  sound.  Nevertheless,  this  result  should  though  be  read  with 
prudence, as it is based on a population of 15 Member States, as not all of them, 
including  some  countries  where  in  the  past  where  concentrated  most  of  the 
important errors, had declared expenditure by the end of May 2009. 

56. 

(European  Parliament,  §  121)  -  Present,  in  addition  to  the  current  Action  Plan,  a 
proposal  in  cooperation  with  the  Court  of  Auditors  for  solving  the  phasing 
difficulties  between  the  multiannual  budgetary  framework  and  the  annual  auditing 
system;  

Commission's response: 

The Court of Auditors is bound by the Treaties and gives an annual opinion of the 
implementation of the Commission budget. Structural Funds programmes run in a 
multiannual  framework.  The  Commission  ensures  the  protection  of  the  financial 
interests  of  the  Union  by  applying  the  management  and  control  systems  and 
procedures as provided for in the financial and sector  regulations decided by the 
legislator in order to prevent, detect and correct errors harming the EU budget. 

Multiannual  programmes  are  subject  to  multiannual  control  systems  and  many 
errors  detected  by  the  Court  in  a  given  year  would  normally  have  been  detected 
and  corrected  by  Commission's  systems  in  subsequent  years.  This  can  be 
demonstrated  by  calculating  residual  error  rates  at  the  time  of  closure  of  a 
programme,  which  have  been  shown  in  the  past  to  be  lower  than  during  the 
implementation period. 

Note 6 to the consolidated accounts presents information on financial corrections 
confirmed and implemented in a specific year, as well as cumulative information. 
It  has  been  reviewed  for  the  2009  accounts.  The  Commission  has  improved  the 
presentation to respond to stakeholders’ requests. 

57. 

(European  Parliament,  §  122)  -  Asks  the  Commission  to  provide  for  translation  in 
due course of the guidelines for public authorities in the Member States;  

Commission's response: 

Several  guidelines  are  already  available  for  the  Member  States  in  all  official 
languages.  The  remaining  translations  will  be  made  available  by  the  end  of 
October 2010. 

EN 

43 

   EN 

 
58. 

(European  Parliament,  §  125)  -  Encourages  the  Commission  to  further  increase  its 
efforts by providing guidance to Member States and encouraging them to strengthen 
recovery procedures and reporting;  

Commission's response: 

The  Commission  is  taking  the  requested  action.  It  considers  appropriate  training 
for national authorities of utmost importance in the context of shared management 
of the structural funds. Since the beginning of the current programming period the 
Commission  has  provided  regular  and  early  training  and  guidance  to  the 
competent  authorities  in  the  Member  States.  Specific  training  actions  were  also 
foreseen 
in  February  2008 
(COM(2008)97) in that regard and are carried out on a regular basis. 

the  Commission  Action  Plan  adopted 

in 

The strict policy applied by the Commission in matter of payment suspension and 
financial  correction  is  a  clear  incentive  to  Member  States  for  implementing 
financial corrections where needed. 

The Commission is also taking steps to improve the quality of information provided 
by  Member  States  on  recoveries.  It  has  analysed  the  information  provided  in 
previous  years  and  made  appropriate  recommendations  where  needed.  It  has 
written to all Member States in December 2009 requesting information related to 
2009 and previous years. It has also requested Member States to ensure that gaps 
and  inconsistencies  of  previous  reporting  rounds  are  remedied.  Moreover,  the 
Commission carried out in 2009 a second series of on-the-spot reviews of Member 
States systems for recoveries, covering nine Member States, in addition to the ten 
Member States audited in 2008. It will complete the reviews in 2010 with visits to 
the  remaining  Member  States.  Those  steps  have  shown  results,  as  the  data 
provided  by  the  Member  States  in  2009  are  of  better  quality  compared  to  the 
previous years. 

59. 

(European Parliament, § 127) - Calls on the Commission to verify the origin of the 
infringement of public procurement rules;  

Commission's response: 

The  Commission  is  taking  the  requested  action.  The  Commission  has  recently 
initiated an ex-post evaluation of the relevance, effectiveness and efficiency of the 
basic  EU  public  procurement  legislative  framework  (Directives  2004/17/EC  and 
2004/18/EC).  The  evaluation  will  focus  primarily  on:  (1)  analysing  the  cost-
effectiveness  of  public  procurement  procedures  and  rules,  including  compliance 
costs  and  administrative  burden;  (2)  examining  ways  in  which  EU  public 
procurement framework can be used to support other policy objectives (promoting 
innovation,  environmental  protection  and  social  inclusion).  The  evaluation  will 
also  include  description  of  Member  State  implementation  and  administrative 
structure to implement public procurement policy, including EU legislation in this 
area. The results of the evaluation will be finalised by summer 2011. 

In addition, a Commission interservice task force is examining the most common 
public  procurement  issues  arising  in  the  context  of  implementation  of  cohesion 
projects. 

EN 

44 

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The Commission will, where applicable continue to audit the application of the EU 
directives on public procurement by carrying out its own enquiries in some cases 
or by asking the Member States' audit authorities to perform such enquiries on its 
behalf. 

60. 

(European  Parliament,  §  128)  -  Encourages  the  Commission  to  present  by  2011  at 
the latest a proposal on tolerable risk of error in the Cohesion policy area, which has 
been the most error-prone area;  

Commission's response: 

The Communication "More or less control. Striking the right balance between the 
administrative costs of control and the risk of error" of 26 May 2010 (COM(2010) 
261)  included proposals on  tolerable  risk  of error  for  Rural development and for 
Research,  Energy  and  transport.  For  "Cohesion  Policy",  a  new  analysis  will  be 
presented  towards  the  end  of  2011,  once  2010  DAS  results  are  available.  It  is 
important  that  this  analysis  is  based  on  2010  data  during  which  the  new  legal 
framework (2007-2013 legislation) with its stronger control provisions will govern 
most expenditure and newly implemented simplifications will have kicked in. 

In line with the objective of its future TRE proposals, the Commission will analyse 
the  resources  available  and  the  part  of  those  resources  dedicated  to  the  control 
systems when defining a cost-effective level of control for all the remaining policy 
areas. 

61. 

(European Parliament, § 129) - Calls on the Commission to make an initial analysis, 
as  a  matter  of  urgency,  of  the  cost-benefit  ratio  existing  between  the  resources 
dedicated to control activities in DG REGIO and DG EMPL and the results obtained 
by these controls;  

Commission's response: 

The Commission is taking the recommended action. It has already carried out an 
initial analysis on the cost of controls and their results in the Cohesion area for the 
2000-2006 period. The results of this analysis were published by the Commission 
in  its  Communication  on  the  concept  of  tolerable  risk  of  error  (COM(2008)866 
final).  The  Commission  will  present  towards  the  end  of  2011  an  analysis  of  the 
same concept, based on analysis of the 2010 DAS, which will cover the first year 
when  the  strengthened  control  provisions  for  the  2007-2013  legislative  period 
govern the majority of expenditure in this area. 

62. 

(European  Parliament,  §  131)  -  Stresses  the  need  to  ensure  that  the  situation  in 
which,  with  the  2000-2006  programming  period  coming  to  an  end,  national 
authorities,  under  pressure  to  absorb  all  committed  funds,  may  have  submitted  an 
increasing  number  of  unforeseen  projects,  will  not  be  repeated  in  the  current 
programming  period  and  calls  on  the  Commission  to  strictly  apply  corrective  and 
dissuasive  measures  (suspensions  of  payments  and  financial  corrections)  against 
Member States where appropriate;  

EN 

45 

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Commission's response: 

The Commission is taking the recommended action. The automatic decommitment 
rule  applicable  in  the  period  2000-2006  ensured  that  expenditure  is  used  by 
Member  States  in  a  uniform  manner  throughout  the  period,  in  order  to  avoid 
massive  expenditure  declarations  in  the  last  year,  as  was  the  case  in  1994-1999. 
The  Commission  monitored  in  addition  the  advance  in  the  implementation  of 
programmes  through  participation  in  monitoring  committees  and  continuous 
contacts  with  Member  States  authorities.  In  addition,  in  the  context  of  the 
economic crisis and the risk of losing funds, the Commission granted an extension 
to the eligibility period for some programmes. 

The  introduction  in  the  operational  programmes  of  projects  first  financed  at  a 
national  level  is  not,  per  se,  an  irregular  practice  but  compliance  with  all  legal 
requirements and control criteria should be fully applied to those projects. In 2005 
the Commission issued guidance to Member States confirming that these projects 
could only be included retrospectively in the operational programmes if they meet 
all  requisite  conditions,  including  fulfilment  of  the  programme  objectives  and 
selection criteria, the eligibility criteria, the performance of controls, the publicity 
requirements etc. 

Where  these  requirements  were  not  met,  the  Commission  has  already  applied 
suspensions of payments and financial corrections where necessary. 

Finally,  the  Commission  has  put  in  place  and  is  implementing  a  comprehensive 
closure  strategy,  which  includes  a  series  of  preventive  (closure  guidelines, 
seminars  and  training  to  Member  States  authorities,  review  of  the  work  of  the 
winding-up bodies) and corrective measures (strict application of suspensions and 
financial corrections and closure audits) in order to ensure that final expenditure 
declared to the Commission is legal, regular and eligible. 

63. 

(European Parliament, § 132) - Calls on the Commission to perform its supervisory 
role with the utmost rigour in what concerns the increased probability that the control 
systems  fail  to  prevent  and  detect  errors  during  the  start-up  phase  due  to  the  slow 
start-up of programmes related to the 2007-2013 programming period due to the late 
submission by Member States of compliance assessment reports and audit strategies;  

Commission's response: 

The  Commission  is  taking  the  requested  action.  In  spite  of  not  having  approved 
management and control systems, it considers that there is a limited risk that such 
systems,  approved  at  national  level,  do  not  comply  with  requirements  and  do  not 
function  effectively.  Mitigating  controls  are  in  place  and  the  Structural  Funds 
Directorates-General have taken this risk into account in its audit strategy and also 
drawn  this  risk  to  the  attention  of  the  audit  authorities.  Each  national  audit 
authority has to present to the Commission their conclusions from the audit of a 
representative sample of operations on expenditure declared in each year and an 
opinion on the effective functioning of systems. 

When  irregularities  are  detected  the  Commission  will  not  hesitate  to  perform  its 
supervisory  role  and,  where  necessary  has  already  interrupted  payments,  or 

EN 

46 

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launched procedures to suspend payments or proceed with financial corrections, in 
accordance with the strengthened regulatory framework for 2007-2013. 

64. 

(European Parliament, § 133) - Requests the Commission to identify and spread best 
practices amongst Member States in order to allow an increased absorption of funds 
and  improved  beneficiary  cash-flow  by  amending  and  simplifying  the  Structural 
Funds implementing regulations at national level;  

Commission's response: 

The Commission is taking the requested action. The Commission will continue its 
training  and  guidance  activities  to  identify  and  spread  best  practices  amongst 
Member States at all levels. 

65. 

(European  Parliament,  §  135)  -  Requests  the  Commission  to  provide  it,  in  its 
forthcoming  synthesis  report  and  its  DGs'  annual  activity  reports,  with  clear 
information  identifying  those  Member  States  the  control  systems  of  which  are  the 
least effective and producing an annual grading of Member States for each fund;  

Commission's response: 

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  Standing  Instructions  for  the  AARs  were  subject  to  a  major  overhaul, 
including the introduction of a clear distinction between the information to provide 
on the financial and nonfinancial internal control systems and the building blocks 
supporting the declaration of assurance. 

The  Peer  Review  of  the  annual  activity  reports  was  further  enhanced  by  early 
interventions  by  Central  Services  (pre-peer  reviews)  and  systematic  feedback  to 
services on the quality of their reports. 

Most Commission services already provide in their annual activity reports a clear 
assessment  of  the  effectiveness  of  their  (and  Member  State's  regarding  shared 
management) internal control systems. 

They also provide a clear identification of programmes and Member States which 
are  the  least  effective  and  detailed  information  on  the  identified  weaknesses  and 
remedial measures underway. 

The  Synthesis  report  adequately  addresses  the  weaknesses  identified  and  is  not 
intended to set up a grading list of the best and worst management systems. 

66. 

(European Parliament, § 136) - Draws attention to the Court's observation, similar to 
that  for  the  year  2007,  that  the  scope  and  scale  of  the  reservations  in  the  annual 
activity reports understate the gravity of the problems of irregularity and ineffective 
control  systems;  takes  the  view,  therefore,  that  the  DGs'  approach  should  be  more 
prudent and the scope of the reservations consequentially greater;  

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Commission's response: 

The  Commission  considers  that  the  reservations  in  the  2008  Annual  Activity 
reports are in line with the materiality criteria established and give a fair view of 
the  existing  system  weaknesses.  Reservations  of  DGs  Regional  Policy  and 
Employment,  Social  Affairs  and  Equal  Opportunities  were  based  on  a  detailed 
analysis  of  each  operational  programme,  using  a  variety  of  sources,  notably  the 
Commission's  own  audit  work,  the  results  of  the  Court's  audits,  national  audit 
work, the Annual Summaries, annual implementation reports and meetings of the 
Monitoring  Committees.  This  analysis  resulted  in  more  narrow  reservations  than 
in 2007 due to the implementation of the Action Plan and vigorous action by the 
Commission  to  suspend  payments  and  to  make  financial  corrections  where 
justified.  The  Commission  concluded  with  effective  results  24  national  corrective 
action plans, followed up all reservations in the 2007 AARs and applied more than 
€3.8 billion financial corrections in 2008 and 2009. 

It is important to note that the Court's findings show that the errors detected by the 
Court in Cohesion Policy in 2008 are concentrated on programmes for which the 
Commission  was  already  aware  of  deficiencies  and  had  put  in  reservation  the 
relevant  programmes  and  had  taken  beforehand  appropriate  action,  such  as 
suspensions of payments, action plans and financial corrections. 

67. 

(European  Parliament,  §  138)  -  Takes  the  view  that  the  Commission  should  make 
sure that, in future, only irregularities identified by Member States themselves can be 
substituted  for other  expenditure without any  loss of funding for the Member  State 
concerned;  

Commission's response: 

The legal framework provides that if the Commission applies a financial correction 
and the Member States accepts this correction, it can re-use the funds for another 
eligible project within the same programme.  

68. 

(European Parliament, § 139  (1st part)) -  Calls on the Commission to take further 
steps to ensure that Member States fulfil their obligations by rigorously verifying and 
assessing the reliability and completeness of the reported data, and looks forward to 
receiving the new guidance note to certifying authorities, including the Commission's 
recommendations for improving reporting procedures;  

Commission's response: 

The  Commission  is  taking  the  requested  action.  In  the  framework  of  its  2008 
Action Plan the Commission has carried out audits of Member States' systems for 
withdrawals  and  recoveries  in  19  Member  States.  The  remaining  Member  States 
will be audited in 2010. 

For  the  2007-2013  period,  there  is  a  standardised  procedure  for  submission  of 
recovery statements through the IT system SFC2007. The Commission expects that 
this  reporting  procedure  will  improve  the  quality  of  information  in  its  disposal. 
Member States are also required to distinguish corrections deriving from their own 
controls and those from EU audits. 

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The  requested  guidance  note  has  already  been  finalised  in  early  2010  (COCOF 
10/0002/00/EN) and will be communicated to the European Parliament. 

69. 

(European Parliament, § 139 (2nd part)) - Requests the Commission to identify in 
its  forthcoming  synthesis  report  those  Member  States  that  are  not  fully  complying 
with the reporting requirements;  

Commission's response: 

The  requested  action  has  been  taken.  The  Commission  has  published  the 
information on the quality of the Member States' reporting systems on withdrawals 
and  recoveries  in  the  Annual  Report  on  the  implementation  of  the  Structural 
Funds.  The  Structural  Funds  DGs  have  published  this  information  in  their 
respective Annual Activity Reports. 

70. 

(European  Parliament,  §  142)  -  Asks  the  Commission  to  constantly  monitor  the 
plausibility  of  the  reported  numbers  and  to  verify  on  the  basis  of  its  own 
investigations  the  efficiency  of  reporting  systems  where  the  reported  number  of 
irregularities appears to be excessively low;  

Commission's response: 

The  Commission  is  taking  the  requested  action.  In  the  framework  of  its  2008 
Action Plan the Commission has carried out audits of Member States' systems for 
withdrawals  and  recoveries  in  19  Member  States.  The  remaining  Member  States 
will be audited in 2010. 

71. 

(European  Parliament,  §  143  (1st  part))  -  Calls  on  the  Commission  to  provide 
detailed  information  on  the  implementation  figures  and  distribution  schemes  for 
payments made out of the European Union Solidarity Fund by the Greek authorities 
following the devastating forest fires;  

Commission's response: 

The  Commission  is  taking  the  requested  action.  Detailed  information  on 
implementation  of  the  EU  Solidarity  Fund  grants  as  well  as  on  the  obligatory 
controls to be carried out by a Member State under the Solidarity Fund regulation, 
as  well  as  on  any  possible  corrections  made  as  a  result  of  such  controls,  are 
provided by the Member State when it submits its Validity Statement together with 
the  final  report.  Greece  has  only  recently  submitted  such  a  statement.  The 
document is currently in the process of being analysed by the Commission. 

72. 

(European  Parliament,  §  143(2nd  part))  -  Calls  on  the  Commission  to  provide 
information  on  the  ex-post  controls  carried  out  and  the  results  thereof  on  the 
implementation  figures  and  distribution  schemes  for  payments  made  out  of  the 
European Union Solidarity Fund by the Greek authorities following the devastating 
forest fires;  

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Commission's response: 

The  Commission  is  taking  the  requested  action.  Detailed  information  on 
implementation  of  the  EU  Solidarity  Fund  grants  as  well  as  on  the  obligatory 
controls to be carried out by a Member State under the Solidarity Fund regulation, 
as  well  as  on  any  possible  corrections  made  as  a  result  of  such  controls,  are 
provided by the Member State when it submits its Validity Statement together with 
the  final  report.  Greece  has  only  recently  submitted  such  a  statement.  The 
document is currently in the process of being analysed by the Commission. 

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50 

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Employment and social affairs 

73. 

(European Parliament, § 148) - Encourages the Commission to put its own figure on 
the ESF error rate and to examine the possibility of greater autonomy for the ESF in 
the forthcoming financing period;  

Commission's response: 

The error rate provided by the Court of auditors on a yearly basis is the result of an 
extrapolation  based  on  its  audit  work  conducted  on  a  sample  of  transactions 
covering all Member States and all the funds under the Cohesion policy chapter. 
Even if it is not possible for the  Court to extrapolate an individual  error  rate for 
the  ESF  (because  ESF  transactions  are  still  part  of  the  Cohesion  sample),  some 
specific figures for each fund can be found in the Annex 6.1 of the 2008 annual 
report. 

It  should  also  be  noted  that  neither  the  Commission  nor  the  Court  compile  an 
error rate by fund as this is not required by the applicable legal framework and this 
would require diverting significant resources from other essential audit activities. 
The  audits  performed  by  Member  States  audit  bodies  are  partially  representative 
and partially risk based, and by the Commission risk-based, error rates cannot be 
produced  or  considered  representative  of  the  programmes.  For  Structural  funds, 
for  the  period  2007-2013,  the  regulations  require  the  audit  authorities  to  provide 
the Commission with annual control opinions and error rates, as a result of their 
audits,  which  will  be  based  on  random  statistical  samples.  Therefore  such  rates 
will better reflect the exact situation per programme, year after year. 

Nonetheless,  the  error  rate  cannot  be  used  as  the  only  indicator  of  the  effective 
functioning  of  the  systems.  DG  EMPL  audit  services  are  already  providing  an 
overall assessment programme by programme in the Annual Activity Reports; and 
are working closely with the national audit authorities to provide assurance to the 
Director General for Employment that control systems function effectively. 

The  Commission  takes  note  of  the  suggestion  of  the  European  Parliament  for  a 
greater  autonomy  of  the  ESF.  This  question  will  naturally  be  examined  in  the 
framework  of  the  discussions  and  negotiations  around  the  new  Financial 
Framework 2014-2020. 

74. 

(European  Parliament,  §  150)  -  Notes  that  the  error  rate  does  not  necessarily  refer 
solely  to  fraud,  and  calls,  therefore,  for  a  clear  distinction  to  be  made  between 
instances of fraud and error rates in the future;  

Commission's response: 

In its audits for DAS 2008, the Court of Auditors did not identify any fraud case in 
the  Cohesion  policy  area.  The  Commission  pursues  actively  its  activities  in  the 
prevention  and  detection  of  fraud  in  close  co-operation  with  OLAF.  The  audit 
services  of  the  Commission  are  also  implementing  the  "Joint  fraud  prevention 
strategy  for  ERDF,  ESF  and  CF"  approved  in  December  2008  by  DG  EMPL, 
REGIO and OLAF. 

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75. 

(European  Parliament,  §  151  (1st  part))  -  Calls  for  an  appraisal  of  the  reporting 
requirements, with a view to ensuring that information is not sought twice;  

Commission's response: 

All  reporting  requested  to  Member  States  authorities  are  subject  to  legal 
requirements  in  the  specific  regulation  on  Structural  Funds.  The  two  reports 
mentioned are established by different authorities on different purposes. 

The  annual  control  report  contains  the  findings  of  the  audits  carried  out  during 
the  previous  year  by  the  national  audit  authority.  The  common  audit  strategy  set 
up  by  art.  73  of  Reg.  1083/2006  is  specifically  aimed  at  avoiding  duplication  of 
audit  work  by  setting  up  a  co-operation  framework  between  national  and 
community audit services. 

The annual implementation report is established by the management authority in 
application of art. 67 of Reg. 1083/2006 and covers all issues (including financial) 
in relation to the implementation of the operational programme on the ground. 

The  Commission  has  specifically  addressed  the  issue  of  the  simplification  in 
reporting requirements by adopting Reg. 846/2009 of 1 September 2009 amending 
implementing regulation 1828/2006 (OJ L 250, 23.9.2009, p. 1–62). 

76. 

(European  Parliament,  §  151  (2nd  part))  -  Calls  on  the  Commission,  therefore,  to 
develop  proposals  to  improve  and  expand  the  existing  reporting  requirements, 
incorporating a sanctions mechanism;  

Commission's response: 

The Commission proposal for a new Financial Regulation (art. 53a) reinforces the 
reporting  obligations  of  the  Member  States  in  the  framework  of  shared 
management.  Although  specific  sanctions  on  reporting  requirements  by  national 
authorities  are  not  provided  by  the  legal  framework  currently  applicable  to 
Structural Funds for the 2007-2013 programming period, in the absence of annual 
audit  reports,  the  Commission  may  interrupt  interim  payments  until  the  required 
reports  are  received.  The  Commission  has  already  applied  such  payment 
interruptions on this basis. 

77. 

(European  Parliament,  §  152)  -  Notes  the  scope  for  conflicts  of  interest  between 
those responsible for managing funding and beneficiaries of funding in the allocation 
process; calls on the Commission to take steps to enforce the rules on the prevention 
of conflicts of interest in the allocation process by providing national administrations 
with adequate resources;  

Commission's response: 

Regulation 1828/2006 requires in its art. 13(5) that where the managing authority 
is also a beneficiary under the operational programme, Member State's authorities 
should  provide  for  arrangement  for  the  administrative  verifications  and  on-the-
spot  controls  to  be  provided  by  the  managing  authority  to  ensure  an  adequate 
separation  of  functions  in  accordance  with  art.58(b)  of  Reg.1083/2006.  The 

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Commission  services  pay  attention  to  the  respect  of  this  obligation  in  their  audit 
activities and take legal actions (interruptions, suspensions or financial correction) 
where an audit report shows that these legal requirements are not respected. 

78. 

(European  Parliament,  §  153)  -  Underlines  the  specific  needs  of  target  groups  and 
project  leaders  in  the  ESF;  suggests  that  the  co-financing  of  projects  should  also 
include  voluntary  activities  in  non-profit-making  organisations  and  contributions  in 
kind;  

Commission's response: 

Non-profit  bodies  are  typical  beneficiaries  in  ESF  operational  programmes.  In-
kind  contributions  are  specifically  recognised  by  art  56  of  Reg.  1083/2006  as 
eligible  expenditure  under  the  conditions  that  they  are  eligible  under  national 
eligibility rules, their amount is justified by accounting documents with probative 
value equivalent to invoices and the co-financing from the Funds does not exceed 
the total eligible expenditure excluding the value of in-kind contributions. 

79. 

(European Parliament, § 154) - Recalls the latest amendments made to the Structural 
Fund Regulations (Regulation (EC) No 1341/2008 , Regulation (EC) No 284/2009 , 
Regulation (EC) No 396/2009 , Regulation (EC) No 397/2009 and Regulation (EC) 
No  846/2009  )  with  the  aim  of  simplifying  administrative  procedures;  calls  for  a 
report on the effects of these amendments;  

Commission's response: 

The Commission estimates that the full effect of the simplification on the error rate 
may only be seen later on in the 2007-2013 programming period, when the impact 
of  the  new  regulatory  framework  and  all  simplification  measures  adopted, 
including simplified costs, will produce tangible results. Nevertheless, it estimated 
in  its  impact  report  on  the  Commission  Action  Plan  (COM(2010)52)  that  the 
decrease  in  error  rates  for  representative  samples  taken  from  2007-2013 
programmes  is  already  an  indication  of  the  first  impact  of  the  improved  control 
mechanisms in the 2007-2013 regulations and of the strengthened supervisory role 
of the Commission following its Action Plan. 

80. 

(European Parliament, § 155) - Notes that such simplification procedures are key to 
reducing  administrative  burdens  at  national,  regional  and  local  levels;  stresses  the 
importance of ensuring that such procedures do not lead to a higher error rate in the 
future;  

Commission's response: 

The Commission fully agrees with the Court of Auditors which advised to pursue 
further  the  simplification  with  care.  The  Commission  intends  to  pursue  the 
simplification  exercise  through  practical  working  arrangements  with  Member 
States, while maintaining the momentum reached through the Action Plan of 2008 
in  the  strict  application  of  the  reinforced  regulatory  framework  for  2007-2013, 
including  by  applying  interruptions,  suspensions  of  payments  and  financial 
corrections where necessary. The Commission services will continue to bring their 
assistance to Member States authorities in the implementation of the simplification 

EN 

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exercise. In the specific context of ESF operations, the Commission services have 
their 
already  offered 
implementation - the schemes envisaged at a national level for the declaration of 
indirect costs at a flat rate, which, at 30 June 2010, conducted to the approval of 20 
schemes applicable to operational programmes of 10 Member States. 

to  Member  States  authorities 

to  review  -  before 

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Internal policies 

81. 

(European  Parliament,  §§  156-164,  168-169)  -  As  regards  research,  energy  and 
transport, the European Parliament welcomes the slight reduction in errors compared 
to  previous  years  for  this  policy  group  as  well  as  the  improvement  concerning  late 
payments,  the  Court  having  found  that  the  Commission  considerably  improved  its 
performance in 2008 in making timely payments to beneficiaries; 

Urges  the  Commission  to  do  its  utmost  to  maintain  the  positive  2008  trend  in  this 
area, which is under the Commission's direct financial management; 

Nevertheless,  notes  with  concern  that,  in  general,  as  regards  research,  energy  and 
transport the Court's audit once again reveals a material level of error in payments to 
beneficiaries and in the Commission's supervisory and control systems, which do not 
sufficiently mitigate the inherent risk of reimbursement of overstated costs; 

Is  especially  concerned  by  the  outstanding  reservation  made  by  the  four  Research 
family  services  due  to  the  rate  of  residual  errors  affecting  cost  claims  in  the  Sixth 
Framework Programme (FP6); 

Notes  also  the  systemic  disparity  in  the  treatment  of  the  EU's  funds'  recipients  in 
different sectors, programmes and management modes; 

Is  concerned  that  the  EU's  public  image  may  suffer  as  a  result  of  the  stakeholders' 
realisation that stricter control systems are applied to the agricultural domain than to 
research implementation; 

Notes  that  some  legal  provisions  regarding  research  funding  (e.g.  concerning 
sanctions) were not applied previously, and calls on the Commission to end this state 
of  affairs  and  to  ensure  the  full  and  consistent  application  of  the  existing  legal 
provisions; 

Recalls at the same time its demands raised in its above-mentioned resolution of 23 
April  2009  (paragraph  117  et  al),  in  particular  its  request  for  abstention  from  any 
retroactive changes and for beneficiaries’ legitimate expectations to be honoured, as 
well  as  speeding  up  the  acceptance  of  certificates  concerning  the  methodology 
applied  in  relation  to  average  personnel  costs,  where  no  visible  progress  has  been 
achieved; calls on the Commission, for the purposes of good law-making, to submit 
realistic proposals in terms of both targets and procedures in the future; 

In  that  regard,  notes  with  deep  concern  that  only  one  certificate  concerning  the 
methodology applied in relation to average personnel costs has been approved; 

Stresses  that  the  Commission  must  ensure  rigorous  application  of  the  controls,  in 
particular  by  improving  the  reliability  of  audit  certificates  and  through  effective 
implementation  of  its  ex-post  audit  strategy,  imposing  penalties  where  appropriate 
and  making  timely  recoveries  or  adjustments  in  cases  of  undue  reimbursement  of 
claimed costs, as recommended by the Court; 

Also requests the Commission to reflect on the distribution of activities between the 
research  DGs,  which,  combined  with  the  absence  of  an  integrated  management 

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information  system,  according  to  the  Court  renders  coordination  more  difficult,  in 
particular for the follow-up of audit results;  

Commission's response: 

The  Commission  aims  to  provide  a  coherent  audit  programming,  respecting  the 
single audit approach. 

