COMMISSION STAFF WORKING DOCUMENT Accompanying document to the   REPORT FROM THE COMMISSION  Member States' replies to the Court of Auditors' 2009 Annual Report  {COM(2011)104 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 
SEC(2011)262 final 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 

REPORT FROM THE COMMISSION 

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

{COM(2011)104 final} 

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The European Court of Auditors (ECA), the EU's external auditor, provides annually a report 
containing  the  Statement  of  Assurance  (DAS)  on  the  reliability  of  the  accounts  and  the 
legality and regularity of transactions. 

On 9 November 2010, the report on the 2009 EU Budget was presented to the Council and the 
European  Parliament.  In  the  respect  of  the  Article  143  of  the  Financial  Regulation,  the 
Commission  informed  Member  States  of  the  Court's  findings  related  to  shared  management 
transactions and asked them to provide replies to the ECA's findings.  

The letter sent to Member States contained 3 annexes: 

-  Annex  I  contained  a  questionnaire  based  on  the  paragraphs  in  the  European  Court  of 
Auditors' 2009 Annual Report referring to each Member State. 

- Annex II was a questionnaire based on the findings made by the Court during missions to 
Member States, describing the nature of the error and the transaction value. 

Both annexes included questions referring to issues such as if action had been taken or not, 
the timing of any action taken, as well as issues regarding the completion of the action and 
any other comments. 

- Annex III - Annex III A and B consisted of a two part: reply to some general questions 
concerning the shared management chapters of the report and general comments concerning 
the 2009 Annual report. 

Please find below the details of the replies.  

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 
CHAPTER 2 – REVENUE  

Observation in the 2009 Annual Report 

Member State reply 

2.5 

2.9 

2.10 

2.12 

In accordance with Decision 2007/436/EC, Euratom certain Member 
States benefit from a reduced call rate for VAT3 and of a gross reduction 
in their annual GNI contribution4 for the period 2007-2013. In addition 
the United Kingdom is granted a correction in respect of budgetary 
imbalances (“the UK correction”) which involves a reduction in its 
payments of GNI own resources. 
3 Germany, the Netherlands, Austria and Sweden 
4 The Netherlands and Sweden. 

The Court carried out an assessment of supervisory and control systems 
in three Member States5 and reviewed their accounting systems for TOR. 
It examined the flow of duties from establishment to declaration to the 
Commission, in order to obtain reasonable assurance that the amounts 
recorded were accurate. The auditors checked a random sample of 30 
import declarations in each of these three Member States. 
5 Germany, Ireland and Latvia. 

Austria: Please refer to the legal bases according to the EU Own Resources 
Decision. 

Germany: No objections; this is merely the implementation of the Own Resources 
Decision. 

Germany: No objections; this merely describes the Court’s inspection activities 

Ireland: Reference 2.9 is a statement of fact: it does not request any action by 
Ireland 

Latvia: Auditors from the Court of Auditors inspected import declarations in 
Latvia, but no infringements were detected. 

For five recoveries concerning traditional own resources of the sample 
referred to in paragraph 2.7, the Court reconciled the selected monthly 
statements with the underlying accounting records of Member States6. 

Germany: No objections; this merely describes the Court’s inspection activities 

Slovenia: Slovenia was not instructed to take any action in this case. 

6 Germany, France, Italy, Slovenia and the United Kingdom. 

UK: HMRC- No action is required as the Court concluded that there was no error to 
report for the UK.  

The Court took into account the results from its specific audit carried out 
in 2008 and 2009 on simplified customs procedures for imports in nine 
Member States8. 
8 Belgium, Ireland, France, Italy, Hungary, the Netherlands, Slovenia, 
Sweden and the United Kingdom 

Belgium: There was some delay due to the reorganising of the Customs and Excise 
Administration department involved. 

France: I. - s'agissant du suivi des documents de surveillance et des licences 
d'importations dans le cadre des procédures simplifiées, afin de tenir compte des 
recommandation de la CCE, la France envisage, en attendant la dématérialisation de 
tous les documents d'ordre public actuellement à l'étude dans le cadre du GUN 
(Guichet unique national), que lesdits documents soient imputés et visés 
systématiquement par les bureaux de douane et que les documents requis au 
moment de la mise en libre pratique de la marchandise soient contrôlés par sondage 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
et pour les opérateurs identifiés comme étant à risque. 
Cette solution transitoire, qui permettra de concilier la réglementation 
communautaire en matière de commerce extérieur, et les facilités liées aux 
procédures simplifiées, est la suivante : 

L'opérateur demande à la Commission européenne via la Direction 

générale de la compétitivité, de l'industrie et des services, un document de 
surveillance communautaire (pour les produits en acier) ou une licence 
d'importation (pour certains produits en acier de Russie ou du Kazakhstan, et les 
produits textiles de Bélarus et de Corée du Nord) avant d'effectuer ses opérations de 
dédouanement ; 

Une fois le document obtenu, l'importateur est autorisé à effectuer sa 

déclaration ; 

Avant validation de sa DSI dans Delta D, le titulaire d'une PDD/PDU 

s'engage à transmettre immédiatement au bureau de douane dont il dépend, par fax 
ou courrier électronique, une copie du document de surveillance ou de la licence 
d'importation avec les quantités imputées si la DSI ne reprend pas la totalité des 
marchandises visées ; 

Lors de la validation de la DSI, l'opérateur reporte les références et la date 

du document de surveillance ou de la licence ; 

