REPORT FROM THE COMMISSION Member States' Replies to the Court of Auditors' 2009 Annual Report   {SEC(2011) 262 final}
Date: 2011-02-28
Institutions: European Commission
Subjects: EU Member State, European Court of Auditors, activity report, agricultural expenditure, common agricultural policy, financial management, financial year, management audit, structural expenditure

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EUROPEAN COMMISSION 

Brussels, 28.2.2011 
COM(2011) 104 final 

REPORT FROM THE COMMISSION 

Member States' Replies to the Court of Auditors' 2009 Annual Report  

{SEC(2011) 262 final} 

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TABLE OF CONTENTS 

1. 

2. 

2.1 

2.2 

2.3 

3. 

4 

4.1 

4.2 

4.3 

5. 

Scope of the Report...................................................................................................... 3 

DAS 2009 Findings...................................................................................................... 3 

The Court's audit methodology .................................................................................... 3 

The Court's Annual Report- a new presentation .......................................................... 4 

Clean Accounts and a continuing reduction in the most likely error rate for payments
...................................................................................................................................... 4 

Action taken by the Member States ............................................................................. 6 

Member States' replies to the questionnaire concerning the Court's 2009 Annual 
Report........................................................................................................................... 7 

Supreme Audit Institutions .......................................................................................... 7 

Agriculture and Natural Resources .............................................................................. 8 

Cohesion....................................................................................................................... 9 

Conclusion.................................................................................................................. 11 

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REPORT FROM THE COMMISSION 

Member States' Replies to the Court of Auditors' 2009 Annual Report 

1. 

SCOPE OF THE REPORT 

The European Union's external auditor, the European Court of Auditors (the Court), 
under  the  terms  of  the  Treaty1  provides  a  statement  of  assurance  (the  DAS)  in  its 
Annual  Report.  The  DAS  concerns  the  reliability  of  accounts  and  the  legality  and 
regularity of the underlying transactions and is provided to the European Parliament 
and the Council.  

The Financial Regulation states that as soon as the Court has transmitted the Annual 
Report, the Commission shall inform the Member States concerned immediately of 
the details of that report which relate to management of the funds for which they are 
responsible,  under  the  rules  applicable.  Member  States  should  reply  to  the 
Commission  within  sixty  days  and  the  Commission  transmits  a  summary  of  the 
replies to the Court of Auditors, the European Parliament and the Council before 28 
February2 

Following publication on 9 November 2010, the Commission duly informed Member 
States of details of the report. This information was presented in the form of a letter 
and  three  annexes:  Annex  1  was  a  questionnaire  on  the  paragraphs  in  the  report 
referring to the individual Member States; Annex II was a questionnaire on the audit 
findings  which  refer  to  the  individual  Member  State  and  Annex  III  was  a 
questionnaire on general findings related to Shared Management for DAS 2009.  

This report is an analysis of the Member States' replies and is accompanied by a Staff 
Working  Document  (SWD)  which  is  a  summary  of  the  findings  and  the  replies  to 
Annex I and Annex III. 

2. 

DAS 2009 FINDINGS 

2.1 

The Court's audit methodology 

The Court's audit approach and the methodology used for regularity of transactions, 
is based on testing transactions and assessments of the effectiveness of supervisory 
and  control  systems.  This  is  supplemented  by  an  analysis  of  management 
representations and evidence provided by other auditors. 

With  regard  to  transactions,  the  Court  selects  a  representative  statistical  sample  for 
each policy group and then carries out a detailed examination of that sample. In order 
to further evaluate its audit work, the Court classifies errors as quantifiable and non- 
quantifiable. Only quantifiable errors contribute to the error rate. Table 1 at the end 

1 
2 

Article 248 of the EC Treaty (Article 287 of the Lisbon Treaty) 
OJ L 390, 30/12/2006 -Financial Regulation Article 143.6 

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of this report, provides a detailed breakdown of all quantifiable and non quantifiable 
errors extrapolated by the Court and used in its audit work. 