The implementation of the FP6 audit strategy in place in the Commission will end 
in 2010 and consequently at that time the Commission will get the final error rate 
for  the  whole  FP6. According to the results of the audit strategy, the situation at 
the end of 2009 has further improved. The error rate is, in 2009, 2.21 % instead of 
2.63 % as it was in 2008. 

The  control  systems  implemented  by  the  Commission  in  different  sectors  and 
programmes  are  not  comparable  in  terms  of  strictness  or  leniency.  The 
Commission  implements  internal  control  systems  for  the  management  of  these 
programmes  in  order  to  meet  their  policy  aims  and  under  the  conditions  and 
restrictions set by the legislative authority in an effective and efficient manner at a 
reasonable cost. The funding conditions foreseen in these programmes may differ 
and, as a consequence, a programme may set stricter conditions than other. 

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 an stringent control 
of the costs claimed, which has resulted in a reduction of the error rates over time, 
as noted by the Court of Auditors and the European Parliament. Furthermore, the 
Commission  is  committed  to  ensuring  that  it  provides  for  uniform  interpretation 
and application of the rules and procedures. 

As regard the comparison with Agriculture it is to be noted that both programmes 
have different policy objectives and funding provisions. The legislation in place for 
Agriculture  defines,  as  a  general  rule,  that  5%  of  the  beneficiaries  should  be 
controlled.  For  the  Research  Sixth  Framework  Programme,  the  audit  policy, 
including extrapolation, has already covered in excess of 50% of the expenditure.  

As regards the application of sanctions, the Commission now systematically applies 
liquidated damages whenever a beneficiary is found to have overstated expenses.  

The Commission can mainly ensure legality and regularity by conducting ex-post 
audits  and  controls,  in  particular  on  the  premises  of  the  beneficiary,  and  then 
recovering  any  amount  due.  Reliance  on  the  ex-post  detection  and  correction  of 
errors  to  ensure  the  legality  and  regularity  of  the  payments  requires  the 
implementation  of  a  large  number  of  recoveries,  putting  a  very  heavy  burden  on 
both  the  Commission  and  the  beneficiaries.  In  accordance  with  the  provisions  of 
the model grant agreement, the Commission may carry out audits up to five years 
after the final payment of a project and make the relevant financial adjustments.  

The corrections proposed by the Commission do not result from the application of 
new  interpretations,  but  from  the  audit  of  cost  statements  submitted  by 
beneficiaries. In certain cases, the auditors have found accounting practices which 

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required  legal  guidance  to  decide  as  of  the  eligibility  of  costs.  These  were  newly 
confronted  issues;  the  required  interpretations  did  not  alter  prior  decisions  or 
practices. 

The  coverage  of  expenditure  by  ex-post  audits  has  continued  to  increase  and  the 
research DGs achieved the targeted number of audits for the year. The number of 
completed  audits  increased  from  1  090  at  the  end  of  2008  to  1  911  at  the  end  of 
2009. 

The  Commission  considerably  increased  the  amount  of  ineligible  costs  recovered 
during  2009.  Nevertheless,  additional  efforts  will  be  undertaken  in  order  to 
improve the timely implementation of audit results. The Commission adopted on 15 
December  2009  a  Communication  on  the  simplification  of  recovery  process 
(SEC(2009)1720). The simplification introduced provides the possibility to resort to 
a flat rate to determine the outstanding debts and considers certain charges related 
to personnel (direct taxes and social charges) as eligible. 

Concerning the acceptance of the certificates on methodology, at the end of May 
2010,  25  beneficiaries  had  received  ex-ante  certification  of  their  costing 
methodologies.  In  its  Communication  on  simplification  (COM(2010)187,  dated 
29.4.2010), the Commission proposes to take into account any average personnel 
cost  methodology  applied  as  usual  accounting  practices  of  the  beneficiaries, 
including  a  cost  centre  based  approach,  as  long  as  they  are  based  on  actual 
personnel costs registered in the accounts and any double funding of costs under 
other cost categories is excluded. 

As regards coordination between the Research DGs, the Commission has already 
set  up  tools  and  procedures  ensuring  an  effective  coordination  in  particular  as 
regards the follow-up of audit results. The audit reports' findings (issued either by 
the Commission services or by the Court of Auditors) are followed up by each DG. 
Their implementation from the audit report till the offsetting in the next payment 
to  the  same  beneficiary  (or  till  their  recovery  through  a  recovery  order)  is 
constantly monitored and reported. 

Moreover,  in  case  the  beneficiary  is  re-selected  for  audit,  the  respective  external 
auditors prepare the audit taking into account the results of previous audit reports. 
The  research  family  DGs  have  regular  meetings  on  these  issues  co-ordinating 
questions  of  eligibility.  A  Wiki  site  where  audit  reports  from  all  DG's  of  the 
Research  family  are  up-loaded  has  been  established  to  exchange  information  on 
individual audit results. 

Finally and further to the observations from the Court and the past requests from 
the  Parliament  and  the  Council  the  Commission  has  taken  remedial  action  to 
improve the quality of the audit certificates in FP7. FP7 audit certification is based 
on "agreed upon procedures", which require the certifying auditor to perform pre-
defined procedures and report on that basis factual findings. This approach should 
lead to a reduction in errors of interpretation of the eligibility rules by the auditors. 

82. 

(European Parliament, §§ 166-167) - The European Parliament is concerned that the 
current regulation of the existing Framework Programme does not correspond to the 

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needs of a modern research environment and believes that further modernisation and 
simplification are essential for a new Framework Programme; 

Considers that simplification of the calculation rules for claimed costs is necessary in 
order to improve the situation, and invites the Commission to continue its efforts to 
devise the most easily applicable rules for beneficiaries of the programmes; asks for 
a clear definition of the necessary criteria for assessing whether beneficiaries’ costing 
methodologies comply with the regulatory requirements;  

Commission's response: 

The  Commission  acknowledges  that  despite  the  simplifications  achieved  already 
under the 7th Framework Programme, there is a need for further simplification of 
the regulatory framework governing the implementation of EU research, with the 
goal  of  assuring  the  attractiveness  of  the  programmes  for  the  most  excellent 
researchers worldwide and for the most innovative enterprises, including SMEs.  

In  this  context,  a  Communication  from  the  Commission  to  the  European 
Parliament,  the  Council,  the  European  Economic  and  Social  Committee  and  the 
Committee  of  the  Regions  on  simplifying  the  implementation  of  the  Research 
Framework Programmes has been adopted on 29 April 2010 (COM(2010)0187).  

Moreover, on 28 May 2010 the Commission adopted its proposal for a revision of 
the  Financial  Regulation  and  a  Communication  on  the  level  of  tolerable  risk  of 
error  in  the  policy  areas  of  research,  energy  and  transport  as  well  as  rural 
development. 

The  messages  of  the  Commission  Communication  on  Simplification  are  the 
following: 

- This is the right time for an inter-institutional debate on simplification. Research 
and  innovation  are  at  the  core  of  the  Commission's  Europe  2020  initiative.  The 
European  plan  for  research  and  innovation  and  the  Innovation  Union  flagship 
initiative will require clarity of objectives and instruments, consistency and stability 
of rules and lightness and speed of administrative procedures and processes.  

-  Simplification  is  closely  linked  to  the  general  accountability  parameters  and  to 
the level of tolerable risk of error. The Commission agrees with the Parliament and 
the Court of Auditors that in the long run a simplified set of rules would lead to a 
"natural" reduction of the error rates. However, in the interim period before such 
profound  changes  take  effect,  a  research-specific  level  of  tolerable  risk  of  error 
would  permit  an  adjustment  of  the  control  strategy  that  has  exacerbated  the 
perceived complexity of grant management by the beneficiaries.  

-  Simplification  of  EU  research  and  innovation  funding  requires  a  re-balancing 
between  trust  and  control  and  between  risk  avoidance  and  risk-taking.  The 
Commission cannot act alone. Full commitment and political support of the other 
EU institutions is necessary.  

-  The  Communication  does  not  present  legislative  proposals  but  options  for 
opening a debate. 

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83. 

(European  Parliament,  §§  173-175)  -  The  European  Parliament  welcomes  the 
achievement  of  99,26  %  of  the  implementation  of  the  LIFE+  operational  budget; 
notes  that  196  projects  were  selected;  notes  that  52  %  of  funding  granted  was 
awarded  to  ‘nature  and  biodiversity’  projects;  considers,  however,  that  there  is  still 
room  for  improvement  in  the  Commission's  management  so  as  to  ensure  the 
sustainability of co-financed projects; 

Notes  in  that  regard  that  improvements  could  be  achieved  by  ensuring  that 
supporting measures are already in place when calls for proposals are launched, by 
further improving the dissemination of knowledge generated by LIFE projects and by 
strengthening the systematic follow-up of projects after their closure; 

Calls  on  the  Commission  to  develop  further  assistance  and  specific  training  for 
applicants  and  user-friendly  guidelines;  stresses  that  immediate  attention  should  be 
given to those programme parts where the level of implementation has become low 
and to act accordingly.  

Commission's response: 

The  Commission  is  currently  addressing  the  issues  of  sustainability,  knowledge 
dissemination  and  project  follow-up.  Increased  attention  is  being  paid  to  the 
programme  strands  with  lower  implementation  level,  inter  alia  by  clarifying  the 
application guidelines and providing concrete examples in them. 

84. 

(European Parliament, § 176) - The European Parliament underlines the importance 
of  providing  further  and  focused  assistance  to  applicants  engaged  in  implementing 
projects  under  the  public  health  programme,  in  order  to  avoid  unreasonable  cost 
claims  and  incomplete  financial  reports,  which  result  in  lengthy  procedures; 
additionally, considers that calls for tenders must be clear and user-friendly, in order 
to  avoid  project  applications  which  are  clearly  not  eligible  for  funding  due  to  their 
size and associated high costs or which are of poor quality.  

Commission's response: 

Efforts  to  improve  understanding  of  Call  for  proposals  have  been  pursued  with 
EAHC  since  its  creation.  Results  of  2010  Call  for  proposals  show  an  improved 
satisfaction rate of applicants. 

85. 

(European  Parliament,  §  179)  -  The  European  Parliament  regrets  that  the  annual 
activity  reports  of  the  Commission  Directorates-General  and  Services  are  available 
on-line  in  only  one  language;  urges  the  Commission  to  improve  the  situation  as 
regards the coming year's reports.  

Commission's response: 

The  Synthesis  Report  is  already  translated  into  all  official  languages.  The 
presentation of the Annual Activity Reports of all Commission services, annexed to 
the  Synthesis  Report,  in  all  official  languages  would,  however,  not  be  cost-
effective. The translation of those management tools in all EU official languages 
would substantially increase the administrative costs of the Commission. 

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86. 

(European Parliament, § 181) - The European Parliament deplores the fact that the 
frequency of physical checks done by Members States on imports remains very low, 
despite  the  frequent  recommendations  of  the  Court  of  Auditors  and  the  fact  that 
customs  duties  represent  a  considerable  amount  of  the  total  revenue  for  the  2008 
budget;  consequently,  calls  on  the  Commission  to  ask  Member  States  to  find  an 
appropriate balance between physical checks at import and the post-clearance audits 
of operators.  

Commission's response: 

The Commission is taking the requested action.  

1) The setting-up of adequate levels of physical checks and post-clearance audits 
of  operators  at  import  should  be  based  upon  appropriate  risk  assessment  of  the 
products and/or economic operators in question. The appropriate control methods 
are  thus  closely  connected  to  the  identified  types  of  risks.  In  practice  the 
Commission  encourages  the  Member  States  to  use  appropriate  risk  analysis 
methods  and  controls  through  the  legally  binding  exchange  of  risk  related 
information  via  the  electronic  Community  Risk  Management  System  and  is 
monitoring  periodically  the  use  of  such  information  by  the  Member  States.  In 
addition  the  Commission  in  July  2009  initiated  a  project  to  study  and  assess  the 
degree  of  convergence  of  the  Member  States'  customs  controls  and  control 
methods and make recommendations as appropriate. 

2) The Commission considers that these risk-based checks should be supplemented 
by some randomly selected checks. It has already expressed this view in its replies 
both to the Court of Auditors, concerning the simplified procedures audit, and to 
Member States by a variety of means including own resources inspections. 

3)  When  drafting  the  modernised  Customs  Code  Implementing  Provisions  on 
simplified  procedures  and  centralised  clearance  and  relevant  guidelines  (2009-
2011) special attention is given to the need for: 

- performance of physical checks  of  the goods, both for fiscal and safety/security 
purposes 

- improvement of pre/post audit controls with regard to simplified procedures and 
centralised clearance. 

87. 

(European Parliament, §§ 188-191 & 195) - The European Parliament is concerned 
that,  for  the  second  consecutive  year,  there  has  been  a  low  uptake  of  payment 
appropriations  for  transport  safety  (79  %);  notes  that  the  uptake  of  payment 
appropriations for the Marco Polo II programme was particularly low (40 %) and that 
only  67  %  of  payments  for  the  optimisation  of  transport  systems  was  taken  up; 
recalls that, in all these cases, the amount in the 2008 budget was the one proposed in 
the Commission’s preliminary draft budget (PDB); 

Regrets the exceptionally low take-up rate of payment appropriations for passenger 
rights (27 %); notes that the payments undertaken represent only 55 % of the amount 
proposed  by  the  Commission  in  its  PDB;  underlines  that  investing  in,  inter  alia, 

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information  to  passengers  on  their  rights  is  of  high  importance  for  the  effective 
application of the rules; 

Insists that the take-up rate of payment appropriations for the GALILEO programme 
(50 %) is inadequate, given its importance for the sustainable logistics and transport 
sectors; 

Calls on the Commission to provide a detailed explanation of this underspending and 
to give  an account of  the  measures it will take to ensure that the problem does not 
recur in future; 

Repeats its demand to the Commission to forward to Parliament and to the Council, 
each  year,  a  more  detailed  description  of  expenditure  against  each  budget  line 
compared with the comments/remarks made in respect of the line;  

Commission's response: 

The  underexecution  for  transport  safety  and  optimisation  of  transport  systems  in 
2008  was  mainly  because  implementation  reports  were  received  later  than 
expected.  For  passenger  rights,  the  underexecution  is  because  an  information 
campaign  to  increase  public  awareness  on  passenger  rights  in  airports  was 
postponed  from  2008  to  2009  due  to  a  change  of  priorities.  The  Commission 
continues  to  monitor  implementation  forecasts  in  order  to  ensure  that  credit 
requests are realistic. For Marco Polo II, the underexecution was mainly because 
no financial guarantees were received on time and because there were lower than 
expected payments for previous calls. This situation has now been resolved and the 
budget execution is in line with expectations. 

For  Galileo,  the  Commission  has  also  taken  the  necessary  measures.  The  lower 
take-up  rate  experienced  in  2008  stemmed  from  the  fact  that  the  legal  basis  was 
only  adopted  in  June  2008  and  the  resulting  delegation  agreement  with  the 
European Space Agency could only be signed in December 2008. It was thus not 
possible to fully execute the budget finally adopted, which was 200% higher than 
requested  by  the  Commission;  nevertheless,  150%  of  the  Commission's  initial 
request was executed. In 2009, the adopted budget was fully executed, even though 
it was more than 200% of the Commission's initial request. 

The Commission already sends weekly budgetary implementation tables to the EP 
as well as regular implementation overviews in the context of the Budget forecast 
alert (a spring note in June showing that the plan up to the year end is realistic, an 
autumn  note  in  October  confirming  that  the  necessary  adjustments  have  been 
made  and  the  further  note  in  February  N+1  describing  the  outcome  of  the 
financial  year  along  with  lessons  learnt).  It  also  sends  additional  information  to 
the EP should the need arise, for example in 2009 it sent at the end of August, at 
Parliament's  request,  an  additional  note  on  the  reasons  for  the  under-
implementation of the budget. 

88. 

(European Parliament, § 194) - The European Parliament regrets the lack of data on 
actions in the field of tourism and welcomes the new legal and economic framework 
provided  by  the  Lisbon  Treaty,  which  allows  the  development  of  actions  at  the 

EN 

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European Union level (social and cultural tourism, destinations of excellence, etc.) in 
this sector supported in a multiannual budgetary framework;  

Commission's response: 

The Commission also welcomes the new legal and economic framework provided 
by  the  Lisbon  Treaty  which  will  allow  a  more  comprehensive  set  of  actions,  data 
and  reports  on  European  Tourism.  Taking  full  account  of  this  new  institutional 
framework, the European Commission adopted on 30th June the communication " 
Europe,  the  world's  No  1  tourist  destination  -  a  new  political  framework  for 
tourism  in  Europe  -  COM(2010)  352/final"  which  outlines  21  actions  grouped 
under four priorities:  

(1) stimulating competitiveness in the European tourism sector; 

(2)  promoting  the  development  of  sustainable,  responsible  and  high-quality 
tourism; 

(3)  consolidating  the  image  and  profile  of  Europe  as  a  collection  of  sustainable 
and high quality destinations; 

(4)  maximising  the  potential  of  EU  financial  policies  and  instruments  for 
developing tourism. 

A  comprehensive  action  plan  will  be  discussed  with  the  Member  States  and  with 
public  and  private  European  tourism  stakeholders  by  the  end  of  the  year.  The 
planned actions will mostly complement the initiatives already being carried out in 
the  tourism  field  at  EU  level  and  provide  added-value  to  the  various  tourism-
related measures undertaken by Member States at national/regional level. 

89. 

(European Parliament, §§ 196-198, 201) - In the area of culture and education, the 
European  Parliament  welcomes  the  Commission's  efforts  to  achieve  greater 
transparency and customer-friendliness,  and supports further steps in that direction; 
requests, for the upcoming mid-term reviews of the multiannual programmes, that an 
in-depth  assessment  be  carried  out  of  implementation  and  management  structures; 
recommends  the  inclusion  of  elements  to  measure  client  satisfaction  in  relation  to 
national  agencies;  recalls  in  this  context  that  almost  70  %  of  the  funds  of  the 
multiannual programmes are implemented through national agencies; 

Supports the guidance provided by the Commission to national authorities as regards 
the  supervision  of  the  work  of  national  agencies  with  a  view  to  further  facilitating 
programme management in Member States; encourages the Commission to continue 
the  active  monitoring  of  programme  management  by  national  agencies,  in  order  to 
avoid  interruptions  in  the  implementation  of  parts  of  the  multiannual  programmes; 
supports the strict line taken by the Commission of suspending payments to national 
agencies  in  cases  where  management  weaknesses  are  detected;  calls  on  all  parties 
involved  to  avoid  the  negative  consequences  for  beneficiaries  caused  by  such 
failures; calls on the Commission, in the interests of transparency and cost control, to 
separate the organisational and staff costs of national agencies from funds to be paid 
in grants; 

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Draws attention to the dangers of control measures which are disproportionate to the 
budgets  administered;  considers  that  the  relevant  control  requirements  must  not 
under any circumstances result in pressure to make increases in scale which will raise 
the threshold for participants; 

Notes  the  significant  reduction  of  errors  related  to  payments;  considers,  however, 
that  further  improvements  are  needed  for  interim  and  final  payments;  calls  on  the 
Commission  to  supervise  more  closely  the  annual  ex-post  declaration  process  in 
respect  of  the  Lifelong  Learning  Programme,  by  means  of  monitoring  visits  and 
direct verification.  

Commission's response: 

As regards client satisfaction, for the interim evaluation of the Lifelong Learning 
Programme (LLP), selective surveys in various countries will be carried out which 
are proxy to "customer satisfaction". 

The guidelines for the mid-term evaluation of the Youth in Action Programme also 
include questions relating to client satisfaction.  

Moreover  the  Commission  has  launched,  beginning  2010,  a  survey  among  more 
than  4  500  participants  (young  people,  youth  workers,  youth  NGOs)  in  the 
Programme,  with  a  view  to  measure  the  impact  of  this  participation  on  their 
employability  and  their active citizenship. The results of this survey are available 
at: http://ec.europa.eu/youth/focus/focus1757_en.htm 

As regards "organisational and staff costs of National Agencies" and "funds to be 
paid  in  grants",  although  they  are  covered  by  a  single  agreement  between  the 
Commission and a National Agency, these two sources of funding are separated: 

-  in  their  presentation:  the  annual  draft  budget  submitted  to  the  Budgetary 
Authority indicates separately the funds allocated to the "management fee" aimed 
at cofunding the operating costs of the National Agencies; they are also separated 
in the presentation of the annual budgetary outturn; 

- in their management: the National Agencies are not entitled to transfer any funds 
from one of these two parts of their agreement to the other. 

The  only  holistic  approach  of  these  two  sources  of  funding  relates  to  their  being 
part  of  a  single  agreement.  This  corresponds  to  the  wish  of  speeding  up  the 
transfer  of  funds  to  the  National  Agencies,  so  that  they  can  as  soon  as  possible 
implement  their  annual  work  programme  and  make  payments  to  the  final 
beneficiaries of the programmes concerned. 

As  regards  the  cost  of  controls,  the  Commission  considers  DG  EAC's  control 
measures as currently proportionate to the budgets administered because of: 

- the single audit approach which avoids overlaps and duplication of controls and 
thus limits the cost and administrative burden for beneficiaries, National Agencies 
and Commission; 

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-  extensive  use  of  lump  sums  wherever  possible  (in  particular  for  mobility  and 
other  small  grants)  with  limited  control  effort  for  beneficiaries  and  National 
Agencies; 

-  positive  feedback  from  National  Agencies  witnessing  on  the  decreased 
administrative burden on beneficiaries and on National Agencies. 

As regards errors in interim and final payments, the most recent results of ADEC 
audits confirm very good results in centralised indirect management.  

For centralised direct management, an analysis of results of ex-post controls has 
been performed and an action plan has been established. 

As  regards  closer  supervision  by  monitoring  visits,  this  has  been  implemented  in 
the audit plan 2010-2011. 

90. 

(European Parliament, § 199) - The European Parliament calls on the Commission, 
in  the  light  of  the  revision  of  the  Financial  Regulation,  to  work  towards  a  new 
arrangement under which beneficiaries can be allowed to acquire more assets without 
having to fear that this will result in a reduction in the support allocated to them on 
the basis of EU cofinancing.  

Commission's response: 

The Commission refers to its Proposal for a regulation of the Parliament and the 
Council  on  the  Financial  Regulation  applicable  to  the  general  budget  of  the  EU 
(COM(2010) 260 final).  

To comply with the principle of co-financing, the beneficiary has to assure either 
third  party  financing,  revenue  from  the  action  (difficult  to  prove  in  advance)  or 
self-financing. Often the beneficiary has to rely on his own co-financing. The new 
proposal introduces the rule that the beneficiary may substitute his own funds if : 

- the beneficiary is able to receive additional third party funding during the course 
of an action or 

- income is generated from the project. 

In this way, additional revenue shall not be treated as profit (and shall thus not be 
recovered). 

If profit is still generated, recovery shall be made on a pro-rata basis of the grant 
given.  This  means  that  if  the  project  receives  co-financing  of  60%  from  the  EU 
then 60% of the profits will revert to the EU instead of 100% as today (always up to 
the limit of the amount of the grant). 

91. 

(European Parliament, § 200) - The European Parliament calls on the Commission, 
together with the national agencies, to seek a reasonable and flexible solution to the 
problem  of  interest  on  unspent  decentralised  budgets,  on  which  withholding  tax  is 
paid in the Member States but which national agencies must repay in full.  

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Commission's response: 

This  issue  has  been  resolved  for  the  vast  majority  of  National  Agencies  either 
because  a  withholding  tax  does  not  apply  or  because  the  NAs  have  obtained  an 
exemption  from  their  tax  authorities  or  because  NAs  can  accommodate  these 
amounts under their operating budget. DG EAC continues to monitor the situation 
and to assist the NAs concerned in order to find a satisfactory solution for the few 
remaining cases. 

92. 

(European Parliament, § 202) - The European Parliament calls on the Commission 
to review the bureaucratic obstacles impeding the 'Youth in Action' Programme; calls 
especially for the measures under Actions 1.1 and 1.3 of the Programme to be made 
available  as  low-threshold  services;  emphasises  that  selection  criteria  must  be 
transparent and comprehensible for applicants; calls on the Commission to consider 
the introduction of a new mode of allocation of funding under the 'Youth in Action' 
Programme so as to make funding available to small-scale and youth projects which 
are unable in the current situation to raise their own finance.  

Commission's response: 

As of 2010, following consultation of the National Agencies, the Commission has 
further simplified the access to the Action 1.1 of the Youth in Action Programme, 
by  making  it  possible  for  one  single  promoter  to  submit  a  grant  request  for  an 
entire bilateral youth exchange; moreover the lump sums and scales of unit costs 
applicable  to  the  Programme  have  been  simplified  and  streamlined;  further 
clarification has also been introduced in the 2010 Programme Guide, available at: 
http://ec.europa.eu/youth/youth-in-action-
programme/doc/how_to_participate/programme_guide_10/guide_en.pdf 

93. 

(European  Parliament,  §§  203-204)  -  The  European  Parliament  calls  on  the 
Directorate-General for Freedom, Security and Justice to try to continue maximising 
the level of implementation of commitments and payments in 2009; 

Regrets  that,  within  the  framework  of  the  External  Borders  Fund,  the  first  pre-
financing  payments  to  Member  States  could  not  be  made  by  the  Commission  until 
the final months of 2008, as the implementing rules were only adopted on 5 March 
2008  and  some  Member  States  submitted  the  initial  versions  of  Descriptions  of 
Management  and  Control  Systems  as  well  as  of  the  programming  documents  with 
substantial delays or insufficient quality.  

Commission's response: 

The requested action has been taken. The Commission closely monitors the budget 
implementation and works for the maximisation of the implementation rate in the 
area  of  Freedom,  Security  and  Justice,  in  the  respect  of  sound  financial 
management of budget appropriations. At the end of 2009, the implementation rate 
for  commitments  was  98%  and  90%  for  payments.  In  2009,  the  Commission 
recovered the implementation delay regarding the Solidarity Funds encountered in 
2007  and  2008,  due  to  the  late  adoption  of  the  legal  base.  All  the  commitments 
appropriations have been committed and two reinforcements for a total of 110.9M€ 

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in  payment  appropriations  were  requested  and  received  from  the  Budgetary 
Authority in order to meet payment requests from the Member States. 

94. 

(European  Parliament,  §  209)  -  As  regards  the  second-generation  Schengen 
Information System (SIS II), the European Parliament stresses that the Commission 
should  comply  with  its  reporting  obligations  in  a  more  timely  and  transparent 
manner.  

Commission's response: 

The  Commission  is  taking  the  requested  action.  The  Commission  very  regularly 
informs the EP on the state of play of the SIS II projects: 

a) Twice a year, the Commission transmits a progress report on SIS II to the EP 
and the Council which describes the latest technical developments together with a 
detailed  financial  state of  play of the project. Work on the drafting of this report 
commences  immediately  at  the  end  of  each  reporting  period.  As  this  is  a  formal 
report, approved by the Commission, it is subject to standard internal procedures 
for  consultation  of  other  Commission  services  and  adoption  of  the  document, 
which  in  some  cases  take  several  months.  In  addition  to  the  twice-yearly  reports, 
the  Commission has also addressed  other important reports to the  Parliament, in 
particular the comparison report between SIS 1+RE and SIS II in August 2009. 

b)  Furthermore,  the  Commissioner  regularly  informs  the  Chairman  of  the  LIBE 
on  any  SIS  II-related  outcome  of  JHA  Councils,  and  has  on  several  occasions 
addressed SIS II matters in EP plenary session. Additional updates on the general 
status  of  SIS  II  have  also  been  provided  in  the  framework  of  the  discussions  in 
LIBE concerning the amendments to the migration proposals and the proposal for 
the  establishment  of  the  IT  Agency.  Similarly,  information  on  the  status  of  the 
project  has  also  been  provided  in  the  framework  of  discussions  in  COBU  on 
budgetary matters and on the Agency proposal. 

c) The Commission has responded to 12 written and oral Parliamentary Questions 
on  SIS  II  since  the  beginning  of  2008.  A  number  of  letters  have  also  been 
addressed  to  the  Parliament  providing  further  information  on  the  project,  in 
particular, in follow up the resolution of EP plenary from 19 October. 

95. 

(European  Parliament,  §§  212-215)  -  The  European  Parliament  reminds  the 
Commission that under Article 8 of the Treaty on the Functioning of the European 
Union the promotion of equality between men and women is a fundamental principle 
of the European Union and should be respected in all European Union activities, and 
therefore should also be traceable in the European Union budget discharge: 

Regrets that gender budgeting has still not been implemented; therefore reiterates its 
demand  to  the  Commission  to  take  further  steps  towards  ensuring  that  gender 
mainstreaming becomes a reality in budgetary planning; 

Welcomes  the  feasibility  study  prepared  by  the  Commission  on  gender  budgeting, 
and calls on all partners in the European Union budgetary process to take the study 
into consideration when preparing, implementing or auditing the budget; 

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Calls on the Commission to make further efforts to develop gender-specific data that 
can be included in the budget discharge reports, since the very limited data available 
so far do not give an appropriate overview of the situation.  

Commission's response: 

The Commission has taken the requested action. 

The Roadmap for equality between women and men comes to an end in 2010. The 
Commission  will  present  a  Strategy  for  equality  between  women  and  men  (2010-
2015) in September 2010. 