Enfin, l'opérateur s'engage à se rendre au bureau de douane pour visa des 

documents originaux, au plus tard au moment de la validation de la DCG. 
La décision administrative n° 06-056 du 27 décembre 2006, parue au BOD n° 6694 
du 29 décembre 2006 « La télé-procédure Delta D, Version 2 », sera modifiée en ce 
sens ; 
II. - s'agissant de l'anomalie relevée par les auditeurs sur la DSI n° 081801137 
relevant de la DR du Léman, (bureau de Pont d'Ain), la Cour recommande de 
rappeler à ce bureau les procédures mises en place pour l'imputation correcte des 
licences d'importation. Ce rappel a été fait par note conjointe E/1-E/3 n° 3197 du 27 
octobre 2010 ; 
III. - s'agissant des anomalies relevées au niveau des justificatifs de l'origine, la 
Cour considère que les contrôles réalisés après le dédouanement ne sont pas 
suffisamment efficaces. Elle préconise, pour remédier aux anomalies constatées, 
que la douane sensibilise les importateurs aux risques financiers d'une fausse 
déclaration d'origine préférentielle, notamment en faisant un effort de formation : 
a. - s'agissant des anomalies relevées au niveau des justificatifs de l'origine 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
préférentielle, une décision administrative (DA) n° 99-S-056 publiée au BOD 
interne n° 1482 du 19/05/1999 modifiée par la DA n° 00-S-133 du 07/12/00 publiée 
au BOD interne n° 1586 du 14/12/2000 indique de manière exhaustive la conduite à 
tenir en matière de traitement des irrégularités constatées au niveau de la validité, 
du visa, de la délivrance a posteriori, de la règle du transport direct, et plus 
largement du contrôle de la recevabilité des documents. Cette instruction est 
actuellement en cours de réécriture au sein du bureau E/1 de la DGDDI pour tenir 
compte à la fois de l'évolution réglementaire, de la réorganisation intervenue depuis 
la réforme des services d'administration générale et par conséquent de la 
redéfinition du rôle de chacun des acteurs intervenant dans la procédure de contrôle 
a posteriori des certificats d'origine préférentielle, et enfin de la dématérialisation du 
dédouanement (dans le cadre de la télé-procédure Delta, en France). Cette 
instruction prendra également davantage en compte l'analyse de risques dans le 
choix des contrôles à exercer après le dédouanement. 
En effet, la politique rénovée des contrôles privilégie le recours au contrôle a 
posteriori des documents justificatifs de l'origine au niveau des contrôles ex-post de 
1er et de 2nd niveau. L'analyse de risques vise à rassembler et à traiter l'ensemble 
des informations de diverses sources (communautaire, nationale, locale) sur les 
trafics de produits sensibles (couple pays/produit) afin de sélectionner les demandes 
de contrôle a posteriori des certificats d'origine préférentielle auprès des autorités 
étrangères émettrices. 
En effet, en matière de contrôles, la dispense de présentation systématique, au titre 
de l'article 95 du code des douanes, des documents qui accompagnent la 
marchandise importée par l'opérateur et en particulier des justificatifs de l'origine 
préférentielle, conduit les services à privilégier la procédure de contrôle a posteriori 
du caractère originaire des marchandises, sur la base des méthodes de coopération 
administrative prévues par les accords entre l'Union européenne et certains pays 
tiers partenaires et dans le cadre du SPG, au contrôle de la forme et des énonciations 
portées sur les documents d'origine, en temps réel, comme il était encore possible de 
le faire quand les déclarations d'importation étaient déposées au bureau de douane. 
Ainsi, la dématérialisation des procédures de dédouanement limite-t-elle les 
possibilités de contrôle de recevabilité des documents joints aux déclarations en 
douane dans la mesure où ils sont conservés par l'opérateur et/ou son représentant et 
non plus par l'administration des douanes. 
Si les télé-procédures Delta permettent d'identifier sur la déclaration en douane la 
présence ou non des documents d'origine préférentielle qui accompagnent les 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
marchandises importées (case n° 44), aucun élément ne permet de préjuger de la 
recevabilité du document avant sa communication effective, lors d'un contrôle ex-
post de 1er niveau (effectué par le bureau, dans les 4 mois qui suivent l'opération 
d'importation) ou de 2nd niveau (effectué par les services d'enquête, pouvant 
remonter sur 3 ans) ; 
b. - s'agissant de la sensibilisation des importateurs aux risques financiers, la 
DGDDI s'efforce de faire acquérir aux opérateurs la maîtrise des règles d'origine 
préférentielle, aussi bien au niveau de l'administration centrale (actions de 
formation des fédérations professionnelles, par exemple), qu'au niveau des services 
déconcentrés (relais des pôles d'action économique des directions régionales, 
expertises personnalisées apportées par les cellules conseil aux entreprises, actions 
de formation des entreprises en partenariat éventuellement avec les chambres de 
commerce et d'industrie). A cet égard, le plan d'action lancé par l'administration 
centrale en 2009-2010 pour la promotion du statut d'exportateur agréé pour l'origine 
préférentielle et relayé par les directions régionales dans leur budget opérationnel de 
programme, constitue l'opportunité pour les opérateurs, à l'occasion de leur 
demande de statut et de l'instruction de celle-ci, de mener en concertation avec le 
service des douanes, une étude précise et approfondie des règles d'origine 
préférentielle applicables à leurs produits en fonction de leur classement tarifaire. 
Elles peuvent ainsi sécuriser leurs opérations de commerce international pour 
l'avenir, aussi bien à l'exportation qu'à l'importation. 
Hungary: For goods approved to be released into free circulation under the 
simplified procedure, the exemption from notification provided for in 
Article 266(2)(b) of the regulation implementing the Customs Code has been 
restricted. 
Ireland: Reference 2.12 is a statement of fact: it does not request any action by 
Ireland 
Sweden: Sweden was covered by the special 2010 report to which the Court refers. 
Sweden is conducting a dialogue with the Commission under a separate procedure 
on following up the Court's report as regards Sweden and has already taken a 
number of measures to tackle the shortcomings identified by the audit. 
UK: HMRC - Pre-authorisation controls: UK accepts the comments made 
regarding Pre-authorisation controls and is in the process of producing enhanced 
guidance for officers to reflect the recommendations made in the ECA report and 
the more stringent standards applied under the revised legislation. 
Pre and post-clearance checks on declarations/ goods: The UK has taken steps to 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
address the points raised in the report and random sampling of transactions is now 
built into UK controls; additionally inland examinations are now taking place at 
Local Clearance Premises. The UK rejects the recommendation made to 
implement automatic reconciliation of simplified frontier declarations to 
supplementary declarations, the UK has previously considered the use of an 
automated reconciliation function within Customs Handling of Import and Export 
Freight for the Simplified Frontier Declaration to Supplementary Declaration but 
this was judged to be impractical in the circumstances. For example, a removal 
from warehouse may take place 10 years after the original frontier entry was made 
& an automated reconciliation would not therefore be possible as entries are only 
required to be retained for 4 years. In addition automated reconciliation is not a 
legislative requirement. 
Errors found in sample transactions: The majority of queries found by the 
Auditors in the sample transactions were later resolved without significant material 
errors. The UK has reviewed its internal processes and is in the process of 
implementing system and procedural changes to address the issues raised. 
Post-authorisation Audits: The UK has developed new standards and guidance for 
officers on the conduct and record keeping of audits. The UK has also 
implemented a 3-year rolling programme of assurance for all Customs businesses. 
Slovenia: 
Section 1 of the preliminary findings Instructions No 3/2009 which have been 
adopted for simplifying the clearance of goods also regulate the way checks are 
carried out before the authorisation is issued. 