Errors  are  further  categorised  by  nature-  in  particular  eligibility  (payment  does  not 
meet  eligibility  rules),  occurrence  (reimbursement  of  a  cost  which  is  not  proven  to 
have  been  incurred)  and  accuracy  (payment  incorrectly  calculated).  The  Court  also 
examines the frequency of errors by presenting the proportion of transactions in any 
one sample which is affected by errors- both quantifiable and non quantifiable. This 
frequency of errors provides an indication of how widespread errors are likely to be 
within a policy group3. 

The  Court  also  determines  the  most  likely  error  rate  by  estimating  the  overall 
financial impact of quantifiable errors. The most likely error rate is classified in three 
ranges-below 2%,-between 2%-5%,-above 5%.  

Finally  the  Court  also  assesses  the  supervisory  and  control  systems  by  examining 
their effectiveness in ensuring regularity. 

2.2 

The Court's Annual Report- a new presentation  

In terms of presentation, the structure of the Annual Report for 2009 changed. The 
Court merged the observations relating to internal control systems, the management 
representations  and  budget  implementation  into  the  DAS  Chapter  and  the  policy 
group  chapters.  The  DAS  chapter  included  an  annex  on  the  Court's  audit  approach 
and methodology. As a result of this new presentation of information, the number of 
chapters was reduced from eleven to nine and the policy group chapter numbers were 
altered.  

2.3 

Clean  Accounts  and  a  continuing  reduction  in  the  most  likely  error  rate  for 
payments 

The Court's 2009 DAS findings stated that the accounts of the European Union give 
a fair presentation- or true and fair view- of the financial position and the results of 
operations and cash flows. In addition, the Court acknowledged that the Commission 
had improved the detailed information disclosed about recoveries of irregularly paid 
amounts and other corrections in the notes to the final accounts.  

As  far  as  legality  and  regularity  of  transactions  were  concerned,  in  2009  the  Court 
found that payments for Revenue were free from material error and the supervisory 
and control systems were effective. Commitments were also free from material error. 
However, with the exception of two areas of expenditure-Administrative expenditure 
and  Economic  and  financial  affairs-  payments  from  the  budget  continued  to  be 
materially affected by error. 

Regarding  the  supervisory  and  control  systems,  the  Court  stated  that  for  all  policy 
groups, with the exception of Revenue and Administrative expenditure, all systems 
were partially effective. 

3 

ECA Annual Report 2009 Annex 1.1 

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For  the  policy  group  Agriculture  and  Natural  Resources,  the  most  likely  error  rate 
has increased  in comparison  to  2008.  The estimate of the most likely error rate for 
the chapter was between 2%-5% and accuracy errors were the most common type of 
quantifiable  error  found  by  the  Court.  As  regards  the  supervisory  and  control 
systems, IACS4, the main system to ensure regularity of transactions, although well 
designed, was found to be adversely affected by the degree of accuracy of the data 
entered and the quality of the cross checks carried out in its databases. 

With reference to the Cohesion chapter, the Court highlighted a significant decrease 
in the most likely error rate which was estimated at above 5%. Errors of eligibility 
were the most common type of quantifiable error. For systems relating to the 2007-
2013 implementation period, the Court found weaknesses with regard to verifications 
carried  out  by  Management  Authorities/and  or  systems  audited  by  the  Audit 
Authorities.  Systems  for  reporting  of  corrections  to  the  Commission  for  the  2000-
2006  period  were  also  partially  unsatisfactory.  The  Court  therefore  assessed  the 
supervisory and control systems as partially effective. 

The table below is a summarized version of the information on the Court's findings 
per policy group.5 

Specific assessments 

Revenue or operational 
expenditure 
(million euro) 

Functioning of supervisory 
and control systems 

Revenue 

117,285  Effective 

Error rate range 

Less than 2 % 
(below materiality threshold) 

Agriculture and natural resources 

56,318  Partially effective(4) 

Between 2 % and 5 %(4) 

Cohesion 

35,467  Partially effective(4)(1) 

Greater than 5 %(2) 

Research, energy and transport 

7,966  Partially effective(4) 

Between 2 % and 5 %(4) 

External aid, development and 
enlargement 

6,596  Partially effective(4) 

Between 2 % and 5 %(4) 

Education and citizenship 

2,153  Partially effective(4)(3) 