The yearly EU budget mostly reflects the implementation of the programmes that 
have  already  been  decided.  To  succeed  with  gender  equality,  the  necessary 
objectives  and  requirements  must  therefore  be  incorporated  in  the  relevant  EU 
programmes.  The  right  moment  to  ensure  this  is  when  preparing  impact 
assessments of new legislative proposals. Evaluation of the programmes is another 
moment for assessing the results achieved in this field. 

The Commission's new impact assessment guidelines (2009) include guidance for 
assessing social impacts that will help reinforcing the analysis of gender issues in 
impact assessments. 

As  far  as  the  annual  budget  is  concerned,  the  Commission  has  already  taken 
appropriate  measures  ensuring  reporting  on  gender  issues,  when  available,  by 
exploiting existing tools, structures and procedures. In the context of preparing the 
draft budget (PDB 2010 and DB 2011), the DGs concerned have been instructed to 
integrate  the  gender  dimension  where  appropriate  into  the  activity  statements 
justifying  the  budget  proposal.  This  issue  has  further  been  addressed  during 
internal training. 

Also, the Commission's Interservice Group on gender equality has been informed 
about the new instructions of the budgetary circular and the members were invited 
to  raise  awareness  inside  their  DGs  on  the  possibility  to  insert  gender  aspects  in 
activity statements. 

So  far,  the  information  presented  in  the  activity  statements  takes  the  form  of 
"specific objectives" or "result indicators". Some factors might limit the progress 
in  quality  of  the  information  provided  on  gender  dimension  in  the  activity 
statements.  One  issue  to  mention  is:  "availability  of  data  disaggregated  by 
gender". This issue has also been recognised by the gender specialists as a major 
problem. Moreover, if the legal act defining the programme does not integrate any 
specific  objective  in  terms  of  gender,  it  is  more  difficult  to  follow  the 
implementation of the gender dimension. 

However,  the  Commission  notes  in  its  assessment  of  the  Roadmap  2006-2010 
presented  in  the  background  document  accompanying  the  Strategy  for  Equality 
between Women and Men 2010-2015, that the development and the dissemination 
of  EU-wide  comparable  and  reliable  gender  statistics  and  indicators  have 
contributed to better monitoring and assessment of progress in the EU. This should 
contribute to improve the reporting to the budgetary authority on the impact of EU 

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policies on gender equality. The improved gender specific data could yet again be 
useful for the budget discharge. 

This  positive  development  confirms  that  the  current  practice  in  relation  to  the 
preparation  of  the  EU  budget  which  has  been  in  place  since  2009  (budget 
procedure 2010) should be maintained. It would obviously deliver clearer results if 
the  gender  related  issues  are  also  better  integrated  in  the  next  generation  of 
programmes themselves. 

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External actions 

96. 

(European  Parliament,  §§  218-220)  -  The  European  Parliament  notes  from 
experience in 2007 and in 2008 that it is essential to ensure that transparency in this 
policy area continues to improve in terms of expenditure, particularly in view of the 
setting-up of the European External Action Service (EEAS); 

Calls  on  Commission  to  submit,  before  the  end  of  the  2008  discharge  procedure, 
concrete,  detailed  and  all-encompassing  plans  for  the  staffing,  organisational  and 
control structure of the EEAS, showing in particular the increase in and allocation of 
staff,  the  envisaged  budgetary  implications  and  changes  to  the  Statute  and  the 
Financial Regulation, and to enter immediately into negotiations with the budgetary 
authority on the basis of the proposals submitted; rejects negotiations based on vague 
framework agreements; 

Is  strongly  of  the  view  that  Parliament's  right  of  scrutiny  as  discharge  authority 
should in no way diminish with the setting-up of the EEAS; expects the Commission 
to bear this in mind when proposing the review of the current Financial Regulation; 
stresses that this latter revision should be part of the normal triennial revision; rejects 
the idea of a fast-track procedure as envisaged by the Commission.  

Commission's response: 

See Article 1 of the Proposal for a Regulation of the Parliament and the Council 
amending  Council  Regulation  (EC,  Euratom)  No  1605/2002  on  the  Financial 
Regulation applicable to the EU budget, as regards the European external action 
service (COM (2010) 85 final). In budgetary terms, the EEAS will be treated as an 
institution in the sense of Article 1 of the Financial Regulation so that it will have 
budgetary  autonomy,  i.e.  its  own  section  in  the  EU  budget.  It  will  implement  its 
own  administrative  expenditure  (like  all  other  institutions)  and  will  therefore 
receive discharge from the European Parliament for it. The European Parliament 
will therefore exercise its full budgetary and control powers towards the EEAS. 

97. 

(European  Parliament,  §§  221-222)  -  Notes  with  great  concern  that  the  Court's 
overall  assessment  that  the  supervisory  and  control  systems  of  all  DGs  concerned 
(AIDCO,  RELEX,  ELARG  and  ECHO)  are  still  only  partially  effective,  as  well  as 
the Court's conclusion that payments in this policy group were affected by material 
error; points out that, as previously, errors are to be found mainly at delegation and 
beneficiary level; 

Welcomes  DG  AIDCO's  improvements  in  its  supervisory  and  control  systems; 
however, encourages EuropeAid to make the necessary improvements to its ex-ante 
checks,  to  have  recourse  to  external  audits  and  to  remedy  the  inconsistencies  and 
shortcomings in its Annual Audit Plan, in the CRIS audit module and in the overall 
monitoring of audit results.  

Commission's response: 

EuropeAid will continue to improve its supervisory and control systems with regard 
to the EP requests and the Court recommendations, including improvements in its 

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audit  strategy.  EuropeAid  has  already  implemented  significant  improvements  to 
the  audit  methodology  and  IT  tools  (CRIS)  and  welcomes  the  recognition  of  the 
Court  of  Auditors  on  the  substantial  progress  made  in  particular  in  relation  to 
audit planning for 2010. The Commission is presently studying the implementation 
of  a  Tolerable  risk  of  error  for  external  aid  and  will  present  a  proposal  in  the 
beginning of 2011. 

DG ECHO is pleased to see that the Court recognises that DG ECHO supervisory 
and control systems are improving and will go on working on the strengthening of 
its supervisory and control systems taking into account the recommendations of the 
various control bodies (e.g. ECA, IAS). 

98. 

(European Parliament, § 223) - Urges DG RELEX to strengthen its ex-post controls 
and  to  remedy  the  weaknesses  revealed  by  the  Court  in  respect  of  its  financial 
management and supervision of projects; welcomes the recognition by DG RELEX 
of the need to pay more attention to this problem.  

Commission's response: 

The  Commission already took measures in  2009 to  address the recommendations 
of the Court of Auditors regarding ex-post controls in DG Relex and the Court has 
recognised progress made in 2009. These efforts are continuing in 2010. 

99. 

(European Parliament, § 224) - Draws attention to the substantial number of possible 
fraud  cases  (102  cases)  under  investigation  by  OLAF  in  this  policy  group  –  the 
second  highest  number,  just  behind  internal  investigations;  welcomes  the  focus  by 
OLAF  on  External  Aid,  in  investigative  and  preventive  work  and  intensified 
cooperation activities.  

Commission's response: 

The Commission welcomes the Parliament’s support for its efforts in focusing on 
external  aid  cases.  It  should  also  be  borne  in  mind  that  some  external 
investigations conducted by OLAF take place in difficult circumstances in view of 
the  remoteness  of  the  country  concerned,  the  specific  complexity  of  the  modus 
operandi,  the  level  of  security  and  the  absence  of  an  identifiable  administrative 
counterpart to OLAF. 

The Commission intends to continue its work in intensifying cooperation with the 
authorities  in  regions  which  are  major  recipients  of  EU  funds.  Following  the 
success of its 4 conferences jointly organised by EuropeAid and OLAF in Rabat, 
Cape  Town,  Kampala  and  Cairo,  it  will  now  turn  its  attention  to  Latin  America 
with the organisation of a conference in Panama in October 2010. 

100. 

(European  Parliament,  §§  225  &  227)  -  Deplores  the  delays  in  achieving 
transparency  over  EU  funds  administered  by  international  organisations  and 
especially by the UN (in "joint management"); deplores the difficulties the Court has 
had to face, despite the Commission's repeated calls for observance of the Financial 
and  Administrative  Framework  Agreement  (FAFA),  in  obtaining  audit  reports  and 
supporting documents from the UN; recognises and welcomes the progress made, in 

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particular  the  conclusion  of  an  agreement  on  terms  of  reference  for  verification 
missions in April 2009 and the signature of the joint guidelines on reporting; 

Notes the ongoing trend of increasing contributions to the multi-donor funds and in 
particular to the UN, in line with the principles of good donor cooperation; however, 
expresses its dissatisfaction concerning the persisting problems faced by the Court of 
Auditors  in  accessing  the  financial  documents  emanating  from  the  UN  agencies; 
welcomes the steps taken by the Commission to facilitate the auditing processes of 
the Court of Auditors and calls for further measures in order to fully safeguard the 
financial  interests  of  the  European  Union  and  to  increase  the  transparency  of  the 
process including, if necessary, modifications to the FAFA.  

Commission's response: 

The Commission fully supports the Court’s requests to obtain necessary supporting 
evidence  from  UN  organisations,  and  this  principle  is  clearly  stipulated  in  the 
FAFA. As soon as the Court informs it of difficulties encountered in this respect, 
the  Commission  does  its  best  to  ensure  that  its  counterparts  at  the  UN  find  a 
solution,  and  that  the  Court  receives  the  information  it  needs.  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 to 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. 

101. 

(European  Parliament,  §  226)  -  Appreciates  that  UN  organisations  often  possess 
specific  experience  and  expertise  not  readily  found  elsewhere;  none  the  less, 
expresses  concern  that  the  Commission  does  not  convincingly  demonstrate 
beforehand  whether  the  choice  of  a  UN  organisation  is  in  fact  more  efficient  and 
effective than other ways of delivering aid; calls on the Commission to implement a 
more transparent and objective process for selecting aid implementation channels  

Commission's response: 

The  UN  is  often  selected  for  reasons  such  as  its  unique  mandate,  expertise, 
capacity  or  in-country  presence  and  alternatives  may  not  always  be  available,  in 
full compliance with the Financial Regulation and the transparency. The selection 
process has been further enhanced since June 2009, when instructions were issued 
to  Delegations  and  operational  services  to  improve  the  way  decisions  to  channel 
funds through the UN are documented and to ensure that alternatives have been 
considered,  in  line  with  the  EP  requests  and  the  Court  recommendations.  The 
instructions 
that  efficiency  and  effectiveness 
to  Delegations  also  ensure 
considerations are considered when selecting a UN partner. 

DG  ECHO  provides  funding  on  a  needs-based  approach.  Each  UN  funding 
proposal  is  scrutinised  and  assessed  on  its  own  merits  on  the  basis  of  a  detailed 
logical framework and compared to other proposals. In many cases, the UN is the 
only possible means to reach the beneficiaries. 

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102. 

(European  Parliament,  §  228)  -  Stresses  in  this  context  its  deep  frustration  and 
dissatisfaction that the Commission has so far failed to act in order to create a truly 
European  instrument  for  the  implementation  of  crisis  management,  as  it  has  been 
asked to do in previous discharge resolutions; once more insists that this should be 
done  urgently,  and  calls  on  the  new  Commission  to  give  itself  the  possibility  of 
managing multi-donor trust funds itself in the forthcoming revision of the Financial 
Regulation.  

Commission's response: 

The  European  Commission,  in  the  framework  of  the  FR  triennial  revision,  has 
proposed  in  art  164  FR  that  the  European  Commission  can  set  up  and  manage 
Trust  Funds  for  external  actions,  which  would  intervene  in  emergency,  post-
emergency crisis operations or for thematic actions, fully in line with EP requests. 

103. 

(European  Parliament,  §  230)  -  Notes  the  Court's  recommendation  that  clear 
strategic objectives and measurable performance indicators should be established in 
the  strategy  programming  documents  for  the  European  Neighbourhood  and 
Partnership Instrument; considers that similar steps should also be taken in relation to 
other external instruments, which continue to be very general in scope.  

Commission's response: 

The  Commission  considers  that  this  request  was  implemented  in  the  recent  Mid 
Term review of ENPI programming documents. 

In the Mid Term review of the ENPI Strategy Papers new indicative programmes 
were prepared for the period 2011-13. In drafting the new programmes particular 
attention  was  paid,  as  recommended  by  the  Court,  to  improve  the  logical  chain 
between  General  Objectives,  Specific  Objectives,  Expected  Results  and  Possible 
Indicators of Achievement. As a result the NIPs are now better structured, clearer 
on  what  assistance  should  achieve  and  can  be  more  easily  monitored.  However 
when it comes to indicators, programming documents can only reasonably aspire 
at identifying “possible” indicators of achievement. These indicators will then need 
to  be  further  defined  and  quantified  in  the  project  identification  phase  when  a 
more  direct  correspondence  can  be  established  between  the  specific  amount  of 
resources allocated to a measure and the direct results it can achieve. 

104. 

(European  Parliament,  §  231)  -  Suggests  that  the  Commission  draw  up  a  study 
assessing the scope for making external policy budgets more flexible; considers that, 
in view of the budget surpluses which have arisen to date and the still growing needs 
in this field of policy, scope for greater flexibility should be provided for in advance, 
although not at the expense of proper budgeting and budgetary control.  

Commission's response: 

The Commission has identified the lack of flexibility in external policy budgets as 
one  of  the  issues  to  be  addressed.  The  events  of  the  last  years,  such  as  the  food 
prices  crisis  and  the  impact  of  the  economic  and  financial  crisis  have  all  shown 
that  the  lack  of  flexibility  of  the  budget  limits  the  ability  of  the  EU  to  respond 
quickly  and  comprehensively  to  major  crises,  unforeseen  needs  or  new  major 

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initiative. This issue will be taken on board in the on-going budget review and the 
preparation of the next multi-annual financial framework. 

105. 

(European Parliament, §§ 232-235, EDF §§ 6, 23-25) - Deplores the finding by the 
Court's audit that budget support commitments were affected by a high level of non-
quantifiable  errors;  insists  that  the  Commission  should  assess  these  payments  even 
more rigorously; notes with satisfaction in this context the review in February 2009 
of the financial circuits for this type of payments; 

Notes  with  satisfaction  the  improvement  in  the  clarity  and  structure  of  the 
Commission’s  assessments  of  compliance  with  the  requirements  of  the  DCI 
Agreement  (Financing  instrument  for  development cooperation);  however, deplores 
the  fact  that  the  Court  has  found  frequent  cases  in  which  the  Commission  did  not 
demonstrate in a structured and formalised manner that public finance management 
was sufficiently transparent, accountable and effective, or, at least, that a credible and 
relevant reform programme was in place; 

Agrees  with  the  Court  that  the  Commission  should  pursue  its  efforts  to  support  its 
decisions on the eligibility of budget support and to ensure that all future financing 
agreements  provide  a  comprehensive  and  clear  basis  for  the  assessment  of 
compliance with payment conditions; looks forward to receiving information on the 
outcome of the guidance review promised by the Commission for the end of 2009; 

Calls  on  the  Commission,  as  regards  budget  support,  to  bolster  supervisory  and 
control  systems  for  ensuring  the  regularity  of  payments,  to  monitor  more  closely 
organisations  implementing  EU-funded  projects,  to  carry  out  more  effective  audits, 
with  rigorous  follow-up,  and  to  develop  more  results-oriented  budget  support 
guidelines.  

Commission's response: 

The  Commission  continues  to  focus  on  improving  the  clarity  of  its  Financing 
Agreements  in  order  to  provide  a  clearer  basis  for  assessing  budget  support 
eligibility.  The  Court  already  noted  significant  improvements  in  this  respect  for 
Financing Agreements. The Commission is seeking to further underpin the clarity 
of  the  assessment  budget  support  eligibility  by  developing  a  more  structured 
framework  to  be  used  in  identifying  objectives  and  tracking  progress  in  Public 
Financial Management reform. Further to what stated before, the Commission is 
revising its Guidelines on Budgetary Support that are scheduled to be finalised by 
the end of 2010, and that take into account issues raised by stakeholders, including 
the  Court  and  the  European  Parliament.  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  budget 
support operations are under the same supervisory and control system as any other 
project, which includes audits. 

106. 

(European  Parliament,  §  236,  EDF  §  26)  -  Urges  the  Commission  to  help  partner 
countries develop parliamentary control and audit capacities, in particular when aid 
is  provided  via  budget  support,  and  invites  the  Commission  to  report  regularly  on 
progress achieved.  

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Commission's response: 

In  line  with  its  policy  to  foster  Country  Ownership,  the  Commission  encourages 
and  supports  efforts  of  partner  countries  to  develop  parliamentary  control  and 
audit capacities. Thus, the Commission has been and is supporting many capacity 
building initiatives in this area and will report on this within its annual reports on 
external assistance. A study on the support to parliaments in external development 
and  cooperation  programmes  is  currently  being  finalized  and  includes  an 
assessment of EC support to Parliaments in the ACP region (covering 2000-2009) 
with  a  related  database  of  projects,  as  well  as  a  practical  guide  to  parliamentary 
support  for  EU  Delegation  and  HQ  staff  and  a  training  module  piloted  in 
September  2010  in  collaboration  with  the  EP's  Office  for  Promotion  of 
Parliamentary  Democracy  (OPPD).  The  different  results  of  the  study  are  to  be 
made  public  before  the  end  of  2010.  The  Commission  has  in  the  meanwhile 
already  shared  preliminary  results  of  the  study  with  the  EP  and  in  particular  its 
OPPD.  The  Commission  will  continue  to  report  on  its  work  in  this  field  on  a 
regular basis. 

107. 

(European  Parliament,  §  237,  EDF  §§  27-28)  -  Points  out  that  its  role  as  regards 
budget  support  is  to  hold  the  Commission  accountable  for  the  results  of  spending, 
and  that  budget  support  is  an  aid  instrument  which  requires  a  paradigm  shift  in 
oversight  behaviour,  moving  from  control  over  inputs  to  the  checking  of  results 
against indicators; 

issues 

in  budgetary  support 

Repeats  its  request  to  the  Commission  to  identify,  with  the  utmost  rigour,  the 
countries  or 
implementation  where  particular 
parliamentary  attention  could  prove  useful  in  improving  donor  accountability  in 
addition  to  the  special  guidance  on  how  to  manage  budget  support  operations  in 
countries  in  a  situation  of  fragility  promised  in  the  Commission’s  replies  of  2 
December  2009  to  the  Committee  on  Budgetary  Control’s  written  questions  to 
Commissioner Karel De Gucht.  

Commission's response: 

New guidelines on budget support in fragile states have been made available since 
February  2010.  One  of  the  principles  of  budget  support  is  the  alignment  to 
national systems. This implies the role of national parliaments in partner countries 
to oversee the national budgetary process including external donor budget support 
implementation  (and/or  other  external  donor  interventions).  Therefore,  budget 
support  implementation,  particular  parliamentary  attention,  proves  useful  in 
improving  donor  accountability.  The  strengthening  of  the  role  of  partner 
parliaments and supreme audit institutions (SAIs) in the oversight of the national 
budgetary process is systematically encouraged by the Commission, in particular in 
fragile states, and is part of the policy dialogue with the partner countries. On the 
basis  of  country  requests  the  Commission  is  in  fact  supporting  Parliaments  and 
SAIs in many budget support receiving countries within budget support operations 
and  also  under  separate  support  programmes.  In  this  context  there  is  a  leading 
partner 
the  INTOSAI  (International  Organisation  of  Supreme  Audit 
Institutions)/Donor  initiative  to  strengthen  SAIs  and  the  Commission  has  also 

in 

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developed  Guidelines  for  the  working  with  Parliaments  that  will  be  publicly 
available in the third quarter of 2010. 

108. 

(European  Parliament,  §§  238-239,  EDF  §§  31-32)  -  Reiterates  its  request  that 
development aid in general and budget support in particular should be progressively 
linked  to  an  ex-ante  country  disclosure  statement,  issued  by  the  recipient  country's 
government and signed by its finance minister, concerning selected issues that affect 
the governance and accountability structure of a beneficiary country; 

Invites  the  new  Commission  to  take  the  lead  and  to  present  this  proposal  to  other 
international donors – in particular the World Bank – with a view to developing and 
implementing  such  an  instrument  in  agreement  with  other  donors;  waits  to  be 
informed by the Commission about a possible timeframe for such negotiations.  

Commission's response: 

The  Commission  does  not  consider  that  a  Country  Disclosure  Statement  would 
provide  significant  added  value  to  the  existing  wide  range  of  governance  and 
accountability  assessments  that  are  currently  available  and  routinely  used.  The 
Commission notes that the Council also declined to adopt such an approach when 
this was suggested in the context of the Structural Funds. It would be difficult to 
persuade partners to adopt an approach that has been considered inappropriate for 
EU Member States. Besides it could be said that such a Disclosure Statement may 
become  legally  contradictory  with  the  normal  legal  framework  of  Budget 
accountability,  role  of  Legislative  powers  (Parliaments)  and  Supreme  Audit 
Institutions in providing discharge and audit of public accounts. 

109. 

(European Parliament, § 240) - Urges the Commission to define strategic objectives 
and adequate performance indicators that would allow an efficient impact assessment 
of EU actions.  

Commission's response: 

The  Commission  is  defining  strategic  objectives  through  increased  emphasis  on 
the performance framework owned by partner countries. Having tested predefined 
indicators to undertake general impact assessments, the Commission arrived at the 
conclusion  that  this  is  not  implementable.  (In  late  2006,  DG  AIDCO  launched  a 
pilot initiative to test a method based on a list of Aggregated Standard Indicators 
(ASI)  in  order  to  synthesize,  in  a  quantitative  way,  the  results  of  development 
programs in terms of output and outcome and increase the visibility of programs 
financed  by  the  Commission.  After  one  year  of  test  phase,  on  the  basis  of  the 
assessment of 145 projects worth of € 2.8 billions, it appears that the exercise of the 
ASI  is  not  conclusive  and  does  not  lead  to  the  expected  effects  in  terms  of  better 
visibility  of  results.  The  difficulties  were  due  to  the  complexity  of  the  ASI  system 
which  does  not  integrate  itself,  or  hardly,  into  the  national  monitoring  and 
evaluation system of the partner country leading to a lack of appropriate statistics 
for  calculating  ASI).  In  order  to  improve  guidance  and  policy  achievements  the 
Commission  does  intend  to  strengthen  the  dialogue  with  partner  countries  on 
results  and  impacts  and  establish  a  relevant  performance  assessment  framework 
for the reforms initiated by partner countries. This framework will be matched to 
the  particularities  and  specific  objectives  of  each  partner  country.  This  dialogue 

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will enable the Commission to better discuss the performance and results for each 
country using the methodology described in the new guide 'Policy Steering – The 
Role and Use of Performance Measurement Indicators.' 

The launch of the guide in the second half of 2010 will be accompanied by a series 
of  training  initiatives  using  case  studies.  The  output  from  this  work  will  be  a 
strengthened performance framework owned by the partner country and usable for 
the Commission's own assessment of individual EU actions. 

110. 

(European Parliament, § 241, EDF § 40) - Invites the Commission to place greater 
emphasis on women's health in developing countries in general, and improvements in 
maternal health in particular, as this is the area in which the MDG targets are furthest 
from being met.  

Commission's response: 

The  Commission  has  reinforced  its  commitment  to  maternal  and  child  health 
through reaffirming its support to gender equality, the rights and the health of the 
child and the rights and the health of women and girls in the various international 
fora. The contribution of the EU to maternal and child health is first and foremost 
through general budget, sector budget and programme support at country level for 
health systems strengthening and universal access to basic health care, including 
universal access to reproductive health. 

It is also important to recognize the impact of the Global fund to fight AIDS, TB 
and malaria (GFATM), and of the Global Alliance for Vaccines and Immunisation 
(GAVI)  on  maternal  and  child  health.  The  European  Commission  is  a  founding 
member and one of the main contributors to the GFATM, and active supporter of 
GAVI,  supporting  their  move  towards  more  aligned  and  harmonized  support  to 
countries, including through Health system strengthening activities. 

The  Commission  has  been  very  active  to  help  ensure  that  the  G8  Flagship 
Initiative on Maternal Health is fully in line with the implementation of the ICPD 
Programme of Action and the MDG targets. The Communication on a twelve-point 
EU  action  plan  in  support  of  the  MDGs  includes  the  re-allocation  of  funding  to 
countries most off-track. 

111. 

(European  Parliament,  §§  242-243)  -  Welcomes  progress  as  regards  division  of 
labour between donors, as well as other aid effectiveness principles; feels, however, 
that the Commission should step up its efforts to coordinate Member States' activities 
in this respect; 

Stresses  the  need  to  increase  aid  effectiveness  and  to  reduce  aid  fragmentation; 
considers  that  the  great  number  of  projects  managed  by  the  Commission  and 
Member  States  (some  40  000  projects)  should  be  reduced  by  giving  the  priority  to 
more effective programmes and better coordination with EU donors through a clear 
focus  on  a  more  limited  number  of  priority  intervention  areas  for  each  beneficiary 
country, whilst not excluding small but effective NGOs working in the field.  

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Commission's response: 

Some progress has been made in the field of Division of Labour, especially in the 
countries  where  the  so-called  EU-Fast  Track  Initiative  on  Complementarity  and 
Division  of  Labour  is  being  implemented.  The  Commission  has  stepped  up 
significantly  its  coordinating  efforts,  but  is  in  many  cases  held  back  by  the 
reluctance of Member States to participate fully, especially when it comes to sector 
concentration. Two issues will have to be looked at more closely in the future, the 
first  being  coordinating  the  entrance  of  new  Member  States  in  partner  countries 
and  sectors,  the  second  being  monitoring  Member  States  living  up  to  the 
agreements made in Council. 

In partner countries where the national government has showed a higher level of 
ownership  and  assumed  a  prominent  role  in  leading  the  (sector)  dialogue  with 
donors, more progress has been made. 

112. 

(European Parliament, § 244) - Notes that 63 % of funds committed so far under the 
'Food Facility' have been channelled through international organisations, and recalls 
that  Regulation(EC)  No  1337/2008  stipulates  that,  as  regards  implementation,  the 
Commission  is  obliged  to  maintain  an  "appropriate  balance"  between  international 
organisations and "other eligible entities";  

Commission's response: 

The  "Food  Facility"  balance  was  carefully  justified  and  approved  by  the 
Regulation Committee and by the Parliament when they examined the overall plan 
of the food facility. 

113. 

(European  Parliament,  §  245)  -  Calls  once  again  for  greater  involvement  of 
parliaments  and  consultation  of  civil  society  in  partner  countries  when  drawing  up 
and reviewing DCI Country Strategy Papers.  

Commission's response: 

The  Commission  agrees  with  the  principle  that  parliament  and  civil  society 
organizations  must  be  better  involved  in  the  elaboration  and  revision  of  CSPs. 
However,  the  level  of  involvement  differs  according  to  the  various  legal  bases 
considered. 

In the framework of the Cotonou Agreement, the need for consultations is agreed 
and  legally  binding  both  for  the  Commission  and  Partner  States.  For  DCI 
countries,  the  Commission  applies  an  EU  regulation:  EU  efforts  to  consult 
effectively civil society organizations should be accompanied by the willingness of 
national authorities to do so. 

In the majority of DCI countries, EU Delegations are consulting parliaments and 
civil society, taking into consideration the specific (and sometimes rather difficult) 
context in which they are operating. This implies different degrees of involvement. 

114. 

(European Parliament, § 246, EDF § 40) - Urges the Commission to ensure better 
visibility for EU-funded activities overseas.  

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Commission's response: 

The requested action has been implemented. A new communication and visibility 
manual has been adopted (covering also UN agencies since 2008 and World Bank 
since  2009).  This  promotes  mainstreaming  of  communication  and  visibility 
activities in the project cycle resulting in visibility at project level. Efforts continue 
to  ensure  compliance  and  to  monitor  quality  of  the  communication  activities 
implemented. 

115. 

(European  Parliament,  §§  247-248)  -  As  regards  Non-governmental  organisations 
(NGOs),  notes  the  written  comments  from  Commissioners  Maroš  Šefčovič  and 
Algirdas Šemeta dated 8 March 2010 including detailed information about financing 
of NGO-type organisations by the Commission and the Executive Agencies; 

Invites the Commission to establish a public register of NGO-type bodies funded by 
Commission  services,  to  harmonise  its  various  databases  on  beneficiaries  receiving 
funds  from  the  EU  budget  or  the  European  Development  Fund,  to  indicate  in  its 
accounting  system  the  'not-for-profit"  nature  of  the  beneficiary  entities  and  to  look 
into the possibility of expanding the register of interest representatives by including 
information about their funding received from the EU.  

Commission's response: 

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. 

In  the  second  phase,  reconciliation  procedures  between  the  centrally  managed 
legal entity data base and the Register of Interest Representatives -the latter being 
based  on  voluntary  self-registration-  will  be  set  up  by  mid-2011.  In  addition,  the 
feasibility  will  be  assessed  to  broaden  the  scope  to  legal  entities  in  non-Member 
States as from 2012. 

116. 

(European Parliament, § 249) - The European Parliament remains concerned about 
the fundamental weaknesses concerning potential irregularities in the management of 
Phare funds by two implementing agencies in Bulgaria, even though the contracting 
for Phare funds has been terminated; notes the commitment on the part of the current 
authorities  to  investigate  the  irregularities  and  to  reform  the  management  of  EU 
funding.  

Commission's response: 

During 2009 and following corrective actions from the Bulgarian authorities, DG 
the 
ELARG 
implementation of the post-accession funds in Bulgaria will continue to receive the 
special attention needed until all programmes are closed. 

the  suspension  of  payments 

to  Bulgaria.  However, 

lifted 

117. 