Section 2 of the preliminary findings The Customs Administration of the 
Republic of Slovenia (CURS) is constantly increasing the proportion of 
authorisation-holders filing declarations (ZA3), but the possibility of extending this 
to all economic operators is limited (it is not for instance possible with express 
mail).  
The exemption pursuant to Article 266(2)(b) of Commission Regulation (EEC) No 
2454/93 is granted to holders of local clearance authorisations who have shown a 
high degree of reliability and a good spirit of cooperation in their dealings with 
customs offices. As a rule, the exemption is not granted immediately on issue of the 
authorisation but after the holder has displayed a high degree of reliability and 
compliance with the customs regulations for a specific period. The opinion of the 
customs office responsible for granting the exemption is obtained before the 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
authorisation is changed to this effect. It is on this basis that the exemption is 
decided. Exemptions are also regulated in the Instructions simplifying the clearance 
of goods, No 3/2009, which governs simplified procedures at national level. In 2009 
there were 363 controls of 29 holders of authorisations to use local customs 
clearance who had an exemption. This figure does not include local clearance 
authorisations for the release of goods for free circulation from type D warehouses. 
In these cases the holder is already exempted under the second subparagraph of 
Article 266(1)(b) of Commission Regulation (EEC) No 2454/93 (there are 57 
authorisations of this type). The total number of exempted holders is thus 86 of the 
222 authorised to conduct the local clearance procedure for imports.  
Section 3B 
On 27.5.2010 the General Customs Administration (GCU) sent each customs office 
a document (No 424-93/2010-1) stating that, under the simplified procedures, 
surveillance documents and import licences were to be checked and discharged 
when the goods were released for free circulation under the selected customs 
procedure. 
Section 4 
The Customs Administration carries out a number of checks on the IT systems. 
Every user wanting paperless transactions with the Customs Administration must 
first conclude an agreement to use the IT system for electronic business with the 
Customs Administration, under which the user and the Customs Administration 
define their mutual relationship. After concluding the agreement, each e-business 
user must provide digital confirmation authorising the electronic signature of 
documents on the user's behalf. The IT Section cooperates with economic operators 
in testing the exchange of electronic messages and eliminating operational problems. 
The checks in the IT sector before issue of the authorisation or renewal of the 
authorisations for simplified procedures are carried out in accordance with the 
Instructions simplifying the clearance of goods No 3/2009 of 5.5.2009 and the 
document setting out the method for renewal of the authorisations for simplified 
procedures (No 424-155/2010-1 of 5.10.2010). Until now the check has been carried 
out by a customs inspector with the requisite technical knowledge, but the Customs 
Administration will try to ensure in future that IT specialists will also participate in 
this type of check. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 
2.20 

Observation in the 2009 Annual Report 

Member State reply 
Germany: Some of the payments made were subject to reservation as a result of 
fundamentally different legal opinions on the obligation to make available the 
amounts paid. 