Between 2 % and 5 %(4) 

Economic and financial affairs 

732  Partially effective(4) 

Administrative and other 
expenditure 

9,129  Effective 

Less than 2 % 
(below materiality threshold) 

Less than 2 % 
(below materiality threshold) 

The above table summarises the overall assessment of supervisory and control systems, as outlined in the relevant chapters, and 
gives the broad results of the Court's substantive testing. The table highlights the key elements but cannot present all of the relevant 
detail (in particular concerning weaknesses of supervisory and control systems and types of error) for which it is necessary to refer to 
the body of the report, within the context of the methodology underlying the Court's audit approach (see Annex 1.1, paragraphs 3 to 
18). 
(1) 

The majority of the work on systems relates to the new period and consisted of examining the compliance of the systems with 
regulatory requirements and resulted in an assessment as"partially compliant" (see paragraph 4.36). 

(2) 
(3) 

(4) 

(5) 

Interim and final payments reimbursing certified expenditure amounting to 23 081 million euro (see paragraph 4.15). 

The assessment of the supervisory and control systems is based on the examination of the Commission's system for 
closures of programmes and projects (see paragraph 7.19). 

Systems are classified as 'partially effective' where some control arrangements have been judged to work adequately whilst 
others have not. Consequently, taken as a whole, they might not succeed in restricting errors in the underlying transactions to 
an acceptable level. 

The Court decided to present the error rates (see Annex 1.1, paragraphs 8 to 12) in three intervals. These error rate ranges 
cannot be interpreted as a confidence interval (in a statistical sense). 

4 
5 

Integrated Administrative and Control System 
Extracted  from  ECA  Annual  Report-  Table  1.2  p22-  Summary  of  2009  findings  on  the  regularity  of 
transactions 

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3. 

ACTION TAKEN BY THE MEMBER STATES 

As  mentioned  in  the  introduction,  in  addition  to  the  letter,  the  Commission  duly 
provided each Member State with three annexes-Annex 1 was a questionnaire on the 
paragraphs  in  the  report referring  to the individual Member States; Annex II was a 
questionnaire  on  audit  findings  which  refer  to  the  individual  Member  State  and 
Annex III was a questionnaire on general findings related to Shared Management for 
DAS 2009. For Annex I and II, the Member States were asked, where necessary, to 
provide details of actions taken to rectify the errors as well as the timing, content and 
expected outcome.  

In  the  case  of  Annex  I,  replies  provided  by  the  Member  States  were  generally 
extensive6.  Although  the  Court  highlighted  paragraphs  related  to  all  policy  areas, 
Member States' replies focused mostly on the Court's paragraphs related to the policy 
areas Revenue, Agriculture and Natural Resources and Cohesion.  

For  example,  in  the  policy  area  Revenue,  the  Court  reported  on  the  Greek 
government  deficit  and  debt  statistics  and  called  into  question  the  quality  of  the 
Greek  macroeconomic  statistics,  including  the  national  accounts7.  The  Greek 
response underlined that effective action had been taken and stated: 

"As far as improvements to the quality of national accounts is concerned, the update 
to  the  joint  statistics  action  plan  agreed  by  the  Steering  Group  in  October  2010 
focuses  on  specific  actions  to  be  taken  in  2011  designed  to  improve  the  quality  of 
sectoral accounts, household savings accounts, quarterly accounts, volume and price 
measurements and a revision of the national accounts."8 

Also  highlighted  in  the  policy  group  Agriculture  and  Natural  Resources  was  the 
Court's audit work on the effectiveness of systems and the fact that the 2009 Annual 
Activity  Report  (AAR)  of  the  Director  General  for  Agriculture  and  Rural 
Development contained a reservation in respect of the expenditure under the IACS in 
Bulgaria  and  Romania9.  Both  countries  replied  clearly  that  firm  action  had  been 
taken and was ongoing. Bulgaria stated that: 

"As  regards direct  payment  expenditure, a consolidated action plan to improve the 
functioning  of  the  IACS  was  approved  in  2009  and  Bulgaria  has  since  then  been 
working  to  implement  the  recommendations  and  measures  laid  down  in  the  plan. 
Detailed  accounts  of  the  progress  made  implementing  the  consolidated  plan  are 
submitted to the Commission every three months."10 

: 

According to Romania, "the Director of the Agency took a keen interest in the 2010 
financial year in ensuring that effective remedial measures were taken, which would 
result in the improvement of IACS. 