(European Parliament, § 250) - Notes that decommissioning work at the Kozloduy 
nuclear  power  station  (Kozloduy  blocks  1  to  4)  is  to  be  completed  by  19  October 

EN 

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118. 

2035;  notes  a  lack  of  transparency  in  the  origin  of  the  funds  from  various 
Directorates-General at the Commission; requests the Court of Auditors to scrutinise 
the funds used there.  

Commission's response: 

In the context of the Community financial support for the Kozloduy Programme, 
the decommissioning funds are only implemented by DG ENER. This is done in a 
clear  and  transparent  way  based  on  dedicated  procedures  and  through  joint 
management with the EBRD. 

(European  Parliament,  §  251)  -  Deplores  the  absence  of  substantial  progress  in 
addressing  the  weaknesses  identified  (in  particular  in  relation  to  the  National  Road 
Infrastructure Fund); consequently, supports the Commission’s prudent approach and 
its undertaking to closely monitor the situation, to follow up on the findings and to 
provide advice and assistance to the Bulgarian authorities with a view to addressing 
the weaknesses identified; urges the Commission to apply the utmost vigilance and 
rigour  when  approving  the  compliance  assessment  reports  submitted  for  the 
operational programmes proposed by the Bulgarian authorities and before starting to 
disburse the intermediate payments in respect of the 2007-2013 programming period; 
notes  the  steps  taken  by  Bulgaria;  welcomes  the  positive  outcome  of  the 
Commission’s  compliance  assessment  procedures  for  all  operational  programmes, 
whilst stressing that effective control and guidance from the Commission should be 
further applied.  

Commission's response: 

The  requested  action  has  been  taken.  The  Commission  has  examined  rigorously 
the system descriptions and compliance assessment reports for Bulgaria, in order 
to  make  sure,  before  interim  payments  begin  to  flow,  that  effective  management 
and  control  systems  have  been  set  up  to  manage  the  funds.  The  programmes  for 
the  2007-2013  period  contain  a  significant  technical  assistance  component  to 
increase administrative capacity. The Commission will continue to use throughout 
the period all the means at its disposal provided by the regulations to ensure proper 
management of these funds. 

In  the  context  of  the  2007-2013  programming  period,  where  the  National  Road 
Infrastructure Agency (NRIA) is a beneficiary under two Operational Programmes 
(Transport  and  Regional  Development),  the  Commission  paid  close  attention 
during the compliance assessment review to the arrangements in place for effective 
management  verifications  by  the  respective  Managing  Authorities  to  ensure  the 
legality  and  regularity  of  expenditure,  in  particular  where  the  NRIA  is  a 
beneficiary.  It  will  continue  closely  monitoring  the  implementation  of  the 
programmes 
the  period.  The  compliance  assessment  for  all 
ERDF/Cohesion  Fund  Operational  Programmes  have  been  approved  by  DG 
REGIO.  In  response  to  a  series  of  'disclaimers  of  opinion'  contained  in  Annual 
Control  Reports  submitted  by  Bulgaria's  Audit  Authorities  (AA),  however,  the 
Commission  has  sent  a  letter  to  the  Bulgarian  AA  requesting  additional 
information  and  the  opinion  from  the  Audit  Authority  on  the  Operational 
the  Operational 
Programme  Environment 

(ERDF/Cohesion  Fund).  For 

throughout 

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Programmes  Competitiveness,  Regional  Development,  Transport  and  Technical 
Assistance, interim payments can now be made. 

119. 

(European  Parliament,  §§  254-255)  -  Regrets  the  weaknesses,  in  particular  the 
failure  to  identify  irregular  support  applications  and  adequately  to  follow  up  the 
irregularities, and urges Bulgaria to adopt a detailed action plan in close cooperation 
with the Commission and under close supervision by an independent auditor; 

Stresses  that  this  action  plan  must  attain  specific,  measurable,  achievable,  relevant 
and  timed  targets,  in  particular,  where  relevant,  the  creation  of  transparent 
procurement rules which meet international standards and do not restrict competition 
from  international  bidders  by  imposing  huge  internal  administrative  burdens  on 
them;  further  considers  that  these  targets  must  focus  on  the  establishment  and 
maintenance of fully operational judicial and administrative structures.  

Commission's response: 

The Commission has taken the requested action. 

In  2008,  the  Bulgarian  authorities  set  up  a  SAPARD  action  plan  to  cover  the 
weaknesses  referred  to  in  this  request.  Its  implementation  has  been  closely 
followed  up  by  the  Commission  services  and  OLAF  which  requested  Bulgaria  to 
take  corrective  measures  to  address  the  control  deficiencies  and  to  provide  an 
updated  and  complete  version  of  its  debtors'  ledger.  Based  on  the  information 
received from the Bulgarian NAO and the independent audit authority and taking 
account  of  the  latest  version  of  the  debtors'  ledger  submitted  by  the  Bulgarian 
authorities,  it  was  concluded  that  the  action  plan  has  been  implemented  and  the 
reimbursement of the expenditure has been restarted on 9 September 2009. 

A conformity audit mission has been carried out in Bulgaria by DG AGRI services 
in  December  2009  in  order  to  assess  the  implementation  of  the  SAPARD  action 
plan and the continued correct application in practice of the amended procedures 
and reinforced controls, also for recently paid projects. In this context, particular 
issues such as related parties, pricing at arms length and the reliability of the price 
the 
data  base  were  checked.  The  Commission  auditors  concluded 
management, control and sanction system has improved in comparison to the past 
and that the action plan has been implemented. However, recommendations were 
given  and  additional documents  were requested.  These  outstanding issues will be 
managed  with  the  Bulgarian  authorities  in  the  framework  of  the  conformity 
clearance procedure. 

that 

120. 

(European  Parliament,  §§  256-257)  -  Welcomes  the  updated  information  from  the 
Commission on the status of implementation of EU funds in Bulgaria and Romania; 
however,  notes  the  continuous  existence  of  inconsistencies  and  irregularities  in  the 
progress  reports  submitted;  finds  its  efforts  to  evaluate  progress  in  the  judicial  and 
administrative  system  frustrated  by  the  existing  designs  of  the  progress  reports; 
requests  the  Commission  to  continue  to  closely  monitor  those  Member  States’ 
systems and the implementation of the agreed action plans, and suggests that OLAF 
also should maintain the support given by it to those Member States in fulfilling their 
obligations concerning the protection of the financial interests of the Union; 

EN 

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121. 

Demands that the reports give clear indications as to progress in the key areas of the 
fight against fraud and corruption; recalls its demand for a traffic-light system (red, 
amber  and  green),  based  on  specific  indicators  (quantity  and  quality  of  legal  and 
administrative measures taken to prevent, deter and punish fraud and corruption), so 
as to give  a  clear picture of the evolution of existing systems in those countries; is 
astonished  that  OLAF  was  not  always  consulted  in  the  compilation  of  the  reports; 
asks  the  Commission  to  include  OLAF’s  comments  in  the  upcoming  progress 
reports.  

Commission's response: 

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. On 23 March 2010, the Commission 
adopted interim reports, the latest set of reports was adopted on 20 July 2010. In 
these  last  reports,  the  Commission  provides  a  detailed  assessment  on  progress  in 
both Member States and also refers to the situation regarding public procurement. 
OLAF is consulted on an informal basis on operational matters under its area of 
responsibility in relation to the 2 Member States. The reports can be found at the 
following website: 

http://ec.europa.eu/dgs/secretariat_general/cvm/progress_reports_en.htm" 

(European  Parliament,  §§  258  &  262)  -  The  European  Parliament  notes  the  steps 
taken  by  the  Commission  to  improve  the  overall  performance  of  pre-accession 
assistance in Croatia in close cooperation with the national authorities and to closely 
monitor the conditions for the full decentralisation of IPA funds; stresses that lessons 
learned  from  problems  concerning  the  implementation  of  pre-accession  funds  in 
Bulgaria and Romania should help the Croatian authorities, with the Commission’s 
assistance, to avoid similar difficulties when implementing the pre-accession funds in 
respect  of  their  country;  deplores  the  fact  that  the  Commission  failed  to  act  on 
Parliament’s  request  for  a  traffic-light  system  (green,  amber  and  red)  to  be 
introduced  into  the  progress  reports,  showing  developments  in  areas  of  high 
importance for the fight against fraud such as the establishment and maintenance of 
stable and efficient structures for the judiciary and the administration; 

Recalls that the 2009 progress report for Croatia shows deficiencies in the fields of 
the  judiciary  due  to  shortcomings  in  the  transparency  and  application  of  uniform, 
objective  criteria  in  the  selection  of  judges  and  prosecutors;  doubts,  therefore,  that 
the funds spent on Chapter 23 were spent efficiently and effectively.  

Commission's response: 

The Commission is closely monitoring the conditions for the full decentralisation 
of  IPA  funds.  Croatia  took  a  number  of  important  steps  to  address  weaknesses 
identified  by  the  Commission  in  the  decentralised  management  of  pre-accession 
aid.  These  steps  led  to  the  conferral  on  Croatia  of  decentralised  management 
powers (with ex ante controls by the EU Delegation). Croatia needed to ensure that 
the conditions set out in the aforementioned Commission Decisions on conferral of 
management  powers  were  met.  Findings  of  follow-up  audits  which  were  carried 
out are being thoroughly addressed. 

EN 

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The main challenge for Croatia in the horizon of 2011 will be to obtain from the 
Commission  the  waiver  of  ex-ante  controls.  The  National  Authorising  Officer  in 
Croatia submitted roadmaps to waive ex ante controls by the EU Delegation. These 
roadmaps  provide  a  framework  for  the  monitoring  and  assessment  of  progress 
towards  waiving  ex  ante  controls  including  an  improvement  of  the  pace  and 
quality  of  contracting.  Particularly  in  the  second  quarter  of  2010,  a  significant 
reduction  in  rejections  of  files  submitted  for  ex-ante  approval  by  the  Delegation 
has been achieved. The sustainability of this trend will have to be confirmed over a 
longer period. 

Identified  deficiencies  in  Croatia's  appointment  procedures  for  judges  and 
prosecutors will be improved by application of benchmarking procedures and new 
legislation  which  was  adopted  in  December  2009.  Furthermore  EU  financial 
assistance is also linked to Croatia's reform efforts in this area. 

The  process  of  the  overall  reform  of  the  judicial  system  in  line  with  the  key 
Accession Partnership requirements is still underway and significant progress has 
already been achieved. The Commission will closely monitor the process and will 
use all available instruments, including the joint bodies under the Stabilisation and 
Association Agreements, to identify and tackle possible shortcomings. 

The  Commission  already  extensively  reports  on  a  yearly  basis  (Enlargement 
Package) on the state of progress of candidate countries, including in developing 
their  judicial  systems  and  public  administrations  and  in  fighting  corruption.  The 
Commission believes that it would not be appropriate to establish a "traffic light" 
system  in  the  Progress  Reports  as  this  could  be  assimilated  or  confused  with  a 
political  "judgement"  regarding  the  accession  of  candidate  countries  and  its 
timeline. 

Formal accession negotiations already contain extensive benchmarks, including in 
Chapter 23 (Judiciary and fundamental rights) and Chapter 24 (Justice, freedom 
and  security)  which  have  to  be  met  at  various  stages  in  the  enlargement  process 
before accession negotiations can be successfully concluded.  

122. 

(European Parliament, § 259) - Is disappointed by the fact that key weaknesses (lack 
of  programming  readiness  and  uneven  performance  across  sectors),  which  have 
resulted  in  a  ‘moderately  unsatisfactory’  overall  performance  as  regards  pre-
accession assistance in Turkey, continue to prevail.  

Commission's response: 

A number of improvements in the management of pre-accession are already under 
implementation to increase the effectiveness of financial assistance: 

1.  The  Commission  will  complement  the  current  programming  practice  with  a 
more  sectoral  approach  where  appropriate,  with  sector  strategies  aiming  at  both 
improved ownership and impact. 

2. The Commission is taking steps to follow up the recommendations of last year’s 
IPA  conference  and  the  December  Council  conclusions  on  IPA  to  better  link 
financial assistance to political priorities. 

EN 

82 

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3.  The  Commission  will  ensure  that  future  projects  have  clearer  objectives  that 
result  in  an  improved  intervention  logic  through  relevant  and  measurable 
indicators and benchmarks. 

4. Where necessary, clearly defined conditionalities will be used to ensure that the 
Turkish  beneficiaries  implement  commitments  necessary  for  financial  assistance 
to achieve results and impacts. 

5.  Together  with  the  Turkish  authorities,  monitoring  systems  will  be  further 
improved  to  increase  the  focus  on  results  and  impact  of  projects  under 
implementation. 

6.  Further  action  will  be  taken  to  address  outstanding  recommendations  from 
audits and evaluations to strengthen the management and control systems for DIS 
(decentralised implementation). 

7.  Audits,  evaluations  and  close  monitoring  will  ensure  that  improvements  are 
effective and further adjustments are brought under way to the system if necessary. 

123. 

(European Parliament, § 260-261) - Notes the steps taken by the Commission in the 
candidate  countries  and  other  countries  in  the  Western  Balkans  to  fight  corruption, 
and encourages the implementation of projects strengthening the independence of the 
judiciary, the development of professional law enforcement and support for the fight 
against  corruption,  within  the  framework  of  the  regional  and  national  assistance; 
recalls  that  under  the  Thessaloniki  Agenda  for  the  Western  Balkans  the  EU 
undertook  to  work  closely  with  the  western  Balkan  countries  to  further  consolidate 
peace and to promote stability, democracy, the rule of law and respect for human and 
minority rights; stresses that this also applies to the fight against organised crime and 
corruption as well as to the enhancement of regional cooperation; 

Recalls  that  the  Court  of  Auditors  found  no  clear  Commission  methodology  by 
which  the  Commission  measures  progress  in  those  areas;  in  particular,  asks  the 
Commission’s  Secretariat-General  to  provide  Parliament  with  a  report  on  the 
implementation  of  the  Thessaloniki  Agenda  which  could  serve  as  the  basis  for  an 
external  evaluation  of  its  progress;  calls  on  the  Commission  to  establish  a  clear 
connection  between  the  payment  of  pre-accession  funds  and  evidenced  and  visible 
achievements in the fields of the Thessaloniki Agenda.  

Commission's response: 

Progress  in  the  areas  under  the  Thessaloniki  Agenda  is  measured  through  the 
mechanisms  used  to  assess  the  Western  Balkan  countries'  progress  towards 
integration to the EU. The Western Balkan countries are committed to a process of 
integration to the EU with an eventual accession as member state. To this end they 
are striving to meet the Copenhagen criteria which cover most of the areas under 
the  Thessaloniki  agenda:  1)  the  stability  of  institutions  guaranteeing  democracy, 
the rule of law, human rights and respect for and protection of minorities; 2) the 
existence  of  a  functioning  market  economy  and  the  capacity  to  cope  with 
competitive pressure and market forces within the Union; 3) the ability to take on 
the  obligations  of  membership,  including  adherence  to  the  aims  of  political, 

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economic and monetary union and the administrative capacity to effectively apply 
and implement the acquis. 

Their  progress  is  measured  by  the  Commission  through  the  yearly  enlargement 
package  which  includes  a  Strategy  Paper  and  progress  reports,  which  assess 
reforms undertaken by the Western Balkan countries in the above areas over the 
past twelve months, including the key priorities of the Thessaloniki Agenda such as 
the fight against organized crime and corruption, as well as initiatives to promote 
regional  cooperation.  In  certain  years,  the  enlargement  package  also  includes 
proposals  to  the  Council  of  Ministers  for  revised  European  and  Accession 
partnerships  for  each  country,  in  which  the  Commission  lists  priority  areas  for 
further reform. The upcoming enlargement package will be adopted in November 
2010  and  will  include  a  Communication  from  the  Commission  to  the  European 
Parliament and the Council. The Commission considers that the existing reporting 
is  adequate  and  sees  no  need  for  a  complementary  report  to  be  issued  by  the 
Commission's Secretariat General on the same subject. 

Furthermore,  on  5  March  2008  the  Commission  issued  a  Communication  to  the 
European Parliament and the Council entitled: "Western Balkans: Enhancing the 
European  Perspective".  Following  up  on  the  Thessaloniki  Agenda  and  the 
Salzburg Communication, the Communication reiterated the EU's commitment to 
the European perspective of the Western Balkans and pointed the way forward for 
an enhanced progress of the region towards the EU. It set out new initiatives for 
promoting people-to-people contacts, covering areas such as visa liberalisation and 
scholarships, for developing civil society and for enhancing the region's economic 
and social development. The Communication also provided a succinct analysis of 
the  situation  of  each  partner  in  the  light  of  recent  developments  and  the  main 
regionally relevant EU activities in the Western Balkans. On 3 February 2009 the 
Commission issued a Staff Working Paper on "EU regionally relevant activities in 
the Western Balkans 2008/2009". This Staff Working Paper outlines EU activities 
of regional relevance to the Western Balkan countries and corresponding regional 
activities related to the European agenda of the Western Balkans. It is an update of 
the  Annex  to  the  March  2008  Commission  Communication  on  the  Western 
Balkans.  

As regional cooperation is a priority of the Thessaloniki Agenda, the Commission 
has taken a number of measures to enhance regional cooperation. Between 2007 
and  2010  around  €430  million  has  been  allocated  to  projects  supporting  either 
regional cooperation or activities addressing common needs in the region. 

124. 

(European  Parliament,  §  263)  -  Notes  that  the  Regional  Cooperation  Council  has 
been active for more than a year; asks the Commission to provide information with a 
view  to  strengthening  regional  cooperation  under  the  decentralised  implementation 
system and to present to the budget authority its strategic considerations in that area.  

Commission's response: 

The  Regional  Cooperation  Council  (RCC)  is  a  regionally-owned  cooperation 
structure  located  in  Sarajevo  and  co-financed  by  the  countries  of  the  region,  the 
European Commission and other interested donors. The RCC took over from the 
Stability Pact in 2008 and after three years it is a well established and functioning 

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organisation.  The  work  of  the  RCC  focuses  on  six  priority  areas:  economic  and 
social  development,  energy  and  infrastructure,  justice  and  home  affairs,  security 
cooperation,  building  human  capital,  and  parliamentary  cooperation  as  an 
overarching theme. 

In  line  with  the  Enlargement  Strategy,  the  EU  will  continue  to  support  local 
ownership  of  initiatives  in  regional  cooperation.  The  RCC  being  the  key 
interlocutor  for  regional  cooperation  becomes  then  a  fundamental  actor  for 
supporting  and  implementing  a  number  of  thematic  or  sector  specific  regional 
initiatives originally launched under the Stability Pact which have been identified 
as  priorities  and  confirmed  by  the  RCC  Board  through  the  approval  of  the  RCC 
Strategy Paper (2011-13) on 23 June 2010. 

The Commission is preparing a number of actions in the area of cultural heritage 
and economic development which count with the strong regional leadership of the 
RCC.  It  is  also  the  intention  of  the  Commission  to  provide  complementary 
technical assistance in order to enhance its role for identification and formulation 
of regional priorities and for the follow up and prioritising of the several existing 
regional initiatives. 

125. 

(European Parliament, § 264-265) - Recalls the need for the candidate countries to 
ensure effective implementation of new and reformed legal provisions by means of 
an  ambitious,  transparent,  accountable,  effective  and  efficient  public  service;  notes 
with concern that – notwithstanding different developments in both countries – both 
in Croatia and in the former Yugoslav Republic of Macedonia (FYROM) corruption 
is  still  widespread  and  constitutes  a  very  serious  problem;  deplores  the  fact  that  in 
cases  of  high-level  corruption  only  limited  investigation  was  carried  out  and  that, 
overall,  only a  small number of  investigations led to criminal charges; stresses that 
this indicates serious shortcomings in the judicial system; 

Asks the Commission to continuously monitor and report to the budgetary authority 
on the backlog and number of new criminal charges and verdicts and the backlog and 
number  of  new  court  cases  brought  on  charges  of  infringement  of  public 
procurement laws in Croatia and in FYROM.  

Commission's response: 

As  regards  Croatia,  the  Commission  continues  to  promote  an  appreciation  and 
acceptance  of  the  need  for  an  ambitious,  transparent,  accountable,  effective  and 
efficient public service, e.g. at the Stabilisation and Association Council in March 
2010.  While  corruption  is  still  prevalent  in  many  areas,  good  progress  has  been 
achieved in the fight against corruption which is receiving greater attention than 
in  the  past.  Most  of  the  increased  number  of  cases  investigated  recently  and 
indictments  remain  to  be  brought  to  a  completion  before  the  legal  system.  The 
office for the fight against corruption (USKOK) continued to be active and issued 
indictments  in  some  important  cases.  USKOK  also  began  to  investigate  possible 
high  level  corruption  involving  senior  political  figures.  Recently  upgraded  legal 
and  administrative  structures  to  combat  corruption  have  yet  to  be  fully  tested  in 
practice. 

EN 

85 

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As regards the former Yugoslav Republic of Macedonia, the Commission has given 
high  priority  to  reforms  concerning  public  administration,  the  judiciary  and  the 
fight  against  corruption.  These  were  established  as  key  priorities  of  the  2008 
Accession Partnership and were used as benchmarks to determine the readiness of 
the  country  to  undertake  accession  negotiations.  The  2009  Progress  Report 
concluded that some progress was made in public administration reform, including 
reform  of  the  civil  service,  which  is  a  key  priority  of  the  Accession  Partnership. 
Further progress has been made on judicial reform, which is another key priority 
of  the  Accession  Partnership.  Good  progress  has  as  well  been  made  in 
strengthening  and  implementing  the  anti-corruption  framework.  Nevertheless, 
corruption remains prevalent and continues to be a serious problem in many areas. 
Continued efforts are needed, in particular as regards implementation of the legal 
framework. Finally, as concerns public procurement progress could be reported as 
regards  the  remedies  system.  However,  administrative  capacity  and  coordination 
mechanisms of the main stakeholders in the public procurement system still need 
further strengthening. 

The Commission monitors and reports on the judicial backlog and on the situation 
with respect to the public procurement system in Croatia as well as in the former 
Yugoslav  Republic  of  Macedonia  in  its  annual  progress  reports  published  in  the 
autumn.  These  issues  are  also  regularly  discussed  in  the  Joint  Parliamentary 
Committee,  which  holds  meetings  twice  a  year.  The  Commission  is  currently 
preparing the 2010 Progress Report which will be published in November 2010. 

126. 

(European Parliament, § 266) - Concludes that the need for constant, objective and 
transparent progress monitoring remains; in that regard, calls on the Commission in 
the event of accession proceedings to establish a starting-point in key areas relevant 
for accession and to use that starting-point as a reference and benchmark throughout 
the  accession  process;  considers  that  the  sustainability  of  progress  in  the  accession 
process and affirmation of the aims achieved during such process are of paramount 
importance  for  the  successful  continuation  of  the  Union;  consequently,  asks  for  a 
regular post-accession follow-up.  

Commission's response: 

The  Commission  has  made  concerted  efforts  to  improve  the  monitoring  process 
and has established clear benchmarks throughout the whole process.  

Learning  from previous enlargements, the EU  has refined  its enlargement  policy 
which  is  now  a  carefully  managed  process,  leading  through  successive  stages  to 
accession,  provided  the  necessary  conditions  are  fulfilled  at  each  stage  of  the 
process. As an example, the political criteria need to be (sufficiently) fulfilled for 
accession  negotiations  to  be  opened.  The  policy  is  based  on  the  own-merits 
principle, i.e. countries approach the EU depending on the pace of their political 
and economic reforms and their capacity to take on the obligations of membership. 
Reform  priorities  are  set  out  in  Accession  Partnerships  (for  candidate  countries) 
and  European  Partnerships  (for  potential  candidates)  in  the  form  of  Council 
decisions, based on proposals by the Commission. 

The  pace  of  advancement  in  EU-related  reforms  is  monitored  in  detailed  annual 
Progress reports. When asked by the Council to prepare an opinion on a country's 

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EU  membership  application, 
the  candidates' 
preparedness with regard to the Copenhagen criteria as well as the impact of the 
accession on key policy areas.  

the  Commission  examines 

The  first  stage  in  the  accession  negotiations  is  the  so  called  screening  process 
where  Commission  experts  explain  the  acquis  under  the  different  chapters  and 
experts  from  the  candidate  countries  explain  their  plans  for  implementing  the 
acquis.  The  results  are  screening  reports  by  the  Commission,  addressed  to  the 
Council,  recommending  either  the  opening  of  a  chapter  or  setting  opening 
benchmarks  that  need  to  be  fulfilled  before  the  chapter  can  be  opened.  These 
recommendations need to be endorsed by the Council. Once the Council confirms, 
on the basis of a Commission recommendation, that a candidate fulfils the opening 
benchmarks,  the  candidate  country  is  invited  to  send  its  opening  position  for  the 
chapter. Therein it describes in detail how it will implement the acquis and can ask 
for transitional periods, limited in time and scope. The EU reacts with a common 
(opening)  position,  prepared  by  the  Commission.  Therein  it  defines  its  position 
regarding the requests for transitional periods as well as conditions that need to be 
met  for  the  chapter  to  be  closed  ("closing  benchmarks").  Once  the  closing 
benchmarks  have  been  met  and  agreements  on  possible  transitional  measures 
found,  the  EU  reacts  with  a  closing  common  position,  prepared  by  the 
Commission.  After  the  negotiations  are  concluded  and  before  the  European 
Parliament  gives  its  assent  and  the  Council  decides  to  proceed  to  signing  the 
Accession Treaty, the Commission delivers a final formal and brief opinion.  

Throughout  the  negotiations  and  all  the  way  upon  accession,  the  fulfillment  of 
commitments taken by the  candidate country is systematically monitored through 
regular reports to the Council, peer assessment missions, and subcommittees under 
the  bilateral  agreements,  to  name  just  some.  Follow-up  post  accession  does  take 
place,  in  particular  when  specific  arrangements  have  been  agreed  regarding  the 
acceding countries. 

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Administrative expenditure 

The European Parliament has made no specific request to the Commission. 

Commission's response: 

No reply necessary. 

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Special Report No 10/2008 on EC Development Assistance to Health Services in Sub-
Saharan Africa 

127. 

(European Parliament, § 268) - The European Parliament invites the Commission to 
consider increasing its aid to the health sector during the 10th EDF mid-term review 
to support its commitment to the health MDGs, and to ensure that its assistance to the 
health sector is distributed respecting its policy priority of support to health systems.  

Commission's response: 

During  the  ongoing  10th  EDF  Mid-term  review  exercise,  the  Commission  has 
given  particular  attention  to  the  MDGs  and  to  its  support  in  this  respect.  It  is 
considering  how  to  best  invite  countries  to  give  more  attention  to  their  record  in 
terms of MDGs, starting with a reinforced attention to policy dialogue and quality 
of policies. Through direct increase of focal sector support (where health is a focal 
sector) or through general budget support, the Commission is working toward an 
increase  of  its  assistance  to  the  health  sector,  while  fully  respecting  and 
strengthening  ownership  by  partner  countries  and  division  of  labour  with  other 
donors. In the health sector, such support will be guided by the policy framework 
adopted during 2010 on "the EU role in Global Health (Communication and Staff 
Working  Documents  31/03,  Council  conclusions  10/05)  which  commits  the 
Commission  and  also  EU  Member  States  to  enhance  the  strengthening  of  health 
systems  by  adhering  to  the  aid  effectiveness  commitments,  and  committing  to  the 
specific targets of two thirds of EU health aid through national programme-based 
approach, and 50% by using country systems. 

128. 

(European  Parliament,  §  269  &  EDF  §  40)  -  Reminds  the  Commission  of  the 
undertaking  given  in  the  context  of  the  Development  Cooperation  Instrument  to 
devote  20  %  of  funds  to  health  and  basic  education  by  2009  in  all  European 
development  policy  spending,  and  requests  it  to  regularly  inform  Parliament  what 
percentage, broken down by country, of the total development assistance allocated to 
sub-Saharan Africa is committed for basic and secondary education and basic health.  

Commission's response: 

The Commission has allocated 277 million € to basic and secondary education and 
basic health through its DCI in 2008, which is equivalent to 20,2% of the total DCI 
allocation  during  this  year.  In  2009,  470  million  €  or  35%  of  the  DCI  allocation 
have  been  committed  mostly  for  Education.  Thus,  commitments  are  above  the 
undertaking of 20% in 2008 and 2009 but vary significantly from year to year. 

On  8  April  2009,  EuropeAid  sent  to  the  European  Parliament  Development 
Committee  a  complete  information  broken  down  by  country  on  the  amount  and 
proportion of EC support provided to health and education in Sub-Saharan Africa 
(SSA).  This  information  covered  the  5-year  period  2003  -  2007  as  well  as  the 
planned 10th EDF support to health and education in SSA. 

129. 

(European Parliament, § 270) - Urges the Commission to ensure that it has sufficient 
health  expertise  to  play  an  effective  role  in  the  health  sector  dialogue  by  ensuring 
that all delegations where health is a focal sector have health specialists, by working 

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more closely in post-conflict countries with ECHO health advisers, by forming closer 
partnerships with World Health Organization country offices with a view to drawing 
on their expertise and by entering into formal agreements with EU Member States to 
use  their  expertise;  requests  the  Commission  to  communicate  to  Parliament  the 
number  of  health  and  education  experts  respectively  available  in  the  region,  at 
delegation level as well as in its headquarters, and an overview indicating whether it 
has succeeded in increasing this number.  