As in previous years10, the Court highlighted problems in the procedures 
and systems which affect the amounts included in the B accounts which 
should be remedied. These concerned in particular delayed recovery of 
duties and late making available of recovered amounts11, and unjustified 
write-off of customs duties12. 

example paragraph 4.14 of the 2008 Annual Report. 
many, Ireland, Italy and Latvia. 
many 

2.21 

In two of the Member States13 audited the national authorities were not 
able to fully justify the amounts recorded in the B statements, because 
they did not match the underlying documents. Furthermore similar 
differences were identified by the Court in its reconciliation of the A 
accounts14. 
d and Latvia. 
nd 

Ireland: In addition to issuing revised debt collection instructions, development of 
customs debt collection facilities is ongoing. Our electronic accounting system 
ensures that recovered amounts are always made available within the required time 
limits. 
Latvia: Discrepancies related to IT problems. The problems with the IT systems 
relate mainly to the period up until the end of 2007. Changes to the Central Customs 
Information System are currently being made as a result of changes to both 
European Union and national legislation. Any errors or inaccuracies found in 
software are now immediately rectified. 
The Latvian Customs Authority has established an internal procedure for managing 
the risk associated with administration of TOR. In accordance with this procedure, 
the Unit regularly checks whether the established claims and recovered amounts 
have been booked and scrutinised in a correct and timely fashion. The officer in 
charge at the TOR Administration Unit makes corrections during the reporting 
period to reduce the overdue time. 
Ireland: Ireland considers that it did fully justify the amounts recorded in the A and 
B statements. However, to improve the efficiency of the process a system to 
produce the A and B statements electronically is being developed. 

Latvia: To meet the requirements set by the Court of Auditors, on 6 January 2010 
an application was registered in the Remedy Action Request System used for 
managing changes to information systems, requesting that an option be provided for 
in the B account statements in the Central Customs Information System which 
would allow a breakdown of the B account balance to be given as at the beginning 
and end of any quarter. Following implementation of the requested changes, it will 
be possible to provide evidence that the B account balance reflects the actual 
situation. Changes permitting a breakdown of the B account balance as at the 
beginning and end of any quarter have been brought into effect in version 6.20 of 
the Central Customs Information System, which was released in 20 September 
2010. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 
2.23 

Observation in the 2009 Annual Report 
On-the-spot audits carried out by the Court revealed deficiencies in 
national customs supervision, in particular as regards the performance of 
risk analysis for the selection of traders and imports to be subject to 
customs controls16. This increases the risk of irregularities remaining 
undetected which could lead to a loss of TOR. 
16 Germany, Ireland and Latvia. 

Member State reply 
Germany: Germany takes the view that the combination of checks based on non-
automated random elements (deliberate decisions of the clearance officials) and 
checks based on instructions using risk profiles is effective. Therefore, it does not 
agree with this finding from the Court. 

Ireland: A Post-clearance Guide, with case selection criteria, issued in June 2010. 
A selection tool to further assist cases for post-clearance audit will be available in 
February 2011. An electronic manifest system to replace the existing CEMS system 
is being developed and is expected to be available in April 2012. 
Latvia: To improve the risk analysis system in relation to customs activities, work 
has commenced on introducing a risk management system integrated with customs 
procedures. A Customs Risk Management Committee was established on 14 July 
2010. Staff for the Risk Management Unit of the Inspection Department of the State 
Revenue Service’s Customs Administration are currently being recruited. It is 
anticipated that the unit will be fully staffed by the start of December. The Unit’s 
main task will be to arrange and carry out the design, implementation and 
maintenance of a risk management system integrated with customs procedures. The 
customs risk management procedure was approved by Order No 743 of the State 
Revenue Service of 6 October 2010 on risk management within the Customs 
Administration. In November 2010 a customs risks list was approved and work 
begun on a risk assessment, on the basis of which a risk mitigation plan will be 
drawn up. 
The purpose of customs risk management is to ensure that all checks performed are 
based on the results of a risk analysis, which will ensure that checks at each 
subsequent scale are based on the results of previous checks and cover all 
operational aspects, thereby resulting in a more effective use of resources. 
Greece: Following the enactment of Law 3832/2010 on the Hellenic Statistical 
System and establishment of the Hellenic Statistical Authority (ELSTAT) as an 
Independent Authority, the foundations were laid for a general improvement of 
Greece's statistical data, especially in relation to data regarding fiscal statistics and 
national accounts. The Greek statistics action plan was jointly drawn up by Eurostat 
and the Hellenic Statistical Authority (ELSTAT) in March 2010 to improve the 
quality of Greek statistics. The third pillar of that action plan relates to fiscal 
statistics. Some of the specific actions chosen have been completed in line with the 
timeframe adopted while others are still underway. One result of the adoption of 

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In its report on Greek government deficit and debt statistics ( 22 ) to the 
(Ecofin) Council, the Commission called into question the quality of 
Greek macroeconomic statistics, including those of National Accounts. 
The Commission and the Council raised doubts on the effective 
functioning of supervisory and control systems at the National Statistical 
Service of Greece, which also produces GNI data for the calculation of 
own resources. 
22 COM(2010) 1 final of 8 January 2010 and Minutes of the (Ecofin) Council 
meeting of 19 January 2010. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

2.30 

e beginning of 2009 there were ten open specific25 GNI reservations 
ng to the period 1995 to 2001. During 2009 the Commission lifted 
servations relating to Greece leaving a balance of four26 at the year end. 

pecific reservation covers discrete elements of the GNI inventory. 

26 These open reservations concern Greece and the United Kingdom and mainly 
relate to methodological and compilation aspects. 

In accordance with Decision 2007/436/EC, Euratom certain Member 
States benefit from a reduced call rate for VAT ( 3 ) and of a gross 
reduction in their annual GNI contribution ( 4 ) for the period 2007-2013. 
In addition the United Kingdom is granted a correction in respect of 
budgetary imbalances (‘the UK correction’) which involves a reduction 
in its payments of GNI own resources. 
( 3 ) Germany, the Netherlands, Austria and Sweden.  
( 4 ) The Netherlands and Sweden. 

2.5 

Table 2.1. 

Table 2.2. 