6 
7 
8 
9 
10 

See attached Staff Working Documennt (SWD) 
ECA report-paragraph2.27 
SWD p15 
ECA report-paragraph 3.68 
SWD-p50-51 

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With  regard  to  the  reservations  expressed  by  the  Certifying  Body  in  the  Report  for 
2009,  APIA11  has  made  efforts  and  has  achieved  significant  progress 
in 
implementing 
the 
IACS  Action  Plan  and 
recommendations of the Certifying Body".12 

the  measures  set  out 

the 

in 

With  regard  to  Annex  II,  a  questionnaire  on  the  audit  findings  which  refers  to  the 
individual  Member  State,  the  majority  of  Member  States  provided  detailed  replies. 
These  findings  were  mostly  related  to  the  policy  area  Agriculture  and  Natural 
Resources  and  Cohesion  and  had  been  previously  provided  by  the  Court  to  the 
Member  State  in  the  form  of  Statements  of  Preliminary  Findings  (SPFs).  SPFs  are 
findings  arising  from  the  audit  work  of  the  Court  and  are  sent  to  the  auditee. 
Information  provided  by  the  Member  States  in  their  replies  can  therefore  be 
considered as a follow up to all actions already undertaken after receipt of the initial 
SPF. 

In total 24 Member States were audited for DAS 2009. Member States with a large 
number of findings (more than 10 findings) included France, Germany, Greece and 
Spain.  Those  with  less  than  5  findings  included  Demark  and  the  Netherlands. 
Generally,  quantifiable  errors  were  accepted  by  Member  States  and  the  necessary 
corrective action was reported to have been taken. 

In  over  50%  of  cases  where  replies  to  the  findings  were  provided  Member  States 
reported that action had already been taken and was either completed or ongoing. In 
the  case  of  Portugal  for  example,  comprehensive  replies  to  all  findings  were 
provided.  Most  of  the  findings  were  serious  quantifiable  errors  and  in  all  cases 
payment adjustments or corrections were reported as having been duly made. 

taken, 

justifications  and  supporting 
In  most  cases  where  no  action  was 
documentation  were  provided.  This  was  the  case  for  Spain  which  took  action  for 
approximately  50%  of  its  findings  which  were  mostly  for  Agriculture  and  natural 
resources. For 18 findings no action was taken, due partly to outstanding information 
being requested from the Commission or a disagreement with regard to the nature or 
seriousness  of  the  findings.  Supporting  documents  were  also  included  with  the 
replies.  This  was also  the case for  Cyprus which provided replies to all the Court's 
findings,  14  in  total,  all  related  to  systems  audits  in  the  Agriculture  and  natural 
resources chapter. For 11 findings, action was taken and in the 3 cases where Cyprus 
disagreed with the findings, justification was provided. 

4. 

MEMBER  STATES'  REPLIES  TO  THE  QUESTIONNAIRE  CONCERNING  THE  COURT'S 
2009 ANNUAL REPORT 

4.1 

Supreme Audit Institutions (SAIs) 

The  information  provided  by  Member  States  with  regard  to  the  Court's  findings  is 
further supplemented by their replies to a questionnaire on the main issues for DAS 
2009.  

11 
12 

Agentia de Plati si Interventie Pentru Agricultura 
SWD-p51-52 

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As was the case for the report in 2008, for the 2009 report, questions were addressed 
to the SAIs. The first question concerned the single audit principle as defined by the 
Court of Auditors in its single audit opinion 2/2004 and whether SAIs found this a 
useful tool. Approximately half the SAIs of the Member States highlighted the fact 
that the single audit principle had potential benefits. The SAI in Latvia stated that the 
single audit principle could be "deemed an efficient tool for managing EU funds, as it 
could enhance the quality of audit activities without undermining the independence 
of the audit bodies concerned". The French SAI cited several reasons in support of 
the  principle,  including  harmonising  and  lowering  the  costs  of  controls,  as  well  as 
providing  the  auditing  authority  with  a  more  comprehensive  view  of  the  audit 
results.13 