Commission's response: 

In  March  2009  the  Commission  took  stock  of  the  public  health  expertise  at  its 
delegations  in  Sub-Saharan  Africa.  At  that  time  there  were  13  public  health 
specialists at 11 delegations. 

1/ Of the ten delegations with health as a focal sector or with significant activities 
in the health sector nine had health expertise. Eleven of the 30 delegations which 
did  not  have  health  expertise  drew,  where  necessary,  on  the  expertise  of  the 
Member States, and two of them drew on the UN agencies (WHO, Unicef). 

2/  Of  the  24  delegations  providing  General  Budgetary  Support  (GBS),  seven  of 
them  under  "MDG  contracts",  five  had  public  health  expertise.  The  other 
delegations  draw  on  the  expertise  of  the  Member  States  (e.g.  under  the  work-
sharing arrangements in Tanzania) or collaborate with the national offices of the 
World Health Organisation (WHO) (11 EU delegations associated the WHO in the 
mid-term review of the 10th EDF). 

130. 

(European Parliament, §§ 271-273) - Invites the Commission to continue to increase 
use  of  Sector  Budget  Support  in  the  health  sector,  to  focus  its  General  Budget 
Support  (GBS)  on  improving  health  services  and  to  continue  to  use  projects  for 
support to policy development and capacity-building; 

Urges  the  Commission  to  put  in  place  mechanisms  and  monitoring  tools  to  ensure 
that an adequate proportion of GBS aid is supporting basic needs, particularly in the 
health sector, to use targets that directly measure the outcome of policies, to provide 
support for capacity-building and to inform Parliament about the steps it has taken to 
that end; 

Invites the Commission to establish clearer guidance on the use of each instrument 
and  their  combinations,  as  well  as  to  work  more  closely  and  efficiently  with  the 
Global Fund in beneficiary countries.  

Commission's response: 

In order to maximise the impact of General Budget Support on social sectors, the 
Commission  is  trying  to  increase  its  departments'  capacity,  coordinate  the 
dialogues and thus contribute more effectively to monitoring the implementation of 
sectoral  policies.  Its  actions  are  consistent  with  the  Code  of  Conduct  on 
complementarity and division of labour in development policy. 

Financial  assistance  under  Budget  Support  may  not  be  allocated  to  a  specific 
sector. It helps to increase the tax revenue of the beneficiary country and hence its 

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ability to fund activities which it would otherwise have been unable to undertake. 
The dialogue with the governmental authorities serves to establish a performance 
framework  which  defines  the  conditions  and  the  results  to  be  achieved.  The 
disbursement of variable instalments is also partly linked to achieving results. 

As regards the work of the Global Fund to Fight AIDS, Tuberculosis and Malaria 
in the beneficiary countries: 

(i)  the  Commission  has  signed  an  agreement  with  the  WHO  to  contribute 
€2 million for implementing a programme to enhance the capacity of six countries 
in SSA to plan, carry out and monitor their action plans against HIV/AIDS, 

(ii)  the  Commission  has  developed  a  guide  for  EU  delegations  entitled 
'Strengthening  of  the  partnership  on  a  local  scale  between  the  European 
Commission  and  the  Global  Fund'.  It  was  produced  in  English  and  French  and 
sent  to  all  Heads  of  Delegation  in  June  2009.  EuropeAid  is  currently  drafting 
Programme  and  Project  Cycle  Management  (PPCM)  guidelines  which  revise, 
update and reorganise all the guidelines in a single document. One of the aims of 
this exercise is to strengthen the links between programming and aspects relating 
to implementation. 

131. 

(European  Parliament,  §  274)  -  Calls  on  the  Commission,  in  cooperation  with  the 
Court of Auditors, to identify how the weaknesses noted in the Court's report can be 
addressed, and to report to Parliament on the outcome of these discussions.  

Commission's response: 

The  Commission  is  taking  the  requested  action.  Progress  will  be  reported  to 
Parliament in the context of EuropeAid's Annual Activity Report 2010. 

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Special report No 12/2008 on the Instrument for Structural Policies for Pre-accession 
(ISPA), 2000-2006 

132. 

(European  Parliament,  §  275)  -  Urges  the  Commission  to  closely  follow  up  the 
implementation  of  ex-ISPA  projects,  to  examine  how  delays  in  the  implementation 
of  projects  could  be  avoided  or  reduced  in  the  future  when  implementing  similar 
instruments (for instance, the IPA), and to take all necessary steps in order to prevent 
delays in the preparation of future guidance documents;  

Commission's response: 

The Commission is taking the requested action. The satisfactory functioning of the 
decentralised  implementation  system  is  constantly  monitored,  in  particular  in 
relation  to  public  procurement  and  implementation  of  projects.  With  regard  to 
public procurement, the entire process is reviewed by the Commission Delegations. 
Audits  and  evaluations  are  carried  out  on  a  regular  basis.  On  the  spot  visits  are 
frequently  organised  to  verify  adequate  progress  of  the  projects.  Roadmaps  to 
gradually  waive  ex-ante  controls  by  Commission  Delegations  on  public 
procurement  have  also  been  prepared.  The  achievement  of  the  benchmarks 
included in the roadmaps will confirm the preparedness of the national institutions 
to assume full ownership for preparation and implementation of programmes and 
projects. This is relevant for both ISPA and IPA. 

133. 

(European  Parliament,  §  276)  -  Calls  for  more  rigorous  and  realistic  planning  by 
projects’  applicants  and  for  ways  to  speed  up  the  procedures,  when  implementing 
similar  instruments  in  the  future,  both  at  the  Commission  level  and  within  national 
administrations of beneficiary countries;  

Commission's response: 

The  requested  action  has  been  taken.  Regular  meetings  are  organised  with  the 
national  administrations  of  beneficiary  countries  to  discuss  implementation  of 
projects  and  propose  solutions  for  problems  encountered  (public  procurement, 
expropriations,  administrative  issues).  More  rigorous  and  realistic  planning  by 
projects'  applicants  is  ensured  through  review  and  appraisal  by  independent 
consultants. 

134. 

(European  Parliament,  §  277)  -  Invites  the  Commission  to  continue  its  systems 
audits in order to ensure that reliable systems are created for the management of the 
Structural  and  Cohesion  Funds,  and  to  prevent  potential  high-risk  situations  in  the 
future;  

Commission's response: 

The Commission is taking the requested action. The satisfactory functioning of the 
decentralised  implementation  system  is  constantly  monitored,  in  particular  in 
relation  to  public  procurement  and  implementation  of  projects.  With  regard  to 
public procurement, the entire process is reviewed by the Commission Delegations. 
Audits  and  evaluations  are  carried  out  on  a  regular  basis.  On  the  spot  visits  are 
frequently  organised  to  verify  adequate  progress  of  the  projects.  Roadmaps  to 

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gradually  waive  ex-ante  controls  by  Commission  Delegations  on  public 
procurement  have  also  been  prepared.  The  achievement  of  the  benchmarks 
included in the roadmaps will confirm the preparedness of the national institutions 
to assume full ownership for preparation and implementation of programmes and 
projects. This is relevant for both ISPA and IPA. 

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Special report No 1/2009 on banking measures in the Mediterranean area in the context 
of the MEDA programme and the previous protocols 

135. 

(European  Parliament,  §  278)  -  The  Commission  should  improve  the  effective 
coordination  of  assistance  by  the  Union,  the  European  Investment  Bank  (EIB)  and 
other  international  and  local  partners,  and  regular  exchange  of  information,  in 
particular at the local level, in order to increase the consistency and complementarity 
of activities.  

Commission's response: 

The  level  of  coordination  between  the  European  Union,  the  EIB  and  other 
European multilateral and bilateral finance institutions has significantly improved 
since the creation of the Neighbourhood Investment Facility (NIF) in mid 2008. 

The  Commission  has  led  the  way  by  encouraging  co-operation  among  European 
Public Finance Institutions and by promoting a harmonised approach towards the 
partner  countries  (e.g.  in  terms  of  procurement  rules,  single  reporting,  etc.).  The 
NIF  paves  the  way  for  the  concrete  implementation  of  grant/loans  coordination, 
division of labour and harmonisation of procedures. 

An important step in that direction is the NIF Framework Arrangement, signed at 
the end of 2009 between the European Commission and the nine European Public 
Finance  Institutions,  which  clarifies  the  role  and  the  responsibilities  of  each 
institution in the implementation of NIF operations. The cooperation between the 
Commission and the finance institutions, as well as among the finance institutions 
themselves, has reached a new level in terms of mutual recognition of procedures. 
For each NIF project, a European Public Finance Institution is designated as the 
Lead Finance Institution, coordinating project implementation with the European 
Neighbourhood Partner (ENP) country on behalf of the others. 

This  innovative  approach  significantly  reduces  transaction  costs  for  the  partner 
country  while  increasing  the  competitiveness,  effectiveness  and  visibility  of  the 
joint  European  cooperation.  This  is  fully  in  line  with  the  objectives  of  the  Paris 
Declaration,  the  Accra  Agenda  for  Action  and  the  European  Consensus  on 
Development. 

The  information  flow  with  delegations  has  also  been  enhanced  with  a  systematic 
consultation on new operations to be financed under the NIF (investment projects) 
or  under  the  EU-funded  Support  to  the  Facility  for  Euro-Mediterranean 
investment  and  partnership  FEMIP  (technical  assistance,  risk-capital).  EIB’s 
reports  are  also  sent  to  the  delegations,  and  monitoring  missions  regularly  take 
place. 

136. 

(European Parliament, § 280) - The EP underlines the importance of a management 
agreement concerning the referred banking measures mandated to the EIB on behalf 
of  the  Commission  in  order  to  ensure  appropriate  monitoring,  to  cover  the 
environmental aspects, to safeguard the financial interests of the Union and to ensure 
that the intermediaries and promoters fulfil their financial and reporting obligations.  

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Commission's response: 

The new Framework Agreement is currently under negotiation with the EIB. 

137. 

(European  Parliament,  §  281)  -  The  EP  stresses  the  importance  of  a  tailor-made 
evaluation and monitoring programme for banking measures to be applied within the 
framework of the European Neighbourhood and Partnership Instrument.  

Commission's response: 

The new Framework Agreement currently under negotiation shall also cover these 
issues. 

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Special report No 2/2009 on the European Union's Public health Programme (2003-
2007): an effective way to improve health? 

138. 

(European  Parliament,  §  282)  -  Invites  the  Commission  to  report  to  Parliament  on 
the outcome of its mapping exercises for the current PHP and stresses that the risk of 
dilution  should  be  addressed  in  the  mid-term  and  ex-post  evaluations  of  the 
programme;  

Commission's response: 

The communication to Council and Parliament on the results of the evaluation of 
the Public Health Programme 2003-2007 which should be finalised end of 2010 or 
early 2011 takes this recommendation into account and will provide the requested 
information on mappings exercises. 

139. 

(European Parliament, § 284) - Considers, therefore, that any successor PHP should 
focus on networks and exchange of best practice and that more use should be made 
of  the  open  method  of  coordination  with  a  view  to  encouraging  the  exchange  of 
'good practices';  

Commission's response: 

Results of the final evaluation of the first Health Programme and of the mid-term 
evaluation of the second Health Programme as well as recommendations following 
the  ECA's  Special  report  will  be  taken  into  account  for  the  design  and  impact 
assessment of any successor Health Programme. 

140. 

(European  Parliament,  §  285)  -  Invites  the  Commission  to  set  out  an  explicit 
intervention logic for any putative successor programme to the current PHP; stresses 
that this should be done in its ex-ante impact assessment which is to accompany the 
Commission proposal for such a programme;  

Commission's response: 

An  explicit  intervention  logic  will  be  to  set  out  for  any  successor  Health 
programme. This will be done in the impact assessment which is to accompany the 
Commission proposal. 

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Special report No 3/2009 on the effectiveness of Structural Measures spending on waste 
water treatment for the 1994-1999 and 2000-2006 programme periods 

141. 

(European Parliament, § 287) - Takes note of the under-utilisation of some treatment 
plants and urges the EU-funded treatment plants to maintain a cost-effective system 
of  functioning;  therefore  encourages  the  Commission  and  Member  States  to  find 
ways  to  ensure  that  EU-funded  treatment  plants  are  adequately  connected  to  the 
sewage networks;  

Commission's response: 

The  Commission  has  taken  the  requested  action.  In  addition  to  its  reply  to 
paragraph  59  (a)  of  the  ECA's  Special  report  on  Waste  Water,  the  Commission 
believes  that  under-utilisation  of  Waste  Water  Treatment  Plants  (WWTP)  was 
rather a transitional problem due to constructing in parallel the treatment plants 
and the sewage networks. Thus this problem appeared mostly in situations prior to 
2005,  which  was  the  last  deadline  set  by  the  Waste  Water  Treatment  Directive: 
Member  States  tried  to  be  in  conformity  with  the  Directive  by  having  first  the 
WWTP  and  then  construct  all  other  connected  and  associated  works.  This  is  no 
more a problem as these plants are now adequately connected to sewage networks. 

142. 

(European  Parliament,  §  288)  -  Acknowledges  the  Commission's  efforts  to  bring 
about  a  revision  of  the  relevant  Directive  (Council  Directive  86/278/EC  –  the 
Sewage  Sludge  Directive),  encourages  the  speeding-up  of  the  current  revision 
procedure  in  order  to  incorporate  recent  developments  and  adjust  Member  States' 
different practices in this field,  

Commission's response: 

The Commission takes note of the recommendation and confirms that work on the 
revision  is  progressing,  aiming  at  a  legislative  proposal  within  the  shortest  delay 
possible, in 2011 if appropriate. 

143. 

(European Parliament, § 289) - Underlines the need for a more rigorous examination 
of  projects  at  the  application  stage  in  order  to  prevent  shortcomings  in  anticipated 
effect;  therefore  invites  the  Commission  to  further  develop  internal  guidelines  and 
checklists for use in the appraisal process, in order to improve consistency of grant 
applications,  and  to  ensure  proper  follow-up  action  in  cases  where  required 
information or action is not forthcoming;  

Commission's response: 

The  requested  action  has  been  taken.  The  Commission  developed  an  internal 
checklist  for  co-financed  water  projects  at  the  application  stage  during  the  first 
half of 2009. This was discussed with the environmental authorities in the Member 
States in the format of the European Network of Environment Authorities (ENEA) 
on 10.06.09, with comments requested by 30.09.09. Following the incorporation of 
their comments, the internal checklist dated 20.11.09 was made available on both 
the websites  of DG  ENV and DG  REGIO in November 2009 in order to improve 
transparency with the Member States. Appropriate and targeted training has been 

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provided  for  desk  officers  in  DG  ENV  and  DG  REGIO  on  using  this  checklist 
during  2009  and  2010,  and  it  is  proposed  to  repeat  this  regularly  due  to  staff 
turnover. An updated and improved version of the checklist has been prepared in 
July 2010. 

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Special report No 4/2009 on the Commission's management of Non-State Actors' 
involvement in EC Development Cooperation 

144. 

(European Parliament, § 290) - Regrets and cannot accept the existing gap between 
EU policy commitments as regards the involvement of Non-State Actors (NSAs) in 
development corporation and actual implementation practices, and therefore expects 
the competent Member of the Commission to present evidence showing full political 
support and leadership action for an effective implementation of policy commitments 
vis-à-vis NSAs, on the part of both its headquarters and the Commission delegations; 
further  regrets  that  the  success  criterion  for  development  is  reduced  to  "economic 
development", because this approach ignores the fact that the gap between those who 
have and those who have not has dramatically widened; requests the Commission to 
see to it that, by the end of 2010, every delegation has at least one responsible full-
time expert dealing with NSAs' policies, contacts and contracts;  

Commission's response: 

The Commission is working on the requested action. The new instruments (2007-
2013) reflect the main changes in the NSA sector worldwide. Programmes are no 
longer  restricted  to  European  NGO  but  are  opened  to  a  large  spectrum  of 
organizations,  especially  to  local  stakeholders  representing  specific  groups.  This 
evolution of EC programmes has been positively appreciated but nonetheless, the 
goals are ambitious and often difficult to attain. 

In  addition,  the  EC  is  currently  organizing  the  "Structured  Dialogue  for  an 
efficient  partnership  in  development."  This  one-year  process  will  involve  civil 
society  organisations  and  local  authorities  from  Europe  and  Partners  countries 
and  also  EU  Delegations,  the  European  Parliament  and  Member  States  through 
the organisation of Working Group sessions in Brussels and other regions of the 
world.  Commission  launched  this  process  in  March  2010  and  it  is  expected  that 
outcomes  of  this  initiative  will  contribute  to  improving  the  effectiveness  of  all 
stakeholders  involved  in  EC  cooperation.  The  Structured  Dialogue  will  have  its 
final conference in May 2011 in Budapest. 

Concerning  HR  resources  in  Delegations,  the  EC  agrees  that  additional  efforts 
have to be made to enable Delegations to have in-depth understanding of the NSA 
sector  and  work  is  already  in  progress  (regional  seminars,  mapping  studies, 
guidelines on the involvement of NSA's in budget support programmes, etc.). But 
within the limited resources it is not possible to have at least one full time expert on 
NSAs. 

145. 

(European  Parliament,  §  291)  -  Notes  that  those  developing  countries  which  have 
taken their development process into their own hands have achieved good levels of 
poverty reduction; underlines the key role of the State in development and invites the 
Commission and its delegations to further improve relationships with partner country 
governments  in  order  to  enable  there  to  be  more  effective  engagement  and 
consultation with NSAs;  

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Commission's response: 

The  EC  is  taking  the  requested  action  and,  to  promote  enabling  environment  for 
Civil  Society  Organisations  (CSO)  in  countries,  the  EC  is  engaged  in  political 
dialogue  with  the  States  (especially  ACP  countries  through  Article  8  of  the 
Cotonou  Agreement)  and  has  at 
thematic 
programmes: 

its  disposals  geographic  and 

- Geographic programmes result from a direct negotiation with the Partner States. 
Civil  society  capacity-building  programmes  are  implemented  and  bring  very 
positive  results,  thanks  to  the  commitment  of  national  authorities.  In  other 
specifics  contexts  (case  of  partnerships),  it  is  difficult  to  push  partners  towards  a 
more inclusive process (reluctance of the sovereign state). 

-  Thematic  programmes  can  be  more  flexible;  they  follow  another  intervention 
logic  called  "Actor  Oriented".  They  correspond  to  the  need  for  addressing  a 
specific  issue  worldwide  and  aim  at  promoting  EU  common  values  around  the 
world  (promotion  and  protection  of  Human  Rights,  gender  equality,  sustainable 
development, etc.) even in the cases of difficult partnerships (EIDHR). 

The  mid-term  review  of  the  ENP,  DCI  and  EDF  has  provided  opportunities  for 
consultation on the design of development strategies. EC Delegations are asked to 
organise  regular  consultation  sessions  for  the  preparation  of  geographic  and 
thematic programmes when NSA are important stakeholders.  

146. 

(European  Parliament,  §  292)  -  Finds  the  lack  of  complete  and  reliable  data 
extremely  regrettable  and  expects  the  Commission  to  take  remedial  action 
immediately  in  so  far  as  reliable  data  is  a  condition  for  starting  to  measure  results; 
therefore calls on the Commission to submit to Parliament a full financial overview 
of the EU funds channelled through NSAs from the different budget lines subdivided 
by the countries concerned before the start of the 2011 budget procedure;  

Commission's response: 

The Commission is already publishing the list of all grants and contracts awarded 
including 
the  EuropeAid  Web-site: 
to  Civil  Society  Organisations  on 
http://ec.europa.eu/europeaid/work/funding/beneficiaries_en.htm  

The data covering 2009 were published in the middle of June 2010. Furthermore, 
the  EC  can  provide  the  EP  with  a  preliminary  list  of  grants  awarded  to  Civil 
Society Organisations with inter alia the name and nationality of the organisation, 
title of the action, amount of the EC contribution and the name of the programme 
(domain) from where the action is financed. The list would also indicate whether 
the  grant  have  already  been  subject  to  publication  on  the  EuropeAid  Website  or 
whether  publication  was  restricted  with  a  view  to  protect  the  security  of  the 
beneficiaries in line with Article 30 (3) of the Financial Regulation. 

In  view  of  the  fact  that  the  list  contains  information  about  grants  not  to  be 
published,  the  list  would  be  submitted  under  the  confidential  procedure  agreed 
between the European Parliament and the Commission. 

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The  Commission  has  recently  improved  its  classification  system  of  Civil  Society 
organisation  active  in  the  area  of  external  assistance  and  the  reclassification  is 
ongoing. The process is expected to be completed in end 2010 at which stage the 
refined lists could be made available. 

147. 

(European Parliament, §§ 293 & 294) - Takes the view that quality of aid is more 
important than quantity of aid and invites the Commission to play an important role 
in addressing the evident chaos in development assistance by promoting strong and 
efficient donor coordination and improving the current aid architecture; requests the 
Commission  to  consider  whether  this  may  not  be  the  right  moment,  taking  full 
account  of  the  Court's  remarks,  to  overhaul  the  whole  system  of  (co-)financing  of 
NSAs in order to make sure that NSAs can rely on transparent and efficient rules for 
the purposes of participation in programmes and projects; 

Invites the Commission to give due consideration to the fact that donors are political 
actors and that in some cases there might be conflicting interests between donors and 
recipient countries; underlines that strong democratic national institutions and a well-
defined policy for distribution of wealth are preconditions of sustainability; is of the 
opinion  that,  in  order  to  achieve  a  more  coherent  policy  in  programming  and 
subsequent  programmes  and  projects  and  adequate  evaluation,  there  should  be  a 
substantial  shift  from  co-financing  projects  for  NSAs  to  a  100  %  EU  funding  of 
projects;  

Commission's response: 

Genuine  donor  coordination  can  help  to  face  common  challenges  and  overcome 
problems. The EC works naturally towards coordination of donors, especially since 
Member  States  and  EC  play  a  key  role  in  the  global  aid  effectiveness  debate 
following  the  Paris  Declaration  and  the  Accra  Agenda  for  Action,  which 
emphasized  (among  other  issues)  donor  coordination.  Concerning  civil  society 
issues,  EC  is  an  active  player  within  the  Donor  Group  on  civil  society  and  Aid 
Effectiveness which has as a main objective a contribution to the OECD debate in 
the view of the next High Level Forum in 2011. Issues identified are also faced by 
others donors, including Member States. For that reason, the EC is engaged in the 
"Structured  Dialogue  for  an  efficient  partnership  in  development"  involving 
Member  States,  EP  and  civil  society  organisations  and  aimed  at  increasing  the 
effectiveness of all stakeholders involved in EC cooperation. This first year of this 
initiative  (March  2010  -  May  2011)  will  be  organized  around  working  groups' 
sessions in Brussels and regional seminars in Africa, Latin America and Asia. 

Other initiatives like the development of methodologies for mapping studies and a 
currently on-going study on how to engage NSA in new aid modalities are aimed at 
providing  guidance  to  EC  Delegations  on  how  to  enhance  and  facilitate  NSA 
participation in political dialogue as well as in programmes and projects. 

Concerning the last sentence of the request: the Commission is not able to apply 
the requested action as the key principle of the EC grant award process is the "co-
financing", in application of the FR 

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- This principle ensures a minimum ownership of the action by partners as well as 
the  (financial)  sustainability  of  the  action.  The  EC  should  rely  on  organizations 
which have a minimum of financial capacity to act. 

- EC co-financing starts with 50% and can go up to 90% of the Action and even in 
some very specific areas and exceptional cases (EIDHR small grants), the EC can 
finance 100% of the project. 

148. 

(European  Parliament,  §  296)  -  Invites  the  Commission  to  present  proposals  for 
modifications of the Financial Regulation which will allow the EU to act as a strong 
player among other international donors;  

Commission's response: 

The  Commission  refers  to  its  proposal  for  a  regulation  of  Parliament  and  the 
Council  on  the  Financial  Regulation  applicable  to  the  general  budget  of  the  EU 
(COM (2010) 260 final). In particular, in Article 164 it is proposed to authorise the 
Commission  to  set  up  and  manage  Union  trust  funds  for  external  actions,  which 
would intervene in emergency, post-emergency crisis operations (e.g. Haiti), or for 
thematic actions, and would pool the contribution of the Union budget with funds 
from other donors. The main objective of such a delivery instrument is to allow the 
Union to act as a major and more visible player in the field of development aid. 

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Special report No 5/2009 on the Commission's Treasury Management 

149. 

(European Parliament, § 297) - The Commission should improve its oversight of the 
different  treasury  management  activities  performed  and,  as  recommended  by  the 
Court of Auditors, meetings should take place more regularly between the two DGs 
concerned (DG Budget (DG BUDG) and the DG for Economic and Financial Affairs 
(DG  ECFIN))  with  a  view  to  sharing  information  on  risks  and  exchanging 
experiences and best practices regarding treasury and asset management activities on 
a Commission-wide level.  

Commission's response: 

The  requested  action  has  been  taken.  Meetings  are  regularly  held  between  the 
Directorates  General  for  Economic  and  Financial  Affairs  (DG  ECFIN)  and  for 
Budget (DG BUDG) with a view to sharing information on risks and exchanging 
experiences and best practices regarding treasury and asset management activities 
on a Commission-wide level. 

150. 

(European  Parliament,  §  298)  -  The  Commission  should  continue  to  take  all 
necessary action to ensure that significant financial risks are effectively and closely 
monitored throughout the course of the year; the EP welcomes the fact that, in order 
to further improve the situation, the Commission has already proposed to and agreed 
with the Court of Auditors that as from the 2008 closure an official circular letter is 
to  be  sent  to  the  financial  organisations  concerned  in  order  to  obtain  from  them 
accurate, complete and standardised information regarding the fiduciary accounts.  

Commission's response: 

The Commission has a long standing practice of annually sending circular letters 
to  all  the  banks  it  has  opened  accounts  with.  The  answers  to  these  letters  are 
addressed  by  the  banks  directly  to  the  Court  of  Auditors,  and  are  copied  to  the 
Commission.  Since  2008  such  letters  are  also  sent  to  financial  institutions  where 
Commission  services  have  opened  fiduciary  accounts.  All  these  accounts  are 
disclosed in the Commission's annual accounts. 

151. 

(European Parliament, § 299) - The Commission should draw up a control plan in 
DG  BUDG  for  each  12-month  period  on  the  basis  of  risk  analysis,  to  carry  out 
controls  during  and  after  the  year,  and  to  report  to  Parliament  on  the  problems 
encountered no later than three months after the end of the year concerned.  

Commission's response: 

The  Commission's  risk  management  framework  requires  services  to  carry  out  a 
full  risk  assessment  each  year  to  inform  their  Annual  Management  Plans.  This 
includes  the  identification  of  the  level  of  risk  for  each  activity,  and  for  the 
Directorate-General  for  Budget  includes  the  Treasury  function.  Services  must 
define  action  plans  to  manage  critical  risks  and  the  results  of  these  should  be 
reported in their Annual Activity Reports. 

EN 

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   EN 

 
152. 

(European  Parliament,  §  300)  -  The  Commission  should  move  ahead  with  the 
overview  of  the  risks  related  to  its  treasury  operations  (DG  BUDG),  which  forms 
part of its annual accounts and which provides a clear and comprehensive summary 
of the risks to which it is exposed, of the ways in which such risks are managed, and 
of the measures which have been put in place to control, minimise or neutralise them.  

Commission's response: 

The requested action has been taken. A consolidated risk management document 
for  the  Directorate-General  for  Budget  treasury  operations  is  available  since 
September 2009. 

153. 

(European Parliament, § 301) - For the sake of transparency, the Commission should 
more clearly document its procedures for transferring funds between Member States’ 
own  resources  accounts,  and  should  and  better  document  the  specific  selection 
procedure followed in each case.  

Commission's response: 

The  existing  procedure  for  this  purpose  is  complete  and  adequate  and  well 
documented; in addition it is complemented by step-by-step instructions. There are 
no  selection  procedures  to  be  applied  in  this  context.  Also,  in  the  meantime,  this 
procedure  has  been  updated  by  the  Commission;  so  the  Court  of  Auditors' 
recommendation in this area is now fully implemented. 

154. 

(European  Parliament,  §  302)  -  The  Commission  should  improve  its  database 
record-keeping, to optimise cross-checks and to follow up on the Court's observation 
concerning the coordination improvement needed in order to take into consideration 
the  Commission’s  overall  risk  exposure  with  each  commercial  bank  when  the 
accounts’  limits  for  holding  funds  with  commercial  banks  are  established  by  the 
Directorates-General concerned.  

Commission's response: 

The  requested  action  has  been  taken.  The  two  Directorates  General  (DG  BUDG 
and  DG  ECFIN)  have  put  in  place  practices  to  exchange  information  on  their 
respective  exposure  with  commercial  banks,  and  to  organise  regular  meeting  to 
review issues of mutual interest. 

155. 

(European  Parliament,  §  303)  -  The  EP  welcomes  and  supports  the  Commission's 
endeavours  to  propose  the  current  system  for  the  management  of  provisionally 
cashed fines, which was subject to a review in 2008, and expects that the proposal for 
a  Commission  decision  on  this  matter  issued  in  early  2009  by  DG  BUDG  will 
increase its security.  

Commission's response: 

The  requested  action  has  been  taken.  A  new  system  for  the  management  of 
provisionally  cashed  fines,  which  addresses  all  concerns  raised  by  the  European 
Court of Auditors, is in place since the beginning of 2010. 

EN 

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Special report No 6/2009 on European Union food aid for deprived persons: an 
assessment of the objectives, the means and the methods employed 

156. 