Member State reply 
this plan, as far as fiscal statistics are concerned, is that Eurostat has not expressed 
reservations about data sent as part of the excessive deficit procedure in November 
2010. 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.  
Greece: In 2003 the European Commission (Eurostat) expressed 7 reservations 
about Greece's GNI data for the 1995-2001 period, following examination of the 
Greek inventory relating to implementation of the ESA95 system. Of those 
reservations, 6 have been lifted since July 2009 while the seventh was partially 
lifted. That part of the reservation which remains outstanding relates to one aspect 
of transition from GDP(ESA95) to GNP(ESA79), and in particular the manner in 
which amortisation and depreciation for infrastructure works was calculated. 
ELSTAT has already made new calculations and is in discussions with Eurostat so 
that these calculations can be included in the national accounts system. 
UK: The UK Office of National Statistics is working very closely at all levels with 
Eurostat to address the reservations, and it is anticipated that the reservations will be 
resolved over the course of the next twelve months. 
Sweden: Like other countries, Sweden benefits from some special corrections in the 
own resources system. The Court of Auditors has not put forward any particular 
comments on this that would require a response from Sweden. 

Sweden: Like the Netherlands, Sweden benefits from a special correction in the 
own resources system. The Court has not put forward any particular comments on 
this that would require a response from Sweden. 
Belgium: Au 31/12/2009 il restait 3 réserves en suspens pour BE. 
Lettre du 26/1/2010 de la DG Budget (ref.DG BUDG/B4/MA/cp D(2010) 
ARES(2010)41537) informant BE qu’il ne restait plus qu’une réserve en suspens. 
Lettre du 5/11/2010 de la DG Budget (ref.DG BUDG/B4/MA/bb–
ARES(2010)778706) informant BE qu’il n’y a plus de réserves pour BE en ce qui 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
concerne la ressource propre TVA après ladite lettre. 
Austria: At 31 December 2009 there were five reservations in the area of VAT own 
resources, relating to the following subjects: 
Subject/ Relevant years/ Reservation made by Weighted Average Rate (concealed 
activities)/2002 – 2007/Commission 
Restriction of the right to deduct input tax for cars (calculation method, private-use 
proportion)/ 2003 – 2007/Commission 
Infringement procedure No 2007/2453 – Application of the Sixth VAT Directive 
(VAT exemptions)/2004 – 2007/Commission 
Infringement procedure No 2007/2176 – Application of the Sixth VAT Directive 
(compensation for cars)/2004 – 2007/Commission 
Compensation for SMEs (withdrawn on 31 July 2010)/2007/Austria  
Bulgaria: In so far as infringement proceedings No 2008/4368 initiated by the 
Commission against Bulgaria relate to the reservation under Chapter 2, Table 2.2, of 
Annex I to the Court of Auditors Annual Report for 2009, Bulgaria took the 
following action:  
With regard to the exemption of lawyers from VAT, Bulgaria has adopted measures 
to amend the VAT Act (State Gazette 95/2009, in force from 1 January 2010) and 
rectified the infringement.  
With regard to the situation whereby the activities of state bailiffs are not subject to 
VAT, Bulgaria is in the process of defending its legislation. In response to 
Bulgaria’s initial reply of 26 August 2009, the Commission asked for additional 
information (by letter of 4 October 2010) in the form of statistical data on the 
activities of state bailiffs. Bulgaria submitted the information requested (by letter of 
23 November 2010 (ref. 02.17-175)) and, with a view to enabling the Commission 
to carry out a fuller analysis, said that it would also submit statistical data on the 
activities of private bailiffs. This data has been provided and will be forwarded to 
the Commission by the deadline it specified, i.e. 23 December 2010. 
Czech Republic: The reservations raised by DG BUDG representatives were in 
relation to subsidiary calculations in the overall calculation of EC VAT-based own 
resources. As regards this calculation of the EC VAT-based own resources, there 
were three reservations relating to the calculation of compensation and one general 
reservation on the calculation of the weighted arithmetic average of VAT (the 
calculation is done by the Czech Statistical Office [ČSÚ]). A further five 
reservations relate to legislative inconsistencies between the VAT Directive and 
the Czech VAT Act. All reservations are in the process of being resolved. Because 

EN 

12 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
there has only been one control mission in the Czech Republic focussing on the 
methodologies used to calculate EC VAT-based own resources (carried out in 
2008 for the 2004-2006 period), it is necessary to wait until the next control 
mission, which will decide whether new methodologies introduced in calculations 
for 2009 and applied retrospectively are correct. 

Officials of the Commission’s DG Budget carried out an 
on from 10 to 
mber 2008 on the VAT bases in Cyprus for 2005 to 2007. On the basis of 

the 

n Commission's Control Report the situation as regards reservations was as 

3 
1 
1 
3 

follows: 

ations before the control  
servations  
ations lifted 
tions after report 
riot authorities (VAT Department) took a number of measures to 
he reservations made in the European Commission's report. The 
partment prepared observations on the Commission's reservations 
mmendations and sent them to the Commission on 
ber 2009, within the time laid down in Article 6 of Regulation 
/99. Therefore, up to 31 December 2009, there were three 
ons pending. In February 2010 the Commission sent a copy of the 
mmary report referred to in Article 6 of the Regulation in English 
pril 2010 in duplicate in Greek. On the basis of this report, the 
n Commission added three more reservations. There were 
e six reservations in the draft summary report. The VAT 
ent has taken additional steps and action with respect to these 
ons. On 30 April 2010 it sent a report to the European 
sion containing clarifications and comments (along with revised 
ses) concerning the observations/comments made by the 
sion in the draft summary report. That report describes in detail 
ures and actions taken by the VAT Department to remove the 
ons. Then on 16 September 2010 it sent a further report to the 
sion with details and comments on the action taken by the VAT 
ent to remove the reservation concerning new buildings. We 
oint out that the action to remove the Commission's reservations 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 

n immediately after the visit by EU inspectors in November 2008. 
action was taken in February 2010 following receipt of the draft 
y report. Several of the actions taken by the VAT Department to] 
he reservations have been completed and yielded results. 
action will continue to be taken until all the reservations have been 
he VAT Department is committed to continuing cooperation with 
pean Commission and is taking these practicable measures to 
he outstanding reservations.  