The  Finnish  SAI  pointed  out  that  their  interpretation  of  the  international  auditing 
standards  differs  from  the  European  Court  of  Auditors'  practices  and  that 
consequently,  the  SAIs  could  not  directly  apply  the  results  of  each  other's  audits; 
Adjustments would therefore be required.14  

Some  SAIs,  were  concerned  that  the  single  audit  principle  could  compromise  the 
independence  of  the  institutions.  This  concern  with  independence  was  illustrated 
clearly  by  the  Belgian  SAI  (FR  division)  which  made  a  formal  statement  that  it 
would  not  provide  a  reply  to  any  of  the  questions  posed  to  the  SAIs  directly.  The 
reasons  given  were  that  it  had  an  independent  position  as  the  national  external 
control  body  and  the  fact  that  all  SAIs  were  mandated  to  act  as  observers  in  the 
context  of  an  audit  carried  out  by  the  Court.  In  general,  Member  States  SAIs  also 
advised caution and noted that assurance was required at each level of the pyramid in 
order to ensure that the principle worked. 

The  SAIs  were  also  surveyed  on  the  materiality  threshold  which  they  applied.  The 
majority  of  the  institutions  claimed  to  use  a  threshold  between  0.5%  and  2%  with 
possible variations. Germany highlighted the fact that the Federal SAI was unable to 
provide information on the extent to or the levels at which the materiality threshold 
was applied by the various Courts of Auditors in each Lander.15 

The  third  question  for  the  SAIs  concerned  the  use  of  the  EC  reports  on  payments 
which  have  been  made  available  to  the  Member  States  since  2006.  Overall,  SAIs 
found  that  the  information  and  data  provided  by  the  Commission  in  these  reports 
were useful in the context of their audit work.  

4.2 

Agriculture and Natural Resources 

The  questionnaire  also  included  a  question  on  simplification  in  the  area  of  rural 
development.  More  than  half  the  Member  States  stated  that  not  only  were  they 
favourable  to  the  idea  of  simplification  but  that  they  had  introduced  simplification 
initiatives,  such  as  clarifying  and  harmonising  national  rules  and  procedures  or 
reducing  beneficiaries'  information  obligations.  Many  of  these  initiatives  were 
taken  by 
currently  underway.  France  for  example,  underlined 

the  actions 

13 
14 
15 

SWD-p73 
SWD-p69 
SWD-p75 

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MAAPRAT16 to simplify rural development rules with particular emphasis on online 
declaration17. Lithuania underlined that "in order to simplify the administrative and 
award  procedure  for  support  under  the  2007-13  Lithuanian  Rural  Development 
Programme amendments were made to general legislation".18  

Slovenia  made  reference  to  complicated  reporting  systems  which  since  2010  it  has 
been simplifying and also the "(over-strict) system of infringements and sanctions", 
which  it  had  been  upgrading  in  order  to  ensure  that  "possible  infringements  are 
defined  more  clearly,  while  sanctions  are  more  effective,  dissuasive  and  in 
proportion to the gravity of the infringements." 

Member  States  also  underscored  their  cooperation  with  each  other  and  ongoing 
dialogue  with  the  Commission  in  defining  and  implementing  simplification.  Spain 
highlighted  its  interregional  dialogues  as  well  as  its  participation  "in  meetings  or 
forums at European level related to simplifying the CAP".19 

4.3 

Cohesion 

In the Cohesion chapter, three issues were raised: eligibility criteria, procurement and 
effective management verifications. Firstly, with regard to stricter eligibility criteria, 
Member  States  underlined  the  fact  that  there  were  two  levels  of  consideration- 
EU/national level and programme level. Some Member States suggested that stricter 
rules were necessary and required from a legal view point. France and Finland both 
drew attention to the fact that Article 56 of Council Regulation n° 1083/2006 on the 
2007-201320  programmes  stipulates  that  the  rules  on  the  eligibility  of  expenditure 
must  be  laid  down  at  national  level.  Finland  therefore  noted  that  "the  Regulation 
itself requires national eligibility rules to be more detailed than those laid down at 
Community level. Member States thus do not merely have the possibility of imposing 
eligibility  requirements  but  are  under  an  obligation  to  enact  more  specific 
requirements than those laid down by the Regulation at Community level".21 