(European Parliament, § 306) - Believes that better criteria are needed to target aid 
at those countries and recipients that are most in need;  

Commission's response: 

The requested action has been taken. The Commission proposal to reform the food 
distribution  scheme  to  the  most  deprived  persons  (COM(2008)0563)  foresees 
requesting  Member  States  to  define  clearer  priorities  via  the  drawing  up  of 
national  food  distribution  programmes,  setting  their  objectives  and  priorities  for 
food distribution to the most deprived. It is to be underlined that the participation 
of Member States to this scheme remains voluntary. 

157. 

(European  Parliament,  §  309)  -  Expects  the  Commission  to  implement  the  Court's 
recommendations  in  order  to  allow  the  budgetary  authorities  to  have  complete  and 
objective information on the results of the programme;  

Commission's response: 

The requested action has been taken. The Commission proposal to reform the most 
deprived scheme (COM(2008)0563) foresees reinforcing Member States' reporting 
obligations  to  be  subsequently  laid  down  by  the  Commission.  However,  the  data 
currently  available  already  allow  the  Commission  to  state  that  the  impact  of  the 
programme is very substantial since, as the Court recognises in its special report, 
the programme provides between 30 and 70%, depending on the charities and the 
Member States, of the total food distributed in the participating Member States to 
the most deprived people. 

EN 

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Special report No 7/2009 on the management of the Galileo programme's development 
and validation phase 

158. 

(European  Parliament,  §§  311  &  315)  -  The  European  Parliament  asks  the 
Commission  to  follow  up  on  the  Courts'  recommendation  in  the  forthcoming 
Communication  on  the  future  of  Galileo  with  a  view  to  clarifying  the  Galileo 
programme's  political  objectives  and  translating  them  into  strategic  and  operational 
objectives in order to establish a solid roadmap for Galileo pending full deployment; 

Calls on the Commission to prepare updated figures and cost benefit analyses of the 
Galileo project and to inform Parliament accordingly.  

Commission's response: 

The Commission will be in a position to inform Member States and the Parliament 
of an update of the cost figures concerning the Galileo program through the mid 
term review to be adopted before end 2010. 

159. 

(European Parliament, § 312) - The European Parliament is worried by the Court's 
finding that the Galileo Joint Undertaking failed to achieve most of its objectives and 
that  its  activities  were  seriously  constrained  by  governance  issues;  asks  the 
Commission to ensure, in line with the Court's recommendation, that in the case of 
future joint undertakings the governance structure does not impede the activities of 
the joint undertaking  

Commission's response: 

joint  undertaking.  For  doing  so, 

The Commission carefully examines the rationale and optimal governance of any 
new 
the 
recommendations  formulated  by  a  report  of  January  2010,  which  draws  lessons 
from the experience of Joint Technological Initiatives so far. 

into  account 

it  also 

takes 

The Commission already presented some proposals addressing this issue within the 
triennial revision of the financial regulation. 

160. 

(European  Parliament,  §  313)  -  The  European  Parliament  considers  that  the 
European taxpayers should be informed of any participation by third countries in the 
Galileo  and  EGNOS  programmes;  therefore  requests  that  the  Commission  provide 
Parliament with detailed information on any kind of cooperation between the EU and 
third countries concerning the Galileo and EGNOS programmes.  

Commission's response: 

It is noted that the agreements which the EU concludes with third countries on the 
cooperation in the European GNSS programmes are approved by the Council and 
are  publicly  accessible  documents.  The  signature  of  the  cooperation  agreement 
with Norway is scheduled in September 2010. This document will be send to the EP 
for consent in accordance with the article 218 of the Lisbon Treaty. 

EN 

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161. 

(European Parliament, § 314) - The European Parliament calls on the Commission 
and the European GNSS Supervisory Authority, in its accounts, and the Court, in its 
reports, to provide the discharge authority with clear and comprehensive information 
concerning the tangible and intangible assets created under the Galileo and EGNOS 
programmes, which are owned by the European Union.  

Commission's response: 

The Commission became the owner of the EGNOS assets in April 2009 when they 
were  transferred  from  the  European  Space  Agency  (ESA).  As  a  result,  the 
Commission did not include these assets in its 2008 accounts because it was not the 
owner.  The  accounting  treatment  of  the  Galileo  expenditure  as  research 
expenditure  is  continued  and  in  accordance  with  the  EU  accounting  rules.  The 
transfer  of  the  assets  being  created  is  not  foreseen  until  the  end  of  the  In-Orbit 
Validation  (IOV)  phase,  expected  to  be  during  2012.  The  Commission  is  already 
working  closely  with  ESA  to  ensure  that  at  the  time  of  this  transfer  all  the 
necessary  accounting  and  technical  information  will  be  available  to  ensure  a 
smooth handover. 

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Special report No 8/2009 on "Networks of excellence" and "Integrated projects" in 
Community Research policy: did they achieve their objectives? 

162. 

(European Parliament, §§ 316-321) - The European Parliament notes the existence 
of a high "expectation gap", i.e. the fact that fewer than 55 % of all projects reviewed 
ex  post  maintained  their  initial  "excellent"  evaluation;  asks  the  Commission  to 
reconsider its evaluation procedures; 

Recalls  that  the  vast  majority  of  applications  do  not  exceed  the  "excellence" 
threshold (only 15 % to 20 %), whereas application costs (amounting in some cases 
to  as  much  as  EUR  300  000)  are  borne  by  applicants;  in  this  regard,  urges  the 
Commission to apply coherently and efficiently sensible discretion (e.g. multi-stage 
procedures)  in  order  to  make  most  efficient  use  of  the  money  allocated  to  research 
instead of "administration of research"; 

Considers it unfortunate that, depending on their eventual success in the application 
procedure, only 53 % to 86 % of all parties concerned fully understood the nature of 
the  instruments  applied  in  the  Sixth  Framework  Programme  (FP6);  regrets  the  fact 
that  in  some  cases  the  choice  of  instrument  was  apparently  geared  to  fiscal  rather 
than material considerations; notes that the existence of a high number of partners in 
the  Networks  of  Excellence  (NoEs),  as  well  as  the  Commission's  strong  focus  on 
legal  integration,  constitutes  a  specific  challenge,  and  that  the  expert  group  on  the 
future of NoEs has recommended that larger partnerships should be formed only in 
exceptional, duly justified cases; 

Regrets  that,  notwithstanding  Parliament's  demands  for  a  more  service-  and 
customer-oriented  implementation  of  research  programmes,  only  limited  progress 
has  been  achieved  in  the  formation  of  "one-stop  shops"  covering  the  full  range  of 
Directorates-General  within  the  research  family,  standardisation  in  terms  of 
application  procedures,  prerequisite  documentation  and  consistent  communication; 
highlights the fact that the public regards the Commission as a single entity; 

Demands  in  that  respect  that  the  Commission  finally  take  the  appropriate  steps 
towards a pro-active approach in terms of customer support, internal quality control, 
including  second-level  standardisation,  and  coherent  management;  asks 
the 
Commission  to  make  available  on-line  all  legal  texts  on  which  the  grants  contracts 
are based including, where appropriate, references to Belgian law; 

Recalls Parliament's constant demands for a reduction of the administrative burden, 
in particular in grants procedures ; deplores the fact that the time to contract averages 
13  months,  representing  an  increase  of  four  months  compared  to  the  FP5;  with  a 
view to the FP7, demands that the Commission make use of existing administrative 
tools  (e.g.  Personal  Identification  Codes  (PICs)  and  Legal  Entity  Appointed 
Representatives (LEARs)).  

Commission's response: 

The  Commission  when  carrying  out  evaluations  monitors  that  within  the  current 
legal framework the best proposals have been chosen. Further to this process the 
implementation  of  projects  can  result  in  unexpected  difficulties  that  are 

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subsequently tackled. Nevertheless, according to the results of expert questionnaire 
surveys,  and  feedback  from  independent  observers,  the  current  evaluation 
procedure  continues  to  be  rated  highly,  including  in  comparison  with  other 
national and international schemes. 

The  Commission  is  aware  of  the  significant  costs  that  can  be  incurred  when 
consortia prepare proposals. However, the figure referred to is much higher than 
figures normally quoted to the Commission, even as an upper limit. The two-stage 
procedure can indeed alleviate the effort required of applicants. It is being used in 
many calls for proposals. However, while a two-stage process works well in many 
areas, it is not a panacea, since experience shows that often the effort required to 
prepare a good first-stage represents a substantial portion of the effort to write a 
full proposal. Generally observers and applicants are ambivalent about the possible 
benefits  of  two-stage  procedures.  Finally,  it  should  be  recalled  that  the  two-stage 
procedure prolongs the time to grant. 

The  start  of  FP7  has  seen  a  number  of  simplifications  compared  to  previous 
Framework Programmes. Some of them are linked to improvements in the systems 
and processes of implementation and contribute to reducing resources needed for 
the administrative management of grant related activities. This includes: 

- the guarantee fund that allow reducing the number of several ex-ante controls; 

-  fewer  certificates  on  the  financial  statements  (FP6:  audit  certificates)  as  a 
threshold for making them necessary has been introduced (€ 375 000); 

-  much  fewer  ex-ante  financial  capacity  checks.  Only  coordinators  and 
beneficiaries asking for more than € 500 000 contribution will be checked, leading 
to  the  effect  that  nine  out  of  ten  FP7  participants  will  be  exempt  from  ex-ante 
checking; 

-  the  unique  registration  of  participants  and  the  related  IT  systems.  Participants 
are  registered  and  validated  once  and  the  legal  information  is  reused  for  all 
subsequent  participations.  The  central  registry  is  used  for  all  programmes 
managed by the five "research DGs". Nearly 20 000 entities are already registered 
and validated now. The system of unique identifiers (Participant Identity Codes - 
PIC)  and  unique  contact  persons  for  each  legal  entity  (Legal  Entity  Appointed 
Representative) leads to major streamlining of grant management at all stages, and 
also to better data quality; 

- streamlined processes and guidelines for amendments and for project reporting, 
leading to reduced burden both for beneficiaries and Commission services; 

- the average reporting period has been extended , which reduces considerably the 
number of reports and financial statements to be prepared by the beneficiaries and 
processed by the Commission; 

-  the  majority  of  interactions  with  beneficiaries  now  via  Web-based  online 
applications  (move  towards  e-FP7)  that  are  integrated  under  a  Researchers 
Participant  Portal.  All  these  systems  are  interlinked  and  connected  to  the  back 
office systems, presenting the user at each process step with Web forms pre-filled 

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with  all  the  existing  data,  avoiding  thus  repeated  requests  for  the  same 
information. 

Average time-to-grant in FP7 is about one month shorter than in FP6, and further 
reduction is expected as a result of the above simplifications. 

Since the start of FP7, the Commission operates a single research enquiry service 
for all questions on participants related to proposal and grant management. 

Besides, the Commission is constantly working on the improvement of the clarity 
and accessibility of guidance documents and services, by streamlining the guides, 
removing  unnecessary  jargon  and  using  consistent  terminology  -  to  reduce  the 
entrance barriers for newcomers, in particular SMEs. 

All legal and guidance documents for FP7 participants are available on CORDIS 
since the start of FP7. 

unique 

In addition, the Research Participant Portal launched in 2009 has started acting as 
a 
participants 
(http://ec.europa.eu/research/participants/portal/appmanager/participants/portal). 
The  medium-term  goal  is  to  integrate  all  front  office  IT  systems  under  this 
common umbrella. 

("one-stop 

platform 

shop") 

FP 

for 

The overall median in FP7 is currently 330 days, i.e. 30 days shorter than in FP6. 
Hence,  the  Commission  can  say  that  the  start  of  FP7  went  much  more  smoothly 
than the start of the previous framework programmes. But the Commission must 
also note that a comparison of 17 funding agencies in the field of health research 
in the world showed that a 1-year time-span from calls' deadline to research start 
seems  to  be  the  rule  for  collaborative  schemes  with  many  beneficiaries  requiring 
negotiation elements (this is in particular the case for the US National Institutes of 
Health centres of excellence). 

163. 

(European  Parliament,  §  322)  -  Is  dissatisfied  that  the  FP6  did  not  attain  the 
objective of stronger participation of private participants, in particular SMEs; shares 
the Court's view that some provisions actively discouraged their participation; on the 
whole, takes the view that the legal provisions and rules (including model contracts 
and guidelines) are excessively complex and in themselves clog up the effective and 
efficient implementation of research policies.  

Commission's response: 

Several  measures  where  introduced  in  FP7  to  simplify  SME  participation:  The 
reimbursement  rates  and  the  flat  rates  for  indirect  costs  for  SMEs  were 
considerably  increased  in  FP7  in  comparison  to  FP6.  The  introduction  of 
thresholds  for  ex-ante  verification  of  financial  capacity  and  the  revised  set  of 
protective  measures  for  financially  weak  participants  (no  more  bank  guarantees, 
blocked  accounts  or  reduced  pre-financing) 
financial  and 
administrative burden from SMEs and are particularly helpful for young start-ups. 
The  introduction  of  thresholds  for  providing  certificates  on  financial  statements 
reduces the administrative burden for financial reporting. In some thematic areas 
under the specific programme "Cooperation" calls with specific topics for projects 

took  some 

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with  obligatory  SME  participation  were  implemented.  As  foreseen  in  the  Small 
Business Act (COM(2008) 394), SMEs participating in an FP7 project keep their 
SME status (and the 75 % funding rate) during the lifetime of the project, even if 
they grow during the project above the thresholds in the SME definition. 

164. 

(European Parliament, § 323) - Observes that the focus of evaluations is placed on 
"input" checks rather than output assessments; shares the Court's view that the proper 
definition  of  specific,  measurable,  achievable,  relevant  and  timed  (SMART) 
objectives  at  the  outset  of  the  project  is  a  key  element  for  the  purposes  of 
determining  its  progress  and  eventual  success;  stresses  that  reporting  requirements 
have to be designed as a purposeful tool for monitoring and assessing progress in the 
integration and material progress and must not be used as a means of sanctioning or 
interfering with the coordinator's other discretionary managerial activities as long as 
they are in line with the legal provisions.  

Commission's response: 

The Commission's research evaluation system addresses issues related to rationale, 
implementation  and  achievements.  In  this  context,  'achievements'  covers  both 
short-term outputs as well as the longer-term impacts of the research activities. 

Concerning  SMART  objectives,  it  is  challenging,  in  particular  given  the 
uncertainty  of  research,  to  ensure  all  objectives  fit  precisely  within  the  strict 
definitions of SMART criteria. 

On the question of project reporting, reporting procedures were revised under FP6, 
and have been further improved for FP7 (e.g. periodic reporting will be simplified; 
interim  questionnaires  have  been  suppressed;  final  reporting  will  become  more 
useful, notably with regard to the collection of data on project implementation and 
results). 

165. 

(European  Parliament,  §  324)  -  Regrets  that  in  most  cases  sustainable  integration 
extending  beyond  the  initial  funding  period  could  not  be  achieved  and  that,  in  the 
Court's assessment, the initial funding period of five years proved to be unrealistic; 
supports  the  proposal  to  apply  highly  competitive  and  selective  criteria  to  the 
prolonged funding of NoEs that claim to be able to achieve self-sustainability.  

Commission's response: 

The  Commission's  view  is  that  some  ‘Networks  of  Excellence’  have  been  less 
successful than others but several NoEs reached self-sustained integration. This is 
normal given the wide range of areas covered, the various participants in dozens of 
different projects, the realities of collaboration in consortia etc. On their side, the 
IPs  were  quite  successful,  for  example,  in  the  areas  of  energy  and  transport 
industrially  led  demonstration  IPs.  Many  projects  have  led  to  market  deployment 
and replication after the successful end of the FP6 contracts. 

166. 

(European  Parliament,  §  325)  -  Notes  with  interest  the  expert  group's  proposal  to 
explore  the  possibility  of  coordinated  calls  between  ERA-NETs  and  the  FP7 
combining  national  and  Community  funds  as  well  as  all  measures  to  enhance  the 

EN 

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transparency and accessibility of the CORDIS database so as to ensure an exchange 
of research results in the ERA (exchange of best practice examples).  

Commission's response: 

Combined ERA-NET and FP7 calls, combining national and community funding, 
exist since 2008, when the new FP7 ERA-NET Plus instrument started being used 
by several networks of European research programme managers and programme 
owners.  A  recent  report  by  independent  experts  examined  the  first  9  such  ERA-
NET  Plus  concluding  that  the  mechanism appears  well suited to  implement joint 
calls  combining  national  and  FP  funding,  e.g.  in  the  framework  of  the  recently 
launched Joint Programming Initiatives. 

Since  this  spring,  the  Netwatch  portal  (http://netwatch.jrc.ec.europa.eu/nw/) 
presents all joint calls currently funded under the ERA-NET scheme, providing a 
transparent  access  for  researchers  to  all  these  calls,  in  addition  to  the  national 
portals  and  web-services.  The  portal  also  presents  a  toolbox  of  best  practices 
developed  by  European  programme  owners  and  managers  in  the  joint  activities 
undertaken  through  ERA-NET  support,  as  identified  and  synthesized  by  the 
action 
supporting 
http://netwatch.jrc.ec.europa.eu/nw/index.cfm/static/eralearn/eralearn.html." 

platform 

learning 

Learn 

ERA 

167. 

(European Parliament, § 326) - Is deeply concerned by the fact that the application 
of the Commission's audit strategy for the FP6 has already resulted in two court cases 
initiated by former participants; stresses that reliability is the basis for any long-term 
cooperation and calls once again on the Commission, with a view to ensuring legal 
certainty, to refrain from recalculating the financial statements of projects under the 
FP6 that it has already approved and settled, by applying new interpretations to the 
eligibility  criteria  for  costs  established  in  the  General  Conditions  (Annex  II)  of  the 
FP6 model contract ; urges the Commission to reinforce its efforts to find a solution, 
in  particular  by  simplifying  the  recovery  procedures  through  the  use  of  appropriate 
flat-rate  procedures  and  taking  into  account  the  good  faith  and  legitimate 
expectations of beneficiaries, and expresses its desire for a solution-based dialogue.  

Commission's response: 

The  Commission  has  devised  a  control  strategy  aimed  to  ensure  the  legality  and 
regularity  of  the  6th  Framework  Programme  on  a  multiannual  basis  for  the 
detection and correction of any errors which could not be identified before making 
the payment. This is achieved by ex-post auditing and thoroughly recovering any 
amount  found  to  be  overpaid  to  the  audited  beneficiaries,  even  for  non-audited 
contracts. 

The re-calculation of the financial statements of projects is a necessary condition 
to correct the detected systematic errors likely to affect non-audited contracts. The 
acceptance  of  this  particular  request  would  therefore  mean  that  amounts 
receivable  would  not  be  recovered.  The  Commission  does  not  apply  new 
interpretations  to  the  eligibility  criteria  for  costs  established  in  the  General 
Conditions (Annex II) of the FP6 model contract. The control system is such that 
the  administrative  burden  for  the  beneficiaries  has  been  lowered  before  payment 
under  the  condition  that  costs  may  be  checked  for  their  eligibility  after  payment. 

EN 

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This  is  done  during  ex-post  audits.  Ex-post  audits  may  therefore  reveal  that  the 
contractor's interpretation of the rules with regard to their eligibility was incorrect, 
but this cannot be considered a new interpretation. 

The  Commission  adopted  on  15  December  2009  a  Communication  on  the 
simplification of recovery process (SEC(2009)1720) that provides the possibility to 
resort  to  a  flat  rate  to  determine  the  outstanding  debts  and  considers  certain 
charges  related  to  personnel  (direct  taxes  and  social  charges)  as  eligible.  This 
Communication confirms the Commission's will to look for solutions. 

Lastly, it is pointed out that it is not the Commission's audit strategy for the FP6 as 
such that has resulted in two Court cases. The initiation of the cases was triggered 
by  the  fact  that  audits  have  identified  ineligible  items  for  which  recovery  orders 
were launched. The fact that this happened with important and large participants 
also worries the Commission. 

It  is  recalled  that,  if  contractors  are  confronted  with  matters  of  eligibility  when 
establishing their cost statements, they can contact the Commission services, which 
are always available to give their view on matters of eligibility before payments are 
made, therewith avoiding any recovery process. 

168. 

(European Parliament, § 327) - Asks  the Commission to find solutions  that  ensure 
reliability and mid-term continuity in the implementation and planning of framework 
programmes,  notably  with  a  view  to  the  FP8,  and,  in  particular,  to  homogeneously 
apply fixed deadlines and firm rules of procedure.  

Commission's response: 

The Commission is committed in ensuring continuity in the implementation of the 
Framework programmes. In this regard, the Commission has already started with 
the  preparation  of  the  next  framework  programme.  As  example,  the  Commission 
Communication  on  Simplification  ("Simplifying  the  Implementation  of  the 
Research  Framework  Programmes"  (COM(2010)0187))  presents  options  for 
profound  changes  of  the  funding  model  towards  a  result-based  approach  using 
individual  lump  sums  for  whole projects. It also proposes a number  of principles 
such as the acceptance of the beneficiaries' accounting methods. 

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Special report No 9/2009 on the efficiency and effectiveness of the personnel selection 
activities carried out by the European Personnel Selection Office 

169. 

(European Parliament, § 328) - The European Parliament encourages the European 
Personnel Selection Office (EPSO) to take into account the Court's recommendations 
in its Development Programme (EDP).  

Commission's response: 

EPSO  has  accepted  all  of  the  Court's  recommendations  in  its  audit  report.  Some 
have already been implemented, the others are about to be introduced. 

170. 

(European Parliament, § 329) - The European Parliament takes the view that EPSO 
and  all  EU  institutions  should  improve  their  communication  to  citizens  about  the 
concept of an impartial European civil service and should enhance the image of the 
EU as an employer.  

Commission's response: 

initiatives, 

including  EPSO's  new  website,  have 

Several 
this 
recommendation.  For  example,  notices  of  competition  have  been  simplified  and 
are published in 23 languages. Their logical structure has been improved to make 
them  easier  to  administer  and  to  improve  the  institutions'  communication  and 
image, given that the notice of competition is often people's first contact with the 
institutions. 

taken  up 

171. 

(European Parliament, § 330) - The European Parliament points out in this context 
that  EPSO  should  also  aim  at  improving  its  communication  with  the  public 
administrations in the Member States in order to exchange best practices in the areas 
of  the  provision  of  information/advertising  to  the  public  and  of  promoting  job 
opportunities  in  a  targeted  manner  so  as  to  bring  them  to  the  attention  of 
professionals;  considers  that  similar  communication  should  be  undertaken  with 
relevant international organisations.  

Commission's response: 

As part of the 'Attractiveness and Diversity' plank of its development programme, 
EPSO  is  taking  a  number  of  steps,  for  example  extra,  targeted  publicity  in  the 
Member States and campaigns to raise awareness among potential candidates. 

172. 

(European  Parliament,  §  331)  -  The  European  Parliament  is  convinced  that 
improving cooperation with universities could be beneficial in the long term by, on 
the  one  hand,  providing  the  EU  institutions  with  desirable  employees  and,  on  the 
other hand, by assisting graduates in enhancing their career options.  

Commission's response: 

EPSO is developing its external communication strategy to include actions that are 
directed  at  raising  the  profile  of  EU  jobs  among  the  various  target  groups,  e.g. 
universities. 

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Competitions  for  administrators  at  grade  AD5  may  be  advertised  as  graduate 
trainee  schemes.  The  manner  of  implementing  this  would  be  developed  in 
conjunction with the Institutions. 

173. 

(European  Parliament,  §  332)  -  The  European  Parliament  encourages  EPSO  to 
continue  its  efforts  to  diagnose  and  prevent  the  geographical  imbalances  amongst 
candidates and subsequently among the laureates.  

Commission's response: 

The  geographical  imbalances  result  essentially  from  factors  outside  EPSO's 
control, such as the economic situation in the Member States, the perception of the 
European Union and relative salary levels. EPSO is well aware of the institutions' 
statutory obligation to recruit their staff from a broad geographical base. Working 
with the institutions, EPSO continuously monitors the geographical composition of 
competitions and takes appropriate measures when the number of candidates from 
a  particular  Member  State  is  felt  to  be  inadequate  in  relation  to  its  population. 
Particular measures include extra, targeted publicity in these Member States and 
campaigns to raise awareness among potential candidates. 

174. 

(European Parliament, § 334) - The European Parliament takes the view that EPSO 
should  improve  the  administration  of  the  laureates'  waiting  lists  by  providing  them 
with information on current vacancies in order to facilitate their final recruitment; at 
the  same  time,  considers  that  efforts  should  be  made  to  reduce  the  time  spent  by 
successful candidates waiting for employment.  

Commission's response: 

In  an effort to  introduce greater  transparency,  EPSO  has  already implemented a 
tool allowing candidates to monitor on-line their status on the reserve list and their 
availability  to  Institutions.  In  addition,  successful  candidates  are  now  being 
advised  as  to  the  sequence  of  events  for  recruitment,  including  timing  and 
practicalities  and  they  receive  a  full  explanation  of  the  flagging  system. 
Discussions  are  ongoing  with  the  Institutions  in  order  to  give  access  to  the 
laureates to certain vacancy notices. 

The timing of their recruitment is the sole responsibility of the Institutions. 

175. 

(European  Parliament,  §  336)  -  The  European  Parliament  calls  on  EPSO  to  avoid 
any ambiguity in competition notices and encourages EPSO to review its procedures 
for verifying compliance with eligibility requirements.  

Commission's response: 

This recommendation has been accepted and has already been implemented. When 
EPSO  was  reorganised  in  April  2008  an  internal  quality  control  function  was 
introduced.  At  the  same  time,  external  quality  control  was  improved  on  EPSO's 
initiative,  both  at  the  level  of  translation  with  DGT  and  in  terms  of  linguistic 
checks with the departments of OPOCE. 

EN 

115 

   EN 

 
176. 

(European Parliament, § 337) - The European Parliament calls on EPSO to improve 
its  appeal  procedures,  e.g.  by  assigning  different  panels  in  the  first  and  second 
instance.  

Commission's response: 

Each  competition  notice  contains  a  separate  section  on  appeal  procedures 
including  the  formalities  to  observe.  There  are  currently  four  possible  levels  of 
appeal:  request  for  review,  compliant  pursuant  to  Article  90  of  the  Staff 
Regulations,  petition  to  the  European  Ombudsman  and  petition  to  the  Court. 
Although  it  is  not  always  possible  to  advise  candidates  on  the  most  appropriate 
means  of  redress  to  challenge  a  decision  of  EPSO  or  the  Selection  Board, 
guidance  is  given  inter  alia  by  highlighting  that  individual  Selection  Board 
decisions based on assessment can only be changed by the Appointing Authority or 
the Civil Service Tribunal in case of a manifest error of appreciation. 

Furthermore, EPSO introduced in 2009 an internal review mechanism seeking to 
advise  Selection  Boards  in  the  best  possible  way  to  deal  with  problematic  issues 
including  better  ways  of  communicating  decisions  to  candidates  and  thus 
preventing a large number of complaints. 

As an EU inter-institutional office EPSO is obliged to give effect to each ruling of 
the EU Courts by executing the measures imposed by the Courts. 

177. 

(European Parliament, § 338) - The European Parliament notes that there are several 
cases  pending  against  EPSO  before  the  Civil  Service  Tribunal  in  connection  with 
failures in the selection procedure (in particular on the issue of languages); takes the 
view that, once these cases are concluded, they should provide lessons to be learned 
and should be incorporated into the EDP by EPSO.  

Commission's response: 

As an EU inter-institutional office EPSO is obliged to give effect to each ruling of 
the  EU  Courts  by  executing  the  measures  imposed  by  the  Courts.  In  addition, 
EPSO has always changed its practices where general problems were identified by 
the  Civil  Service  Tribunal.  Further  to  one  ruling  of  the  CST  in  2008,  EPSO 
introduced new evaluation grids of written and oral tests that are communicated to 
candidates at their request since early 2009. 

EN 

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Special report No 10/2009 on information provision and promotion measures for 
agricultural products 

178. 

(European  Parliament,  §  340)  -  Urges  the  Commission  to  specify  the  policy 
objectives,  bearing  in  mind  the  need  for  consistency  between  stated  ambitions  and 
the committed budget, and to express these objectives in a SMART way, as well as 
to define and monitor suitable performance indicators;  

Commission's response: 

The Commission is taking the requested action.  

Though  the  Commission  considers  that  the  four  objectives  as  set  out  in  Council 
Regulation  (EC)  No  3/2008,  as  well  as  the  specific  objectives  for  the  internal 
market  for  each  of  the  various  products  laid  down  in  Annex  I  of  Commission 
Regulation (EC) No 501/2008 are already "SMART," it will certainly continue to 
further develop the objectives of the policy. 

To  this  end,  the  Commission  has  already  set  up  an  Advisory  Committee  on 
Promotion with the aim of defining an overall strategy of and to better complement 
the various existing promotion measures.  The input of this advisory  committee is 
feeding  the  reflections  on  the  strategy  for  the  promotion  policy  for  agricultural 
products  which  will  be  an  important  element  of  the  Commission  Communication 
on the future of the CAP to be adopted in November 2010. 

179. 

(European  Parliament,  §  341)  -  Calls  on  the  Commission  to  continue  the 
improvements  to  the  selection  procedure,  in  particular  by  maintaining  the 
requirement  to  include  in  proposals  information  concerning  the  expected  impact  of 
the measures in question and on the manner in which that impact will be gauged;  

Commission's response: 

The requested action has been taken. 

The Commission has continued to improve the selection procedure by putting the 
emphasis on good evaluation methodology in each programme. A revised version 
of document AGRI/63454/2007 has been prepared by the Commission services and 
is for the sake of clarity and precision subdivided in two parts specifically intended 
for the preparation of programmes and their posterior evaluation. 