Denmark: Five reservations were registered for Danish VAT compensation as at 31 
December 2009. Three of these reservations, one of which has been lifted, concern 
compensation for passenger transport. The two other reservations concern two 
pending cases of alleged failure to fulfil Treaty obligations. 
The Commission has one reservation regarding the subsidies granted to public 
transport, taking the view that these must be included in the VAT base. During a 
verification visit to Denmark in October 2006, the Commission therefore asked 
Denmark to examine whether the subsidies granted could be regarded as being 
related to price, in which case they were to be included in the VAT base. Denmark 
immediately found that on the basis of the information available, it would be correct 
to include the subsidies. Subsequently, some uncertainty arose as to whether the 
grants are of a type that must be included in the VAT base (see ECJ ruling C-
184/00). Denmark has therefore entered a reservation from 2006, but has continued 
to include the subsidies in the VAT base. During a verification visit in January 
2010, the Commission requested that the Danish authorities document how the 
transport sector in question is organised and managed. At the same time, it entered a 
further reservation dating from 2004.  
The third reservation concerning passenger transport involved an impact assessment 
following the Cimber Air judgment on domestic flights (ECJ ruling C-382/02), but 
the Commission has subsequently lifted this reservation.  
As mentioned above, the two other reservations concern two pending cases of 
alleged failure to fulfil Treaty obligations. One concerns the Commission's 
Reasoned Opinion 2008/2147 of 23 November 2009 on VAT grouping schemes, to 
which Denmark replied by letter of 25 January 2010. The other concerns the 
Commission's Reasoned Opinion 2007/2312 of 28 January 2010 on VAT exemption 
for charities, to which Denmark replied by letter of 29 March 2010. 
Denmark has an ongoing dialogue with the Commission concerning the VAT 
reservations. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Estonia: The number of reservations established for Estonia in the table is correct 
and work to resolve them is ongoing. 
Finland: The Commission carried out an inspection in Finland from 22 to 26 March 
2010 and examined Finland's VAT-based own resources statements from 2006 to 
2008. The outstanding reservations were also discussed on this occasion and some 
of them were lifted. Before the visit there were ten reservations, but in the course of 
the inspection two were lifted and two were combined, leaving seven outstanding. 
 The Commission's reservation relating to car tax connected with VAT receipts was 
lifted during the inspection. The earlier reservation relating to the WAR calculation 
of car tax was also dropped and partially combined with the reservation on car 
compensation. The reservation concerning the tax-free sale of alcohol and tobacco 
was also lifted.  
The reservation relating to the weighted average rate, which concerns the pro rata 
calculation of non-deductibility, was discussed during the inspection. The Finnish 
authorities will carry out a more detailed analysis of the possible existence of 
taxable output by certain undertakings, so that the matter can be resolved before the 
next inspection. 
The Commission maintains its reservation concerning car tax, which relates to the 
inclusion of car tax in the average price of cars and its impact on the weighted 
average rate. The subject was discussed during the inspection and efforts to resolve 
it will continue. In the meantime the reservation remains in force.  
The most long-standing reservation is Finland's reservation concerning the Åland 
Islands, which dates from 1995. The Commission has a reservation concerning the 
Åland Islands for the years 2001 to 2008. Finland's reservation concerns the 
turnover to be used in calculating compensation, while the Commission's concerns 
the compensation for services supplied on board ships. The Commission sent 
Finland a request for payment relating to this matter on 3 June 2010, so the issue 
could be settled shortly. 
Since 2003 the Commission has had a reservation relating to travel agents. 
Infringement proceedings are under way and a decision on the case is pending. 
According to Finland's preliminary calculations, the compensation calculation could 
result in negative compensation in Finland's VAT base.  
The last two reservations – on non-profit-making organisations and VAT groups – 
are also the subject of infringement proceedings and decisions are pending. The 
Commission has issued payment requests in both cases. 

EN 

15 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Germany: The four reservations that existed on 31.12.2009 were reduced to one in 
the course of 2010. Resources were made available on 30.11.2009, 27.5.2010 and 
26.7.2010.  
Greece: In September 2010 our Department was audited by European Commission 
auditors in relation to VAT-based own resources and the number of reservations 
was reduced from 11 to 6. The Commission will announce the reduction in the 
number of reservations in a document (Notice of Results) which will be sent to our 
Department at the end of December 2010 or start of January 2011 approximately. 
Hungary:  
1. The Commission abolished the reservation in its summary report of 
16 September 2010. 
2. The Commission itself did not express its definitive point of view on this matter 
(which also concerns other states) before the ACOR meeting of 26 October 2010, at 
which it was debated. At the meeting, the majority of Member States supported the 
Commission position that 'invisible' items should be included in WAR at the 
appropriate VAT key, even though in practice these items do not generate any 
revenue. We will draw up the amended declarations to be submitted by the end of 
2010 in accordance with this position. We have asked the Central Statistical Office 
to adjust the WAR accordingly.  
3. At the Commission’s request, we asked MAHART for data on water transport for 
2005-2007, which will be included in our amended declarations to be submitted by 
the end of 2010. 
4. The Central Statistical Office has sent the new calculations for compensation for 
new passenger cars, so these calculations can now be included in the amended 
declarations to be submitted by the end of 2010. In agreement with the Commission, 
the Hungarian authorities will not calculate a positive item for used passenger cars 
for 2004-2007. In agreement with the Commission, the negative compensation item 
for used passenger cars will be calculated for 2004-2007 at the rate for private use 
(30%). On the possibility of and method for taking into consideration the open-end 
leasing of passenger cars, expert consultation is still required with the Hungarian 
Leasing Association. In the case of fuel compensation, the drawing up of a new 
methodology and database should be considered. 
Ireland: A number of reservations that applied at 31.12.2009 have already been 
lifted. It is hoped that the remaining reservations (including the one which dates 
back to 1998) can be lifted during the visit of the Commission to Ireland next year.  