However,  some  Member  States  indicated  that  EU  level  eligibility  rules  were  not 
specific enough for the needs of the programmes and that greater emphasis should be 
placed  on  programme  specific  rules.  Poland  summed  up  the  issue  by  stating  that 
there  is  "the  need  to  adapt  general  provisions  of  Community  law  to  the  specific 
characteristics  of  the  Operating  Programme.  It  was  therefore  necessary  to  make 
them more specific so that they were not misinterpreted by the beneficiary."22 

Secondly, on the subject of procurement, the Member States were nearly all in favour 
of more training for national and regional authority staff as well as beneficiaries by 
the  Commission  and  many  Member  States  underlined  the  complex  nature  of  the 

16 

17 
18 
19 
20 

21 
22 

Ministère  de  l'Agriculture  de  l'Alimentation,  de  la  Pêche,  de  la  Ruralité  et  de  l'Aménagement  du 
Territoire 
No paper documents;100% electronic process of the application by the farmers. 
SWD-p81 
SWD-p94 
Article 56.4. The rules on the eligibility of expenditure shall be laid down at national level subject to the 
exceptions provided for in the specific Regulations for each Fund. They shall cover the entirety of the 
expenditure declared under the operational programme. 
SWD-p71 
SWD-p88 

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rules. A significant number of Member States also considered that clearer guidelines 
from the Commission were necessary. Table 1 below summarizes the questions and 
responses provided by Member States on the procurement rules. 

Table 1- Procurement 
a)  more  training  for  national/regional  authority  staff  by  the 
Commission? 

b)  Should  training  include  national/regional  authority  staff 
and beneficiaries?   

c)  Should  clearer  guidelines  be  provided  to  Member  States 
by the Commission? 

d) Should more guidelines be provided to Member States by 
the Commission? 

YES 
NO 
Other answer 
YES 
NO 
Other answer 
YES 
NO 
Other answer 
YES 
NO 
Other answer 

20 
5 
2 
21 
5 
1 
22 
4 
1 
12 
11 
4 

74%
19%
7%
78%
19%
4%
81%
15%
4%
44%
41%
15%

Finally, with regard to more effective management verifications, approximately half 
of the Member States agreed that more precise eligibility rules were required at EU 
and  national  level.  Member  States,  who  disagreed  with  this  idea,  stated  that  it  was 
generally  because  it  was  not  an  optimal  solution.  The  UK  stated  that:  "the 
Commission have already significantly strengthened their supervisory role in shared 
management of the Cohesions funds. Any further increase in their control eats away 
at  Member  States’  competence".  Malta  noted  that  "more  precise  rules  might 
compromise the element of flexibility and  simplification which are necessary in the 
management of the Funds". 

Table 2 below is a summary of the questions on verifications at managing authority 
level and the replies by the Member States. 

Table 2 Management authorities 

(a) more precise eligibility rules at EU and national 
level 

(b) less rigid eligibility rules at EU and national 
level 

(c) more guidance to beneficiaries 

(d) additional staff resources at national level 

e) revised internal guidelines for managing 
verifications 

YES 
NO 
Other answer 
YES 
NO 
Other answer 
YES 
NO 
Other answer 
YES 
NO 
Other answer 
YES 
NO 
Other answer 

14
10
3
9
12
6
15
7
5
11
8
8
12
9
6

52%
37%
11%
33%
44%
22%
56%
26%
19%
41%
30%
30%
44%
33%
22%

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5. 

CONCLUSION 

The results of the Court's 2009 Annual Report illustrate the continuing improvement 
of the performances of all actors involved in the management of the EU funds. The 
fact that for the budget as a whole the Court's estimate of error has fallen over recent 
years,  that  for  the  third  year  in  a  row,  a  "clean  opinion"  on  the  accounts  has  been 
given and that the error rate in Cohesion has fallen significantly, are all worth noting. 
However,  it  is  clear  that  there  is  a  need  for  further  sustained  improvement,  in 
particular,  for  the  European  funds  under  shared  management  between  the 
Commission and the Member States. 