EN 

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Special report No 11/2009 on the sustainability and the Commission's management of 
the LIFE-Nature projects 

180. 

(European Parliament, § 345) - Invites the Commission to review its selection model 
in order to prioritise LIFE-Nature project proposals which can provide an assurance 
as to the continuity of results;  

Commission's response: 

When selecting LIFE-Nature proposals, the Commission does prioritise proposals 
which can give assurance as to the continuity of results (i.e. this is one of the main 
criteria considered, though not the only one). The Commission has taken steps to 
make  the  sustainability  criterion  more  visible  for  the  Nature  and  Biodiversity 
component. Relevant text has been added to both  the Application Guidelines and 
the Evaluation Guide. 

181. 

(European  Parliament,  §  345)  -  Suggests  to  the  Commission  that  it  consider 
separating the management of the ‘Nature’ and ‘Environment’ strands;  

Commission's response: 

The  management  of  the  Nature  and  Environment  strands  of  the  LIFE+ 
programme is now done by separate units. 

182. 

(European Parliament, § 346) - Urges the Commission to cooperate closely with the 
European  Environmental  Agency  and  the  European  Topic  Centre  on  Biological 
Diversity  in  defining  the  appropriate  criteria  and  indicators  for  the  selection  of 
proposals as regards their sustainability as well as to take the necessary initiatives to 
improve  project  monitoring  in  respect  of  the  results  achieved,  and  to  develop 
appropriate indicators and criteria for monitoring project outcomes;  

Commission's response: 

The  Commission  has  already  developed  indicators  for  all  projects  selected.  The 
indicators  for  LIFE  Nature  &  Biodiversity  projects  are  quite  robust.  They  are 
currently being analysed for the first two years of LIFE+. The Commission is also 
studying the possibility of including these indicators in its main database (Butler) 
so  as  to  complete  the  existing  set  of  data  already  available  for  all  LIFE  Nature 
projects since 1992. Further developments may be planned for the long term, but 
no additional short-term action is currently foreseen. 

183. 

(European Parliament, § 347) - Invites the Commission to review its communication 
strategy, paying particular attention to the dissemination of relevant information and 
lessons  learned,  and  to  ensure  that  beneficiaries  are  required  to  provide  more 
technical  details  concerning  the  methods  used,  lessons  learned  and  best  practices 
identified;  

EN 

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Commission's response: 

The  Commission  welcomes  the  Court's  recommendations  on  disseminating  more 
technical  information  and  lessons  learned,  noting  that  it  has  significantly 
improved its communication strategy in the past and will continue to do so, inter 
alia by making more information available on the LIFE Programme website, and 
by organising thematic workshops and EU-wide meetings to promote exchange of 
experience. 

184. 

(European  Parliament,  §  349)  -  Calls  on  the  Commission  to  introduce  a  follow-up 
scheme  for  post-LIFE  funding  in  order  to  assess  the  effectiveness  of  the  projects 
financed and to ensure the sustainability impact of the EU funding after the closure 
of the projects;  

Commission's response: 

The Commission has set up a mechanism for carrying out more systematic ex-post 
visits  to  projects  since  2009.  The  Commission  is  currently  reviewing  this 
mechanism  in  order  to  strengthen  it  and  has  increased  the  number  of  ex-post 
missions (to around 26 ex-post visits in a 12-month period). 

185. 

(European  Parliament,  §  350)  -  Calls  on  the  Commission  to  develop  appropriate 
measures  to  resolve  the  existing  legal  issues  and  implementation  constraints 
regarding the long-term follow-up of the projects;  

Commission's response: 

The  Commission,  as  agreed,  has  investigated  the  possibility,  legality  and 
opportunity  of  establishing  post-contractual  obligations  for  the  “after-LIFE 
funding”,  going  beyond  the  existing  ones,  to  include  legal  obligations  on 
beneficiaries  to  maintain  project  results  beyond  the  closure  of  the  project.  The 
conclusions  are  negative  and  the  Commission  deems  it  is  not  feasible,  opportune 
nor cost-effective to modify the grant agreement to include such post-contractual 
obligations. 

The  Commission  will  concentrate  its  efforts  on  securing  the  long  term 
sustainability of project results by way of using the tools presently available and by 
developing  additional  tools  as  agreed  in  response  to  the  other  recommendations 
formulated by the Court of Auditors in its report. 

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Special report No 12/2009 on the effectiveness of the Commission's projects in the area 
of Justice and Home Affairs for the western Balkans 

186. 

(European  Parliament,  §  352)  -  Recalls  that  the  Commission  ensures  the 
management of projects in the field of justice and home affairs in a difficult political 
and  institutional  environment;  taking  into  consideration  the  Court's  conclusions 
showing  that  the  investment  projects  were  more  successful  than  the  institution-
building  projects,  expects  from  the  Commission  a  significant  strengthening  of  the 
link  between  projects  aimed  at  the  reinforcement  of  institutional  capacities  and 
investment projects in the region concerned;  

Commission's response: 

The  Commission  generally  combines  equipment  and  infrastructure  investment 
institution-  and  capacity-building.  The  provision  of  equipment  and 
with 
infrastructure is combined with support for training and organisational reforms. 

Within  this  context,  the  history  of  implementation  of  several  Institution  Building 
projects shows that the Commission has repeatedly and steadily attempted to exert 
a positive influence in order to foster the sustainability of the projects. 

187. 

(European Parliament, § 353) - Agrees with the Court that the appropriation of local 
actions and projects represents a determining factor for success in strengthening the 
rule of law, and also considers that the lack of commitment and ownership at local 
level  weakens  the  sustainability  of  the  projects;  calls  on  the  Commission  to  ensure 
that  the  assistance  provided  is  accompanied  by  a  strong  will  on  the  part  of  the 
beneficiaries  actively  to  encourage  the  institutional  reforms  and  to  increase  the 
involvement of the beneficiaries in the projects;  

Commission's response: 

The Commission has learned from past experiences and now acts according to a 
formalised  approach  which  sees  the  beneficiary  in  the  driving  seat  of  the 
assistance  process,  taking  full  responsibility  for  the  anticipated  objectives, 
methodologies and results. 

Further enhancement of the projects' ownership by the beneficiaries is a priority 
under IPA. 

188. 

(European Parliament, § 354) - Considers, like the Court, that EU aid in the Western 
Balkans is generally effective, but that real risks exist regarding the sustainability of 
projects;  notes  with  satisfaction  that  the  sustainability  and  ownership  of  projects 
should  improve  under  the  IPA  programme  due  to  project  conditionalities  and  co-
financing by the beneficiaries; is of the opinion that maintenance plans would further 
increase the durability of projects, and asks the Commission to consider introducing 
them as a prerequisite for obtaining EU financial support;  

EN 

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Commission's response: 

Beneficiaries  are  now  involved  in  the  procurement  process  from  project 
preparation to the evaluation of bids (where a representative of the beneficiary is 
always present as a voting member). 

Since  the  2007  programme,  in  order  to  enhance  sustainability  and  ownership  of 
projects,  IPA  project  fiches  include  specific  conditionality  on  infrastructure 
maintenance. 

189. 

(European Parliament, § 355) - Expects the Commission to ensure scrupulously that 
interventions related to infrastructure in the field of the integrated management of the 
borders are now designed and implemented in such a way as to encourage regional 
cooperation;  

Commission's response: 

The  Commission  considers  that  a  joint  border  crossing  point  can  enhance 
cooperation  between  the  two  countries  concerned,  and  as  such  fits  within  the 
global approach related to bilateral cooperation at the border. 

190. 

(European Parliament, § 356) - Calls on the Commission to do its utmost to ensure 
better  cooperation  between  the  various  donors  on  the  spot  and  more  efficient 
coordination of their actions;  

Commission's response: 

In endeavouring to coordinate donors, the Commission maintains regular contacts 
for  policy  and  financial  assistance  coordination  with  the  Council  of  Europe,  the 
Venice Commission, UN High Commissioner for Refugees, International Office of 
Migration,  International  Criminal  Tribunal  for  the  former  Yugoslavia,  and 
bilateral donors. Meetings are held regularly between the EC delegations and the 
Member  States'  Embassies  for  coordinating  their  bilateral  financial  assistance 
with  that  of  the  Community.  The  Commission  organised  conferences  in  autumn 
2008  and  in  April  2009  with  the  main  donors,  aimed  at  improving  donor 
coordination methodologies. The last conference held in October 2009 has mainly 
focused on the practical aspects of coordination on the ground.  

Moreover, on the ground, the Regional Cooperation Council took over during the 
first  half  of  2008  the  role  of  the  former  Stability  Pact  as  facilitator  of  regional 
donor  cooperation  in  the  JHA  area  and  is  organising  conferences  to  this  end. 
Donor cooperation meetings are also organised through regional initiatives. 

191. 

(European Parliament, § 357) - Considers that the visibility of the EU as the largest 
donor  in  the  region  needs  to  be  significantly  improved  so  as  to  match  its  share  of 
contributions; awaits a proposal from the Commission in that regard;  

Commission's response: 

Article  51  of  the  IPA  implementing  regulation  provides  about  the  information 
concerning the assistance related to the IPA regulation. 

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   EN 

 
Implementation  shall  be  the  responsibility  of  the  final  beneficiaries  and  shall  be 
funded  from  the  amount  allocated  to  the  relevant  programmes  or  operations,  in 
accordance with an agreement to be made prior to the start of implementation. 

The  Commission  has  also  enhanced  its  information  and  communication  effort 
concerning  the  use  of  IPA  funds,  addressing  the  public  in  both  the  EU  and  the 
enlargement  countries.  IPA  assistance  is  extensively  covered  on  the  enlargement 
website on Europa, including reader-friendly factsheets on the most representative 
projects. The outreach of the website was enhanced, notably thanks to greater use 
of  multilingualism.  Overall,  in  2009,  120,000  hits  were  registered  for  the 
Enlargement on Europa site. The Commission also developed material for use in 
public events such as a popular general brochure on IPA, roll-ups on IPA, as well 
as  specific  printed  factsheets  on  country  specific  themes  or  on  cross-cutting 
instruments such as the Western Balkans Investment Framework or the European 
Fund  for  South-East  Europe.  The  Commission  also  organised  visibility  events 
about  the  EU's  pre-accession  assistance,  notably  the  conference  "The  Western 
Balkans  -  overcoming  the  economic  crisis"  in  December  2009  with  the 
participation  of  several  ministers  and  top  IFI  executives.  Each  of  these  events 
included media relations and gave rise to numerous reports by journalists. 

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Special report No 13/2009 on delegating implementing tasks to executive agencies: a 
successful option? 

192. 

(European  Parliament,  §  359)  -  The  European  Parliament  regrets  that  according to 
the audit the Commission's control over the agencies’ activities is not fully effective, 
and  stresses  the  need  to  develop  new  indicators  enabling  the  measurement  of  the 
Agencies' performance by the supervisory DGs to be enhanced.  

Commission's response: 

The  Commission  sees  its  supervision  responsibility  as  a  broader  task  which  it 
fulfils with due diligence. The combination of numerous and regular management 
and  supervising  mechanisms,  including  the  Steering  Boards  of  the  executive 
agencies composed of high ranking Commission officials, the appointment of the 
Directors  and  the  management  staff  by  the  Commission,  as  well  as  the  detailed 
reporting  requirements  allow  the  supervisory  DGs  to  closely  monitor  the 
performance  of  the  Agencies.  A  revision  of  the  number  of  indicators  and  the 
development  of  new  indicators  should  allow  the  supervisory  DGs  to  improve  the 
performance measurement of the Agencies. 

Guidelines  on  performance  indicators,  including  a  number  of  key  performance 
indicators,  were  given  to  parent  DGs  and  agencies  in  March  2010.  The 
Commission expects these guidelines to be applied in the 2011 work programmes 
of the agencies. 

193. 

(European Parliament, § 363) - The European Parliament requests the Commission 
to  provide  information  on  the  different  contractual  time  periods  applicable  for  the 
different contractual tasks and the duration of the different contractual employments 
in the executive agencies.  

Commission's response: 

The Commission  will prepare the information as requested and transmit it to the 
CONT  Committee  before  the  end  of  2010,  together  with  the  information  on  staff 
numbers. 

194. 

(European Parliament, § 364) - The European Parliament requests the Commission 
to  take  measures  to  improve  and  simplify  the  recruitment  of  the  agencies’  staff; 
moreover,  requests  the  Commission  to  take  the  specific  recruitment  needs  of  the 
executive agencies into consideration.  

Commission's response: 

The simplification of the recruitment process introduced in the framework of the 
EPSO Development Programme will apply to institutions and agencies alike. 

195. 

(European  Parliament,  §  365  (1st  part))  -  The  European  Parliament  requests  the 
Commission  to  present  detailed  information  on  the  number  of  contract  staff 
employed  in  the  executive  agencies  and  the  tasks  assigned  to  them  and  the  salary 

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levels  corresponding  thereto,  as  well  as  an  overview  on  how  much  experience  is 
required for each employment grade.  

Commission's response: 

The information will be sent to the CONT Committee before the end of 2010. 

196. 

(European  Parliament,  §  365  (2nd  part))  -  The  European  Parliament  requests  the 
Commission  to  present  information  on  the  different  cases  in  which  suitable  staff 
could not be rapidly found and on how much delay occurred in the staff recruitment, 
as well as an analysis of the reasons for the delay.  

Commission's response: 

Delays in recruitment of contract agents are due to the creation of this category of 
staff  as  of  01/05/2004,  precisely  at  the  time  when  the  first  executive  agency  was 
created. These delays were also encountered by Commission services. There is no 
particular additional delay from the perspective of executive agencies (other than 
those relating to either massive recruitment at start-up phase or needs for specific 
profiles. 

With regard to the duration of filling the Directors' posts, the Commission would 
like  to  recall  that  there  are  only  few  Directors'  posts  and  recruitment  of  senior 
managers is a delicate process. 

As of today, the delays are back to normal. 

197. 

(European  Parliament,  §  366  (1st  part))  -  The  European  Parliament  invites  the 
Commission to collect and use reliable data on workload and productivity related to 
the delegation of tasks with a view to carrying out an impact assessment, both before 
and after externalisation.  

Commission's response: 

The Commission acknowledges that initial CBAs and financial statements did not 
always  provide  all  possible  workload  and  productivity 
indicators  before 
externalisation and for the triennial evaluation pursuant to Article 25 of Council 
Regulation 58/2003. Improvements have been made in the more recent CBAs, and 
the Commission will in the future go deeper into the assessment of workload and 
productivity.  This  will  of  course  only  be  possible  to  verify  the  next  time  a  task  is 
delegated to an executive agency. 

198. 

(European  Parliament,  §  366  (2nd  part))  -  The  European  Parliament  invites  the 
Commission  to  identify  the  success  factors  and  conclusions  which  led  to  better 
results at the executive agencies and to apply the lessons learned to all programmes 
which continue to be managed by the Commission services.  

Commission's response: 

The  success  of  the  executive  agencies  lies  in  their  capacity  to  recruit  extensively 
contractual agents (up to 75%) with contracts of much longer duration than in the 

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Commission;  to  target  their  recruitment  to  specific  skills;  and  to  specialise  on 
recurrent  executive  tasks.  These  advantages  are  inherent  to  the  concept  of  the 
executive  agencies  and  can  therefore  not  be  reproduced  within  the  Commission. 
Firstly, the Commission has to maintain the overall current balance of staff which 
includes  predominantly  permanent  officials  and  may  only  employ  contractual 
agents for maximum of 3 years. Secondly, in order for the Commission to focus on 
its  strategic  and  policy  tasks  as  an  institution,  the  recruitment  profile  (more 
"generalist") has to be different from that of the executive agencies. 

199. 

(European  Parliament,  §  366  (3rd  part))  -  The  European  Parliament  invites  the 
Commission  to  improve  the  supervision  of  the  agencies  by  setting  results-oriented 
and targeted objectives, using a limited number of relevant performance indicators, 
which should form the basis for objectives in respect of coming years.  

Commission's response: 

The  Commission  sees  its  supervision  responsibility  as  a  broader  task  which  it 
fulfils  with  due  diligence.  The  combination  of  regular  formal  meetings  and  the 
detailed  reporting  requirements  allow  the  supervisory  DGs  to  closely  monitor  the 
performance  of  the  Agencies.  A  revision  of  the  number  of  indicators  and  the 
development  of  new  indicators  should  allow  the  supervisory  DGs  to  improve  the 
performance measurement of the Agencies. 

As  regards  timing,  the  adoption  of  the  Executive  Agencies'  Annual  Work 
Programmes should be speeded up through earlier adoption of the DGs' Financing 
Decisions.  Instructions  to  this  effect,  as  well  as  on  the  content  of  agency  Work 
Programmes, were given to parent DGs and agencies in March 2010. At the same 
time, instructions were also given on performance indicators and a number of key 
performance indicators were defined for further use by parent DGs and agencies. 
The  Commission  expects  these  guidelines  to  be  applied  in  the  2011  work 
programmes of the agencies. 

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Special report No 14/2009 entitled "Have the management instruments applied to the 
market in milk and milk products achieved their main objectives?" 

200. 

(European  Parliament,  §  367)  -  Expects  the  Commission,  in  view  of  the  massive 
fluctuations and disparities on the world market, to take effective precautionary and 
compensatory  measures  to  strengthen  small  and  medium-sized  businesses  and  to 
promote  security  of  food  supply  through  a  wide  range  of  businesses  within  the 
European Union;  

Commission's response: 

The Commission is taking the requested action. 

The  Commission  has  taken  all  the  necessary  measures  in  the  framework  of  the 
2009  dairy  crisis,  such  as  the  prolongation  of  the  buying  in  period  for  the 
intervention of butter and skimmed milk powder, the prolongation of the period in 
which  private  storage  aid  is  applicable  for  butter,  and  the  temporarily  re-
introduction of export refunds. 

Moreover, the High Level Group on Milk has finalised its report on 15 June 2010 
with seven recommendations on contractual relations between milk producers and 
milk  processors;  collective  bargaining  power  of  producers;  the  possible  role  of 
inter-branch  organisations  in  the  dairy  sector;  transparency  in  the  dairy  supply 
chain;  market  measures  and  futures;  marketing  standards  and  origin  labelling; 
innovation and research. A copy of the report has been sent to the Council and the 
Agriculture Committee of the European Parliament. The Council will discuss the 
recommendations  in  July  and  the  Commission  is  expected  to  put  forward 
legislative proposals before the end of the year, considering medium to long term 
measures  that  address  the  lessons  learned  from  last  year's  crisis,  with  a  view  to 
better structuring the sector as a whole. 

201. 

(European Parliament, § 369) - Points out that the Commission should give a high 
priority to fair competition on the world market without dumping, so as to counteract 
the disadvantaging and financial annihilation of businesses by sudden fluctuations in 
world trade;  

Commission's response: 

The requested action has been taken. 

One of the goals of the revision of the CAP was to improve competitiveness of the 
agricultural sector while keeping a safety-net at a low level which is only triggered 
in  exceptional  circumstances  and  no  longer  represent  a  structural  outlet  for 
farmers.  This  contributed  to  ensure  market  stability  and  fair  competition  on 
commodity  markets.  As  a  consequence,  it  is  not  justified  to  associate  the 
Commission's actions with any type of "dumping" and "sudden fluctuations in the 
world markets" as shown by the extremely restricted and targeted use of our export 
support mechanisms. 

EN 

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202. 

(European  Parliament,  §  369)  -  Calls  for  the  funding  of  appropriate  marketing 
measures and market research studies in countries outside Europe, and points out that 
agricultural structures or their creation in developing countries must not be destroyed 
by the export of agricultural goods and accompanying market measures;  

Commission's response: 

The requested action has been taken. 

Milk  products  already  benefit  from  the  information  and  promotion  measures 
intended  for  third  countries  laid  down  by  Council  Regulation  3/2008  and 
Commission Regulation 501/2008. Studies of new third country markets, necessary 
for the expansion of the market outlet are specifically covered by this policy. 

The  EU  has  come  a  long  way  in  making  its  Common  Agricultural  Policy  (CAP) 
more  development  friendly.  Export  subsidies  and  domestic  trade-distorting 
subsidies  have  been  reduced  drastically  through  the  successive  CAP  reforms.  In 
the  case  of  milk,  export  subsidies  have  not  been  activated  since  November  2009. 
The  EU  has  taken  commitments  under  the  Policy  Coherence  for  Development  to 
increase synergies between its development policy and other EU policies, including 
CAP. 

203. 

(European  Parliament,  §  370)  -  Agrees  with  the  Court  that  there  is  a  need  for 
continuing  supervision  of  the  development  of  the  milk  market,  and  calls  for  the 
Court’s  recommendations 
inappropriate 
to  be  acted  on,  so  as 
developments  as  they  arise  and  counteract  them  with  suitable  measures  at  an  early 
stage;  

identify 

to 

Commission's response: 

The Commission is taking the requested action. 

The  Commission  has  continuously  closely  monitored  the  developments  in  the 
sector  and  will  continue  to  do  so  in  the  future.  As  agreed  in  the  context  of  the 
Health Check, market reports on the diary sector will be submitted to Parliament 
and the Council in December 2010 and 2012. The High Level Group on Milk has 
finalised  its  report  on  15  June  2010  with  seven  recommendations  on  contractual 
relations between milk producers and milk processors; collective bargaining power 
of  producers;  the  possible  role  of  inter-branch  organisations  in  the  dairy  sector; 
transparency in the dairy supply chain;  market measures and futures; marketing 
standards and origin labelling; innovation and research. A copy of the report has 
been  sent  to  the  Council  and  the  Agriculture  Committee  of  the  European 
Parliament.  The  Commission  is  expected  to  put  forward  legislative  proposals 
before the end of the year, considering medium to long term measures that address 
the  lessons  learned  from  last  year's  crisis,  with  a  view  to  better  structuring  the 
sector as a whole. 

EN 

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Special report No 16/2009 on the European Commission’s management of pre-accession 
assistance to Turkey 

204. 

(European Parliament, § 376) - Underlines the Court’s call for a robust methodology 
with which to determine the strategic objectives for which EU financial assistance is 
most  needed;  considers  that  the  designated  measures  for  achieving  each  strategic 
objective  need  to  be  clearly  defined;  requests  the  Commission  to  ensure  that  the 
various  project  proposals  include  specific,  quantifiable,  realistic  and  relevant 
objectives so that their contribution demonstrably achieves strategic objectives;  

Commission's response: 

During  the  ongoing  revision  of  the  Multiannual  Indicative  Programming 
Document  (MIPD)  2011-2013,  the  Commission  has  taken  measures  in  order  to 
better  define  strategic  objectives  for  EU  financial  assistance,  for  example  by 
focussing assistance on certain key sectors. Moreover, in the annual programming 
exercise  for  the  national  programmes,  the  Commission  now  insists  on  coherent 
project  intervention  logic,  which  includes  specific,  quantifiable,  realistic  and 
relevant  objectives,  results  and  indicators  as  a  condition  for  the  financing  of 
projects. 

205. 

(European Parliament, § 377) - Criticises the fact that pre-accession assistance funds 
were allocated to Turkey despite the fact that there were missing indicators and that 
progress towards fulfilment of the accession criteria could not be measured; therefore 
calls  for  funds  to  be  concentrated  on  projects  which  are  relevant  to  accession, 
actually measurable and capable of being implemented;  

Commission's response: 

Since the introduction of the new Instrument for Pre-Accession (IPA) in 2007, the 
Commission  has  brought  under  way  measures  to  improve  the  programming  of 
funds, which was confirmed by the Court. As of IPA 2010, further measures were 
taken to improve project relevance, to include more measurable indicators and to 
insist  on  the  readiness  for  implementation  of  projects  selected  for  financing. 
During  the  ongoing  revision  of  the  Multiannual  Indicative  Planning  Document 
(MIPD)  and  in  future  programming,  the  Commission  will  take  further  steps  to 
improve the programming of funds. 

206. 

(European  Parliament,  §  378)  -  Points  out  that,  even  though  the  Commission  has 
introduced  measures  aimed  at  addressing  many  of  the  weaknesses  in  the 
Decentralised Implementation System, in particular since the introduction of the new 
Instrument for Pre-Accession Assistance (IPA 2007-2013), the Commission still has 
to  address  the  remaining  weaknesses  in  overall  programming  and  performance 
management, as recommended by the Court; also expects the Commission to make 
the  Turkish  authorities  aware  of  this  fact  so  that  project  proposals  are  drawn  up 
which would allow the strategic objectives relating to the financing of the European 
Union  to  be  achieved  within  a  realistic  timescale;  considers  that  the  Commission 
should undertake new initiatives in order to improve the design and implementation 
of  the  projects  by  the  institutions  of  the  Decentralised  Implementation  System 

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(measures  such  as  compulsory  needs  assessments  and  better  scheduling  of 
contracting arrangements);  

Commission's response: 

The  Commission  has  held  intensive  discussions  with  the  Turkish  authorities  to 
improve the quality and readiness of project proposals drawn up. Following a Joint 
Monitoring  Committee  in  June  2010,  the  Commission  has  also  issued  additional 
recommendations on how to improve the implementation and monitoring of funds 
under  the  Decentralised  Implementation  System  (letter  of  Michael  Leigh  of  2 
August 2010). The Commission expects the performance to improve further, ones 
these recommendations are taken on board. 

207. 

(European  Parliament,  §  379)  -  Given  the  inability  to  measure  progress  towards 
accession  goals;  asks  the  Commission  to  carry  out  a  more  precise  analysis  of  the 
goals and the efficiency of the Instrument for Pre-Accession Assistance, based on the 
remarks of the Court of Auditors, and to present this by 15 September 2010;  

Commission's response: 

The Commission will provide the requested information as part of the Annual IPA 
report  for  Turkey,  which  is  to  be  presented  in  autumn  2010.  As  agreed  with  the 
Parliament, the delay for the requested presentation of the analysis was postponed 
until 15 October 2010. 

208. 

(European  Parliament,  §  380)  -  Recalls  the  importance  of  an  evaluation  by  the 
Commission of the entirety of the programme for pre-accession assistance to Turkey;  

Commission's response: 

is  currently  completing  a  Country  Programme  Interim 
The  Commission 
Evaluation  for  Turkey  which  covers  the  2005-2008  programmes.  Further 
evaluations will be planned in the future. 

EN 

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European Development Funds 

209. 

(European  Parliament,  EDF  §1)  -  Welcomes  the  implementation  of  the  Lisbon 
Treaty, particularly the creation of the office of High Representative of the Union for 
Foreign Affairs and Security Policy and the creation of the European External Action 
Service  (EEAS);  is  concerned  that  the  effectiveness  of  European  development  aid 
could be hindered by the fragmented way in which it is managed, and points out that 
improvements aimed at better management of the EDFs must be maintained and not 
be blocked; calls on the Commission to give it a description and detailed explanation 
of the operation of the new system.  

Commission's response: 

It  is  the  intention  of  the  Commission  to  ensure  that  the  current  level  of 
management of the EDFs will at least continue. 

The Commission has laid down a proposed governance system for the EEAS. This 
can be found in the proposed Regulation of the European Parliament and of the 
Council  amending  Council  Regulation  (EC,  Euratom)  No  1605/2002  on  the 
Financial  Regulation  applicable  to  the  general  budget  of  the  European 
Communities,  as  regards  the  European  External  Action  Service  (SEC(2010)  257 
COM(2010)85 final of 24/03/2010). 

The  description  of  the  management  and  control  system  of  the  EEAS  will  be 
submitted to Parliament in due course. 

210. 

(European  Parliament,  EDF  §  2  &  41)  -  Recalls  and  supports  the  Commission’s 
undertaking that it will fully incorporate the EDF into the budget during discussions 
on  the  next  financial  framework;  repeats  its  request  to  the  Commission  to  keep  its 
Committee  on  Budgetary  Control  fully  informed  concerning  the  preparation  of  this 
initiative; takes the view that incorporation of the EDF into the general budget of the 
European Union would make it possible to enhance the coherence, transparency and 
effectiveness of the EDF and to strengthen its oversight system;  

Commission's response: 

The Commission expects to resubmit the proposal for post 10th EDF budgetisation 
in  the  framework  of  the  preparation  of  the  new  legislative  proposals  within 
external actions field for the next multi-annual financial framework. 

The  Commission  will  keep  the  European  Parliament  informed  as  regards  the 
preparation of this initiative. 

211. 

(European  Parliament,  EDF  §  3)  -  Asks  to  be  kept  informed  concerning  the  mid-
term  review  due  to  be  held  for  the  Tenth  EDF  in  2010  and  urges  that  the  joint 
programming  should  be  adequately  strengthened  to  obtain  a  greater  concentration 
and better coordination and division of work; takes the view that the implementation 
strategy  for  the  Tenth  EDF  should  focus  on  a  limited  number  of  areas,  without 
excluding  non-governmental  organisations  (NGOs)  that  are  effective  at  local  level 
and  are  of  crucial  importance  for  sustainable  development,  in  order  to  avoid  the 

EN 

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harmful effects arising from a proliferation of objectives; in this connection, calls on 
the Commission to verify whether management by the respective NGOs in the field 
is in fact more efficient and cost-effective than management by the Commission.  

Commission's response: 

The MTR of the 10th EDF national programming is being finalised internally to 
the  Commission.  The  results  in  terms  of  performance  of  the  ACP  countries 
concerned  will  be  communicated  to  the  relevant  stakeholders,  including  the 
competent  commission  within  the  EP  and  the  JPA,  before  the  end  of  2010.  The 
MTR  is  resulted  in  a  limited  adjustment  of  country  strategies,  showing  that 
strategies decided in 2007 are still relevant. 