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16 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Lithuania: On 5 March 2010 the Lithuanian authorities provided their observations 
on the report on the 2009 European Commission VAT own resources control visit 
to Lithuania. These observations include corrected calculations which aim to 
resolve the errors and eliminate the reservations established during the course of the 
visit. At the Commission's request, additional details were provided on 
10 May 2010 and 22 June 2010. At a meeting of the Advisory Committee on the 
Communities' Own Resources (ACOR) held on 26 October 2010, the Commission's 
representatives presented the control visit report together with Lithuania's 
observations and explanations in a summary document, in which five of the seven 
reservations were eliminated. The two remaining reservations will remain 
unresolved until the Commission's representatives have examined documents 
supporting the corrections made; however, the calculation method put forward by 
Lithuania is acceptable. 
Luxembourg: Dans l'attente d'une confirmation officielle de la part de la DG 
BUDG que les réserves TVA sont levées - rapport officiel suite à la mission de 
contrôle effectuée au Luxembourg du 23 au 26 novembre 2010.  
Malta: These reservations incorporate both reservations related to the VAT 
Department within the Ministry of Finance, the Economy and Investment, as well as 
reservations related to the National Statistics Office.  
As regards VAT reservations, action has been taken and a reply was sent in this 
regard in April 2010. It is expected that in November 2011, the European 
Commission will carry out a ‘Control Visit’ in Malta and on the basis of Malta’s 
replies and this visit, the Commission will decide whether to lift these reservations.  
With regard to the reservations that directly affect the National Statistics Office, 
continuous action is being taken with a view to having all the reservations, or the 
majority of them, lifted as soon as possible. 
Poland: Reservation with regard to flat-rate farmers. Our reservation concerns gross 
fixed-capital formation and, in respect of the weighted average rate of VAT: the 
identification of output for own final use and direct sales of farms as a share of 
household consumption, a clear presentation of the transition from public statistics 
to data presented in a report on intermediate consumption and gross fixed-capital 
formation and the identification of the domestic portion of rail transport. In 
connection with these reservations corrections have already been integrated into the 
report for 2008 and will be incorporated into the verified reports for 2004-07. The 
date on which reservations are lifted is determined by the European Commission. 

EN 

17 

EN 

 
  
ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Romania: (UCRBUE [Unit for coordination of budgetary relations with the 
European Union] ). By 31 December 2009, there had not been any checks carried 
out by the European Commission relating to Romania's Annual Declarations on the 
VAT own resource base.  
Spain: Table 2.2 of the report of the European Court of Auditors gives the two 
reservations outstanding as at 31.12.2009 in relation to VAT in Spain. One of them 
refers to travel agencies and arises from the ongoing disciplinary proceedings 
against Spanish regulations for violation of Community law (Articles 306 to 310 of 
the VAT Directive). It has still not been possible to resolve this in 2010. 
The second Spanish reservation refers to Land Registrars and is also the 
consequence of disciplinary proceedings that resulted in a judgment of the Court of 
Justice of the European Communities on 12 November 2009, which ruled that 
Spain’s application of its legislation was not in compliance with the VAT Directive. 
By means of Law 2/2010 of 1 March, the Spanish authorities amended paragraph 2 
of Article 4 of Law 37/1992 of 28 December on Value Added Tax, adding a letter c) 
establishing that the services undertaken by Land Registrars, acting as settlement 
agents in charge of a settlement office of a mortgage district, would be understood 
as taking place within the development of a business or professional activity, thus 
being subject to Value Added Tax. This new paragraph c) has been in effect since 1 
January 2010. 
During the Commission’s inspection visit of 15 to 18 March 2010, the Spanish 
authorities agreed to include compensation for the period during which the Spanish 
interpretation had deviated from the VAT Directive. On 20 April 2010, the Spanish 
authorities sent the Commission an email setting out the way in which 
compensation for each of the financial years affected would be calculated and the 
data used. The Commission lifted the reservation relating to Land Registrars in its 
inspection visit report dated 14 July 2010. 
Of the two reservations outstanding as at 31.12.2009, therefore, one of them - 
relating to Land Registrars - has now been lifted by the Commission.  
Slovakia: Three unresolved reservations on harmonised VAT base statements (as at 
31 December 2009) were lifted by means of measures adopted by the relevant 
Slovak authorities, as also noted in the European Commission summary report of 
10 September 2010 on the results and observations emerging from the 
Commission’s audit of Slovakia regarding statements of VAT resources for 2005, 
2006 and 2007. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Slovenia: The European Commission's visit in connection with VAT resources took 
place in 2007 for the period 2004-2005 and in 2010 for the period 2006-2008. The 
reservations were made in 2009 and withdrawn during the 2010 visit. Slovenia has 
in the meantime sent the Commission its findings, explanations and new 
calculations in connection with the reservations within the prescribed deadlines, but 
the new calculations for the years in question are included in the regular annual 
report on the VAT base for the previous year. During the Commission's visit in 
2010 we learned that our revised calculations had not been sent in a form compliant 
with the Commission's internal rules and therefore agreed on a more appropriate 
form which was subsequently adopted. We consider that Member States could have 
their reservations withdrawn far more quickly if they were informed beforehand of 
the procedure and technical rules.  
Sweden: : Sweden works with the Commission on an ongoing basis with a view to 
eliminating outstanding VAT reservations. In the course of 2010 VAT reservations 
arising from Åland's special tax status, Sweden's special legislation on cooperative 
flats (bostadsrätter) and economic activity in voluntary organisations were 
eliminated. As the authority responsible, the Swedish Tax Agency (Skatteverket) is 
engaged in an ongoing dialogue with the Commission on outstanding reservations, 
particularly after the last inspection. Sweden intends to pursue its efforts, focusing 
particularly on the reservations that have existed longest. 
UK: The UK has entered into correspondence with the Commission as regards the 
outstanding VAT reservations and both parties have agreed to resolve them on an 
ongoing basis. It is the aim that the majority will be cleared either before or during 
the next Commission visit to the UK (due in November 2012). 