Member States replies remarked positively on the improvements noted by the Court 
and,  particularly,  the  significant  decrease  in  the  most  likely  error  rate  in  the  policy 
area Cohesion. However, Member Sates signalled that even closer cooperation with 
the  Commission  is  desirable.  For  instance,  in  the  complex  field  of  procurement, 
guidance  and  support  in  the  form  of  training  programmes  and  targeted  guidelines 
have been highlighted as key issues which need to be continually addressed. 

The Commission remains firmly committed to improving EU financial management. 
The  current  Commission  proposal  for  a  recast  Financial  Regulation  deals  with  the 
issues  highlighted  by  both  the  Court  and  the  Member  States  in  their  replies  to  the 
Court's findings. This is particularly relevant as regards the Commission proposals to 
lay  down  the  control  and  audit  obligations  of  the  Member  States  in  the  Financial 
Regulation23  and  to  further  simplify  and  rationalise  the  rules  applicable  to  the  EU 
funds  and  programmes.  Together  these  two  commitments  are  regarded  as  an 
important  route  to  the  significant  improvement  in  the  quality  of  spending.  At  the 
same time, the Commission remains acutely attentive to the fact that simplification of 
programme  structures  and  management  systems  at  beneficiary  level  should  not 
undermine assurance provided by a high effectiveness of controls. 

The Commission is focused on sustaining the positive trend in the evolution of sound 
financial  management.  It  is  therefore  of  particular  importance  that  the  Commission 
and  the  Member  States  cooperate  even  more  closely  to  address  the  findings 
highlighted by the Court. 

23 

Also stated in the Lisbon Treaty – Article 317 

EN 

11 

   EN 

                                                 
Table I 

ACCURACY 

ELEGIBILITY 

OCCURRENCE 

OTHER COMPLIANCE ISSUES 

Member 
State 
Austria 
Belgium 
Bulgaria 
Czech Rep 
Cyprus 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
UK 
TOTAL 

EN 

AGRI COH  REV  Total  

AGRI  COH  REV Total  AGRI  COH  REV Total  AGRI COH 

REV 

3
0
0
4
0
1
0
0
6
4
3
1
1
1
0
0
1
0
1
0
1
0
1
0
1
0
6

0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
1
2
0
0
0
0
2
0

0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
1 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 

3
0
0
5
0
1
0
0
7
4
3
1
1
2
0
0
1
0
1
1
3
0
1
0
1
2
6
43  

0
0
2
0
0
0
0
0
0
1
1
0
0
2
0
0
0
0
0
0
0
0
0
0
0
0
2

0
0
0
0
0
1
1
0
2
1
1
2
0
0
0
0
1
0
0
0
5
0
0
0
9
1
0

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 

0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

1
0
0
0
0
0
0
0
1
1
7
1
0
5
0
0
0
0
1
0
1
8
1
0
1
0
2

0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
2  

0
0
0
0
0
0
5
0
5
15
1
4
0
0
0
4
5
0
0
2
0
0
4
0
3
1
0

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0

0
0
2
0
0
1
1
0
2
2
2
2
0
2
0
0
1
0
0
0
5
0
0
0
9
1
2
32  

12 

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Total  
1
0
0
0
0
0
5
0
6
16
8
5
0
5
0
4
5
0
1
2
1
8
5
0
4
1
2
79  

T. AGRI 
4 
0 
2 
4 
0 
1 
0 
0 
7 
6 
11 
2 
1 
8 
0 
0 
1 
0 
2 
0 
2 
9 
2 
0 
2 
0 
10 

T. 
COH 
0 
0 
0 
1 
0 
1 
6 
0 
8 
16 
2 
6 
0 
0 
0 
4 
6 
0 
0 
3 
7 
0 
4 
0 
12 
4 
0 

T. 
REV 
0 
0 
0 
0 
0 
0 
0 
0 
0 
1 
0 
0 
0 
1 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 

EN 

 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EN 

13 

EN