As regards the progress towards a better concentration of aid (in line with the Code 
of  Conduct  on  Division  of  Labour  (DoL)  adopted  in  May  2007),  the  MTR 
assessment  results  show  that  DoL  amongst  EU  donors  is  progressing  slowly 
(meaning  for  instance  withdrawal  from  a  certain  sector  or  arrangements  for 
delegated  cooperation  with  another  donor).  Looking  at  ACP  countries  which  are 
part of the EU Fast Track Initiative on DoL (18 in total), progress has been made 
in  half  of  them  (Burkina  Faso,  Ethiopia,  Ghana,  Mozambique,  Senegal,  Sierra 
Leone, Tanzania, Uganda, and Zambia). Slow progress was a cause of concern for 
the European Commission and the Member States. As a result the Council adopted 
in  November  2009  an  EU  Operational  Framework  on  Aid  Effectiveness  where  a 
number  of  concrete  actions  are  listed  to  accelerate  the  Fast  Track  Initiative  on 
DoL. For instance, in-country situation is now regularly assessed by the group of 
Member  States Directors-General for Development in order to support and guide 
the process at local level. 

In this context, the Commission believes that, indeed, joint programming should be 
reviewed and strengthened to obtain a greater concentration and division of work. 

The Commission agrees with the key role that the NGOs can play at local level in 
sustainable  development,  but  at  this  stage  it  can  not  verify  the  good  practices  in 
their management. 

212. 

(European  Parliament,  EDF  §4)  -  Repeats  its  invitation  to  the  Commission,  when 
fine-tuning its control strategy, to identify the point at which lack of results and the 
costs  of  control  call  for  a  policy  change;  in  this  connection  looks  forward  to 
receiving the Commission report on the results of the tolerable risk/cost effectiveness 
studies on external action and the review of the EuropeAid control strategy, in good 
time for the 2009 discharge procedure.  

Commission's response: 

EuropeAid will continue to improve its supervisory and control systems with regard 
to the requests and recommendations issued by the Parliament and the Court. The 
Commission is presently studying the implementation of a Tolerable risk of error 
for external aid and will present a proposal in the beginning of 2011. 

213. 

(European  Parliament,  EDF  §  5)  -  Notes  that  the  Court  of  Auditors,  with  the 
exception of the Commission’s method of estimating the provision for costs incurred, 

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takes the view that the accounts reliably reflect the revenue and expenditure relating 
to the Seventh, Eighth, Ninth and Tenth EDFs; encourages the Commission to refine 
its method in the next few months for the discharge in respect of the financial year 
2009.  

Commission's response: 

The Commission has refined its method of estimating the provision for invoices to 
be  received.  The  Court’s  audit  2009  confirmed  the  correct  application  of  this 
method  and  found  the  amount  of  the  accrued  charges  disclosed  in  the  financial 
statements to be free from material error. 

214. 

(European Parliament, EDF §§ 7-8) - Deplores and finds unacceptable the fact that 
the Court of Auditors was not able to obtain all the information and documentation 
concerning 10 sampled payments to international organisations and that consequently 
it  is  not  able  to  express  an  opinion  on  the  regularity  of  expenditure  amounting  to 
EUR 190 000 000, i.e. 6,7 % of the annual expenditure;  

Calls  on  the  Commission  to  take  a  sufficiently  firm  line  with  international 
organisations and draw up an ad hoc calendar ensuring that requests for information 
will be dealt with on time, so as to support the requests of the Court of Auditors for 
information/documentation  and  to  ensure  that  the  financial  and  administrative 
framework agreement (FAFA) is respected.  

Commission's response: 

The  Commission  has  firmly  reminded  the  international  organisations  concerned 
about  the  necessity  to  respond  on  time  to  the  requests  emanating  from  the 
European  Court  of  Auditors.  A  good  example  of  timely  cooperation  between  the 
Court  and  international  organisations  is  the  joint  mission  organised  between  the 
Court and the UN panel of external auditors to IAEA. The mission was organised 
at the request of the Court. 

215. 

(European  Parliament,  EDF  §  10)  -  Welcomes  the  speedy  implementation  of  the 
Tenth  EDF  and  the  Commission’s  generally  good  performance,  as  regards 
commitments  and  payments  and  the  management  of  outstanding  commitments; 
encourages  the  Commission  to  continue  its  efforts  with  regard  to  old  and  dormant 
outstanding commitments.  

Commission's response: 

The Commission has put in place a monitoring system in order to follow old and 
dormant commitments and close these projects as soon as it is possible. A special 
action concerning 8th EDF projects has also been launched. 

216. 

(European  Parliament,  EDF  §  15)  -  Welcomes  the  record  levels  of  commitments 
which  were  reached  in  2008  and  the  timely  implementation  of  the  Tenth  EDF; 
stresses  that  speeding  up  implementation  should  not  come  at  the  expense  of  the 
quality of funded operations.  

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Commission's response: 

Together  with  a  quick  implementation,  the  quality  of  funded  operations  is  a  key 
priority  for  the  Commission  and  is  ensured  at  all  phases  of  the  lifecycle  of  a 
project.  Quality  checks  are  performed  during  the  design  phase  of  each  project 
through a peer review mechanism (Quality Support Group) as well as both during 
and  after  the  implementation  phase  with  the  help  of  the  Result-Oriented-
Monitoring (ROM), internal monitoring, and evaluation. 

217. 

(European  Parliament,  EDF  §§  16-17)  -  Notes  with  satisfaction  that  the  Court  of 
Auditors  found  that  the  advance  payments  were  free  from  material  error;  deplores 
nevertheless  the  fact  that  the  Court  of  Auditors  found  a  material  level  of  error 
affecting the amount of payments audited; 

Can accept the argument that some of the errors (lack of invoices or other supporting 
documents),  i.e.  those  relating  to  the  occurrence  of  expenditure  in  Angola,  can  be 
explained by the particularly difficult conditions in which the audit was carried out in 
that  country;  stresses,  however,  that  47  %  of  the  quantifiable  errors  relate  to  the 
eligibility  of  expenditure  and  therefore  calls  on  the  Commission  to  improve  its 
control  system  so  as  to  reduce  errors  ;  draws  the  Commission’s  attention  in  this 
connection  to  the  recommendation  of  the  Court  of  Auditors  that  ex  ante  checks 
should be improved by focusing on key risks.  

Commission's response: 

The  requested  action  is  being  taken.  The  Commission  will  also  finalise  soon  a 
'Financial  Management  Toolkit'  for  organisations  implementing  EU  funded 
projects under EuropeAid's portfolio. 

218. 

(European  Parliament,  EDF  §  18)  -  Calls  on  the  Commission,  when  the  Financial 
Regulation  is  revised,  to  identify  any  procedural  problems  that  it  has  encountered 
during crises and to present to Parliament an effective control procedure, particularly 
as  regards  the  financing  of  emergency  aid  measures  by  Member  States,  that  is 
flexible  enough  not  to  harm  the  flow  of  funds  and  that  ensures  the  transparency  of 
the projects undertaken.  

Commission's response: 

The requested action has been taken in the context of the proposal on trust funds 
for a revised Financial Regulation for the General Budget. 

219. 

(European  Parliament,  EDF  §  20)  -  Criticises  the  fact  that,  as  in  previous  years, 
there  are  still  significant  weaknesses  in  the  financial  procedures  and  controls  of 
implementing organisations, supervisors and National Authorising Officers (NAOs); 
welcomes nevertheless the efforts of EuropeAid and the delegations in particular to 
address  those  weaknesses;  calls  for  those  efforts  to  be  stepped  up  in  future  and 
expects that future improvements expected in CRIS Audit will make a better result 
possible.  

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Commission's response: 

The  requested  action  is  being  taken.  The  Commission  will  finalise  a  'Financial 
Management  Toolkit'  for  organisations  implementing  EU  funded  projects  under 
EuropeAid's  portfolio.  EuropeAid  has  also  implemented  further  significant 
improvements to the audit methodology and IT tools and welcomes the recognition 
of the Court of Auditors on the substantial progress made in particular in relation 
to audit planning for 2010. 

220. 

(European Parliament, EDF § 21) - Stresses that democracy and the right for people 
to live under conditions where their human rights are not violated must be integrated 
goals  of  the  implementing  organisations  in  countries  where  EDF  support  is 
distributed.  

Commission's response: 

EU  approach  to  democracy  and  human  rights  is  about  supporting  efforts  of 
countries  in  progressing  towards  effective  implementation  of  their  human  rights 
and  democracy  commitments.  Democracy  and  human  rights  are  part  of  the  core 
values of the European Union. They are reflected in the European Consensus for 
Development  which  recommends  systematic  mainstreaming  of  these  issues  in  all 
development  instruments  as  well  as  in  the  Cotonou  Agreement  which  foresees 
support to the efforts of ACP countries in these fields. 

221. 

(European  Parliament,  EDF  §§  33-35)  -  Is  very  concerned  at  the  risk  of  loss  of 
institutional  memory  as  a  result  of  significant  staff  constraints  (excessive  turnover, 
and excessively high and increasing vacancy rates) disclosed in EuropeAid’s annual 
activity  report  and  expresses  concern  that  the  number  of  EuropeAid  staff  has 
continued to decline in comparison to funds committed; 

Reiterates its concern that there is a risk that a shortage or inadequate allocation of 
staff or the unavailability of specific skills and knowledge will have an impact on the 
effectiveness  of  action  taken  and  the  quality  of  the  controls,  verification  and 
monitoring; 

Supports  the  intention  expressed  by  the  Commission  to  recruit  additional  external 
staff to increase numbers at headquarters and in the delegations for the management 
and  control  of  the  EDF;  considers  such  an  increase  in  staff  to  be  all  the  more 
necessary because of the substantial increase in commitments under the Tenth EDF.  

Commission's response: 

The  constant  loss  of  knowledgeable  and  experienced  staff  due  to  the  three  years 
rule for contract agents combined with a  shrinking external staff population is a 
major challenge for EuropeAid. Unfortunately, the maximum length of contracts 
results  from  the  staff  regulations  which  cannot  be  changed  on  EuropeAid's 
initiative,  EuropeAid  tries  to  minimise  vacancies  for  contract  agent  positions  as 
much  as  possible;  timely,  up-front  training;  intensified  knowledge  management 
(including  the  monitoring  of  handover  situations).  Besides,  the  commission 
requested  in  the  2011  draft  budget  the  transformation  of  a  limited  number  of 
appropriations  for  contract  agents  into  posts,  part  of  which  should  benefit 

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EuropeAid  to  mitigate  the  loss  of  institutional  memory.  Finally,  the  revised  staff 
regulations  in  the  framework  of  the  creation  of  the  EEAS,  should  allow  for  the 
rotation of contract agents having first been employed in a delegation towards the 
Head  Office.  Through  this  new  system,  they  will  be  able  to  serve  in  HQ  and 
Delegations.  This  should  facilitate  a  better  preservation  of  expertise  both  in  HQ 
and in Delegations. 

222. 

(European  Parliament,  EDF  §§  36-38)  -  Notes  with  satisfaction  that  the  Court  of 
Auditors has recognised EuropeAid’s efforts to make significant improvements in its 
supervisory  and  control  systems;  supports  the  Commission  in  its  determination  to 
continue to improve the control systems’ architecture; 

Fully agrees with the recommendations of the Court of Auditors expressed in points 
55(a) to (f) and 56(a) and (b) of the annual report on the EDFs;  

Draws  attention  in  particular,  pending  solutions  to  the  lack  of  human  resources,  to 
the  recommendation  of  the  Court  of  Auditors  on  the  need  for  the  Commission  to 
carry  out  a  more  structured  risk  analysis, to  provide  a  more  realistic  assessment  of 
the resources available when preparing the annual audit plans, and to closely monitor 
the implementation of the audit plans throughout the year.  

Commission's response: 

EuropeAid  has  implemented  further  significant  improvements  to  the  audit 
methodology and IT tools and welcomes the recognition of the Court of Auditors 
on  the  substantial  progress  made  in  particular  in  relation  to  audit  planning  for 
2010. 

223. 

(European  Parliament,  EDF  §  39)  -  Points  out  that,  in  its  Special  Report  No 
18/2009,  the  Court  of  Auditors  assesses  EDF  support  for  regional  economic 
integration in East Africa and West Africa, to which a considerable proportion – over 
50  %  –  of  EDF  funding  is  allocated,  as  only  partially  effective;  calls  on  the 
Commission  to  take  steps  to  implement  the  measures  proposed  by  the  Court  of 
Auditors,  particularly  as  regards  coordinating  with  and  ensuring  coherence  with 
regional  organisations,  providing  sufficient  staffing,  coordinating  regional  and 
national strategies and providing a precise clarification of tasks, responsibilities and 
objectives.  

Commission's response: 

The  Commission 
the 
recommendations of the ECA report 18/2009 notably through the development of a 
guide on the management of regional programmes. 

the  necessary  action  with  regard 

taking 

to 

is 

224. 

(European  Parliament,  EDF  §  47)  -  Calls  on  the  Commission  to  provide  more 
comprehensive information than when following up the resolution of 23 April 2009 
on the specific procedures it has established with the EIB with a view to coordinating 
the two institutions’ efforts to achieve EU objectives relating to development, and on 
the efficiency of those procedures.  

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Commission's response: 

In the context of the mid-term review of the external mandate of the EIB, the need 
to strengthen the development aspect of the EIB's activities has been emphasised. 
The Commission's proposal to Council and Parliament for a new mandate decision 
contains concrete provisions to this effect. The Commission and the EIB will also 
continue to strengthen consistency of EIB external actions with EU external policy 
objectives  through  regular  and  systematic  dialogue  and  early  exchange  of 
information on strategic documents such as country and regional strategy papers 
which define the areas of EIB intervention as well as those of the Commission. 

EN 

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Requests to the Commission concerning the agencies 

225. 

(European  Parliament,  P7_TA(2010)0139  -  §  3)  -  The  European  Parliament  notes 
that many agencies record permanently high cash holdings; calls on the Commission 
and  the  agencies  to  work  on  ways  of  bringing  the  cash  holdings  down  to  an 
acceptable  level;  asks  the  Commission  against  this  background  also  to  examine 
alternative common plans for efficient management of cash holdings and to draw up 
proposals  with  a  view  to  changing  the  structural  framework  conditions  in  order  to 
achieve more efficient management of cash holdings; but notes also that the agencies 
receive  payments  after  the  authorised work  has been concluded and paid for (work 
undertaken  by  rapporteurs,  for  example)  and  therefore  some  cash  holdings  are 
essential  in  each  case.  [This  recommendation  appears  in  the  individual  EP 
resolutions  concerning 
the  following  agencies:  CDT,  ECDC,  ECA,  EFSA, 
EMCDDA, EMEA, EMSA, ENISA, EUROJUST, FRONTEX, ITER and SESAR].  

Commission's response: 

The Commission has taken the recommended action. 

The  Commission  attaches  great  importance  to  limiting  agency  cash  balances  to 
duly  justified  requirements,  in  accordance  with  the  principle  of  sound  financial 
management.  This  is  why  the  Commission  amended  the  Framework  Financial 
Regulation No. 2343/2002 by inserting Article 15(5), in force since 13 July 2008, 
which reads: 

'5. The Community body shall implement rigorous cash management, taking due 
account of assigned revenue, in order to ensure that its cash balances are limited 
to  duly  justified  requirements.  With  its  payment  requests  it  shall  submit  detailed 
and updated forecasts on its real cash requirements throughout the year, including 
information on assigned revenue.' 

All agencies have introduced this provision in their  specific financial  regulations 
(2009/2010). The payment of the Community contribution to the agencies from the 
budget follows this rule. By consequence, payments made by parent DGs are based 
on requests supported by a detailed and updated cash-flow forecast. 

According to Article 50 of Framework Financial Regulation, requests for payment 
of the community contribution to agencies are presented to the parent DGs under 
terms  and  at  intervals  agreed  with  them.  To  implement  this  Article,  parent  DGs 
have adopted or are in the process of adopting the terms and the intervals for the 
submission of requests for payments to the Commission. 

The  partially  self-financed  Agencies,  namely  the  European  Medicines  Agency 
(EMEA),  the  European  Chemicals  Legislation  and  Chemicals  Agency  (ECHA) 
and the European Aviation Safety Agency (EASA), have to deal with a higher level 
of uncertainty than agencies fully financed by a contribution from the EU budget. 
Indeed,  these  agencies  encounter  some  difficulty  in  applying  the  principle  of 
rigorous cash management, due to the difficulty in forecasting precisely when this 
other  revenue  (for  instance  deriving  from  fees  from  industry)  will  actually  be 

EN 

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received. Their financial situation in terms of cash management is therefore more 
complex. 

226. 

(European  Parliament,  P7_TA(2010)0139  -  §  6)  -  The  European  Parliament  ... 
requests  the  interinstitutional  working  group  on  agencies  to  tackle  the  issue  [host 
agreements] and possibly to define common standards for host agreements.  

Commission's response: 

This matter is being addressed by the interinstitutional group on agencies, whose 
work will be finalised by the end of 2011. 

227. 

(European Parliament, P7_TA(2010)0139 - § 10) - The European Parliament notes 
that  some  of  the  agencies  have  very  similar  remits;  calls  accordingly  for  the 
interinstitutional  working  group  on  agencies  to  consider  whether  some  agencies 
should work closely together or even be merged.  

Commission's response: 

This matter is being addressed by the interinstitutional group on agencies, whose 
work will be finalised by the end of 2011. 

228. 

(European Parliament, P7_TA(2010)0139 - § 11) - The European parliament notes, 
furthermore, that the small agencies (with fewer than 75 staff members, such as the 
European Police College, the European Network and Information Security Agency, 
the  European  Agency  for  Safety  and  Health  at  Work,  the  European  Union  Agency 
for  Fundamental  Rights  and  the  European  GNSS  Supervisory  Authority)  are  faced 
with serious efficiency problems; calls accordingly on the interinstitutional working 
group  on  agencies  to  look  into  the  feasibility  of  determining  the  critical  mass  of 
agencies  and  setting  up  common  services  providing,  for  example,  assistance  with 
procurement procedures, human resources procedures and the budgetary process.  

Commission's response: 

This matter is being addressed by the interinstitutional group on agencies, whose 
work will be finalised by the end of 2011. 

229. 

(European  Parliament,  P7_TA(2010)0139  -  §  15)  -  The  European  Parliament  calls 
on  the  interinstitutional  working  group  on  agencies  to  consider  whether  the 
Commission should have a blocking minority when votes are taken by management 
boards,  with  a  view  to  ensuring  that  the  right  technical  decisions  are  taken  for  the 
agencies.  

Commission's response: 

This matter is being addressed by the interinstitutional group on agencies, whose 
work will be finalised by the end of 2011. 

230. 

(European  Parliament,  P7_TA(2010)0139  -  §  16)  -  The  European  Parliament  calls 
on  the  interinstitutional  working  group  on  agencies  to  look  into  the  qualities  and 
skills  which  a  director  requires  in  order  to  run  an  agency  effectively  and  secure 

EN 

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access to expert advice on the EU's budget regulations from the moment the agency 
is set up.  

Commission's response: 

This matter is being addressed by the interinstitutional group on agencies, whose 
work will be finalised by the end of 2011. 

231. 

(European  Parliament,  P7_TA(2010)0139  -  §  17)  -  The  European  Parliament  calls 
on  the  Commission  to  step  up  its  efforts  to  provide  all  necessary  administrative 
assistance  to  the  relatively  small  agencies,  in  particular  those  that  were  set  up 
recently.  

Commission's response: 

Special  additional  assistance  to  small  agencies  is  being  discussed  by  the 
interinstitutional  group  on  agencies.  It  is  expected  that  the  group  will  provide  its 
conclusions by the end of 2011. 

232. 

(European Parliament, P7_TA(2010)0140 - § 5) - As regards CEPOL, the European 
Parliament  wonders  whether  consideration  should  not  be  given  to  attaching  the 
College to Europol.  

Commission's response: 

The  requested  action  has  been  taken.  Within  the  framework  of  the  Stockholm 
programme  the  Commission  proposed  that  Europol  could  take  over  the  training 
role of Cepol. The proposal was rejected by the Member States. 

The Commission would like to add also that corrective measures have been already 
taken  to  address  the  situation  in  CEPOL:  two  new  managers  were  appointed  in 
August 2009, a Head of Administration who should coordinate relations with DG 
HOME  and  budgetary  issues  in  particular  and  a  Head  of  Programme  who  is 
responsible for the policy implementation. In February 2010 the Governing Board 
adopted  the  new  financial  rules,  performance  indicators  are  being  developed  to 
allow the follow up and measuring of CEPOL's core business both on qualitative 
and  quantitative  plans  in  the  perspective  of  accountability  and  a  policy  of 
excellence towards the Commission, an Internal Audit Panel will be set up. 

On  the  basis  of  these  progresses  achieved  the  Commission  is  not  considering 
anymore the option of a possible fusion of the College with Europol. 

233. 

(European Parliament, P7_TA(2010)0140 - § 19) - As regards CEPOL, the European 
Parliament calls on the College and the Commission to communicate the findings of 
the OLAF investigation to the discharge authority without delay  

Commission's response: 

OLAF completed its investigation into CEPOL in December 2009 and transmitted 
its findings to the appropriate authorities in the UK. OLAF officials gave an oral 
briefing to the budgetary control committee during the 2008 discharge procedure. 

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234. 

(European Parliament, P7_TA(2010)0140 - § 22) - As regards CEPOL, the European 
Parliament  expects,  as  a  first  step,  the  Governing  Board  swiftly  to  adopt  an  action 
plan to meet the objectives set out in the annex to this resolution; asks the College's 
Director, in cooperation with the IAS and the parent directorate-general (DG), then 
to  draft  specific  measures  and  a  timetable  for  implementation  of  that  plan  and  to 
submit them to the Governing Board for adoption; calls accordingly on the IAS and 
the  parent  DG  to  provide  all  the  assistance  required  in  order  to  identify  indicators 
that  will  enable  the  progress  made  in  implementing  the  measures  taken  by  the 
College to be measured at regular intervals; expects the College to communicate the 
specific measures and indicators adopted to the discharge authority by 30 June 2010  

Commission's response: 

The  requested  action  has  been  taken.  Administrative  Multi-Annual  Plan  "A 
strategic  approach  to  the  improvement  and  maturing  of  the  Administration  of 
CEPOL  2010  –  2014)  has  been  developed  to  describe  the  strategy  that  will  be 
implemented  within  CEPOL  to  improve  and  mature  the  administration  of  the 
Agency.  It  has  been  developed  out  of  recognition  of  the  need  to  improve  the 
administration  of  the  Agency  and  in  response  to  the  request  if  the  CONT 
Committee following the decision to postpone the discharge decision on the 2008 
CEPOL  accounts.  The  document  contains  specific  measures  and  a  timetable  for 
implementation  of  corrective  actions.  The  Governing  Board  adopted  this  action 
plan at its 20th meeting on 25 May 2010. The document has been submitted to the 
Committee on Budgetary Control on 3 June 2010. 

235. 

(European  Parliament,  P7_TA(2010)0101  -  §  3-4)  -  As  regards  the  European 
Agency  for  Reconstruction,  the  European  Parliament  stresses  that  the  relevance  of 
the five cross-border cooperation projects audited by the Court of Auditors (worth a 
total of EUR 528 000 – 0,12% of the available operational budget) was challenged 
on  the  grounds  that  the  Evaluation  Committee,  comprising  the  Agency  and  a 
Commission delegation, had not taken account of the issues raised by local assessors; 
[...] calls, now that the Agency's work has finished, for an evaluation of the funding 
allocated in Kosovo to determine whether the allocation of funding there resulted in 
the establishment of functional, sustainable justice and administration structures.  

Commission's response: 

Concerning the cross-border cooperation projects, the Commission wishes to recall 
that under the rules in force, The Agency's Evaluation Committee was not bound 
by  the  opinion  of  the  assessors.  The  current  structures  for  financial  assistance 
ensure sound financial management. More generally, the Commission stresses that 
The European Agency for Reconstruction has been an efficient tool for the area it 
was  designed  for,  thanks  to  its  speed  in  delivery  which  was  essential  in  the 
reconstruction phase. 

The Commission commissioned several external evaluations of CARDS projects in 
the Western Balkans and in Kosovo, including projects in the area of justice and 
home affairs. The most recent evaluation report was issued in July 2009. 

As  regards  the  justice  sector  in  the  Western  Balkans,  the  evaluators  found  that 
several reforms have taken place, but effective implementation is still not adequate. 

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The  main  challenge  in  this  area  is  to  increase  the  capacity  of  these  countries  to 
implement  legislation.  The  output  of  CARDS  projects  in  the  area  concerned  has 
suffered  delays  and  contractors  have  not  always  managed  to  engage  the 
beneficiary  countries.  The  fact  that  project  design  was  sometimes  too  ambitious 
and  that  laws  were  passed  only  partially  did  not  prevent  some  projects  from 
delivering. The evaluators also found that the process was generally going in the 
right  direction.  The  use  of  twinning  in  the  area  of  justice  and  home  affairs  was 
found to be a key to successful project implementation. 

As concerns Kosovo, the evaluation concluded that is was too early to measure the 
projects'  overall  impact  in  terms  of  a  better  functioning  justice  system,  but  that 
institutional impact could be detected for some projects in the sector. It also found 
that initial institutional impact in terms of developed capacity and structures had 
the  potential  to  contribute  to  a  better  functioning  of  the  justice  institutions. 
Institutional  strength  and  development  should  secure  sustainability  of  project 
results.  Staff  fluctuations  are  an  issue  for  most  of  the  institutions  in  the  Justice 
sector impacting sustainability of the project results. The evaluators found that too 
many components and outputs reduce the overall sustainability of the projects due 
to limited budgets and capacity. The overall rating for impact and sustainability in 
the justice sector is Moderately Satisfactory. 

The evaluation reports referred to above are available upon request. 

236. 

(European Parliament, P7_TA(2010)0101 - § 6) - As regards the European Agency 
for  Reconstruction,  the  European  Parliament  Deplores  the  fact  that  the  efficiently 
functioning Agency has been wound up and the management of the funding has been 
transferred  to  the  delegations;  demands  that  the  Commission  submit  a  report 
detailing  how  many  staff  the  delegations  have  taken  on  to  cope  with  the  Agency's 
tasks;  calls  on  the  Commission  to  supply  comprehensive  and  complete  information 
on  whether  budget  support  has  been  provided  from  the  funds  transferred  from  the 
Agency to the delegations.  

Commission's response: 

In order to ensure adequate transfer of know-how from the European Agency for 
Reconstruction to the delegations, the following Delegations/ECLO increased their 
workforce as follows: 

Serbia : from 27 in the beginning of 2007 to 100 at the end of 2008. Former staff 
of  the  Agency  represents  21%  (21  staff  members)  of  the  total  staff  of  the 
Delegation. 

The Liaison Office in Kosovo: from 10 in the beginning of 2007 to 78 at the end of 
2008.  Former  staff  of  the  Agency  represents  23%  (18  staff  members)  of  the  total 
staff of the Delegation. 

The former Yugoslav Republic of Macedonia: from 25 in the beginning of 2007 to 
79  at  the  end  of  2008.  Former  staff  of  the  Agency  represents  35%  (28  staff 
members) of the total staff of the Delegation. 

EN 

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The  Delegation  in  Montenegro  started  its  activities  in  November  2007.  It  had  a 
total  workforce  of  37  staff  members  on  1  January  2009.  Former  staff  of  the 
Agency represents 35% (13 staff members) of the total staff of the Delegation. 

This  represents  a  total  of  80  staff  members  transferred  from  the  EAR  to  the 
Delegations/ECLO. 

237. 

(European  Parliament,  P7_TA(2010)0102  -  §  12)  -  As  regards  the  European 
Aviation Safety Agency, the European Parliament expresses concern about the lack 
of coordination between the needs, staff and financial regulation of the Agency and, 
in  particular,  that  the  staff  selection  procedures  make  it  difficult  to  recruit 
appropriately qualified personnel; considers that the interinstitutional working group 
on decentralised agencies could address this issue.  

238. 

Commission's response: 

This matter is being addressed by the interinstitutional group on agencies, whose 
work will be finalised by the end of 2011. 

(European Parliament, P7_TA(2010)0103 - § 7-8) - As regards the European Center 
for Disease Prevention and Control, the European Parliament is concerned that as of 
31  December  2008  there  was  still  no  seat  agreement  between  the  Centre  and  the 
Swedish Government as there were still many outstanding issues that needed further 
negotiation; points out that in its discharge for the financial year 2007, the discharge 
authority was already expressing concern at the Court of Auditors" observation that 
the Centre had disbursed EUR 500 000 on renovation works on the buildings rented 
for its premises, and that, as in 2006, these works had been decided upon by direct 
agreement  between  the  Centre  and  the  owner  without  specifying  the  nature  of  the 
works and the deadlines and payment conditions; nevertheless welcomes the fact that 
an  agreement  was  concluded  in  March  2009  on  personal  identity  numbers  and 
supports  the  Centre's  efforts  to  find  definitive  solutions  with  the  Swedish 
government; reminds the interinstitutional working group on decentralised agencies 
to address this issue in general terms in its discussions.  

Commission's response: 

This matter is being addressed by the interinstitutional group on agencies, whose 
work will be finalised by the end of 2011. 

Moreover, in the concrete case of ECDC, a seat arrangement agreement with the 
Swedish authorities was signed on 29 June 2010. 

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