Annex 2.4 

Estonia: Estonia sent a letter concerning the major changes to the National 
Accounts in 2009 to the Director-General of Eurostat, Mr Radermacher, on 16 
February 2010. 
Germany: The Commission agreed with Germany that additional traditional own 
resources were not due.  
Greece: ELSTAT is in discussions with Eurostat about lifting the last remaining 
reservation concerning GNI data for the 1995-2001 period. 

Malta: Although the Report by the Court of Auditors states that Malta sent an 
official letter (regarding the National Accounts) after the established deadline, the 
National Statistics Office maintains that it always sent its letters within the 

EN 

19 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
stipulated time. 

CHAPTER 3 – AGRICULTURE AND NATURAL RESOURCES  

EN 

20 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 
3.17 

Observation in the 2009 Annual Report 

Member State reply 
Germany: No response necessary. Point 3.17 of the report only describes the 
Court’s audit approach.  

The Court’s overall audit approach and methodology is 
described in Part 2 of Annex 1.1. For the audit of policy group 
Agriculture and Natural Resources the following specific points 
should be noted:  
- a sample of 241 payments was tested,- the assessment of 
supervisory and control systems covered for EAGF selected 
paying agencies in four Member States applying the SAPS — 
Cyprus, Latvia, Lithuania and Slovakia — and in four Member 
States applying the SPS: Malta, Greece, Italy (Emilia-
Romagna) and Spain (Basque Country). Additionally, in the 
case of Malta the audit covered the allocation of entitlements 
following the introduction of SPS in 2007. For Rural 
Development expenditure, the Court tested the supervisory and 
control systems in Austria, Germany (Bavaria), United 
Kingdom (England), Greece, Czech Republic, Romania, 
Bulgaria and France. For Health and Consumer Protection the 
Court audited supervisory and control systems relating to the 
animal disease eradication and monitoring programmes, 
 - as regards cross compliance, when auditing area related 
payments the Court limits its testing to GAEC obligations 
(minimum soil cover, encroachment of unwanted vegetation) 
for which evidence can be obtained and a conclusion reached at 
the time of the audit visit. Certain statutory management 
requirements (protection of groundwater and soil against 
pollution, animal identification and animal welfare) were tested 
in respect of EAFRD payments. Furthermore, in the context of 
its IACS systems audits the Court has analysed the 
implementation at national level of the GAEC standards and the 
control systems put in place by the Member States, 
- in addition, in order to assess the basis for the Commission’s 
financial clearance decisions the Court reviewed 60 of the 
certification bodies’ certificates and reports related to 54 paying 
agencies ( 19 ). 

( 19 ) The number of paying agencies included in the DAS sample 

Italy: A decision now being adopted, which was examined during the meeting of 
the Committee on the agricultural funds of 17 December 2010, approves the 
accounts of the AGEA and ARBEA paying agencies. The accounts of the other 
Italian paying agencies were approved in April 2010. 
Latvia: Audit No 1008468LV02-09AA-PF3455 of the reliability and inspections of 
the SAPS/IACS control mechanisms in Latvia (Council Regulation (EC) No 
1782/2003 of 29 September 2003) and Audit No 1005587LV01-09PP/BB of the 
reliability and inspections of the SAPS/IACS control mechanisms in Latvia 
(Council Regulation (EC) No 1782/2003 of 29 September 2003). 

EN 

21 

EN 

 
  
 
 
ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

 3.33 

3.37 

amounted to 56 for EAGF and seven for EAFRD. However, for three 
paying agencies (two for EAGF and one for EAFRD) no report and 
certificate were submitted in due time by the competent certification 
bodies, and thus no review was performed. For the same reason the 
Commission disjoined the accounts of these three paying agencies. 

For its 2009 audit of eight paying agencies, the Court found the 
systems to be effective in ensuring the regularity of payments 
in only one agency, partially effective in four agencies, and 
ineffective in the remaining three (Greece, Cyprus and Malta). 

The Land Parcel Identification System (LPIS) is a database in 
which all the agricultural area (reference parcels) of the 
Member State is recorded. The Court found significant 
deficiencies of LPIS in three Member States that affect the 
effectiveness of administrative cross checks as illustrated 

Member State reply 
Slovakia: The certification report relating to the 2009 financial year for the PPA 
was sent to the Commission on 1 February 2010. PPA accounts for the 2009 
financial year may be proposed for clearance only on this basis. The accounts 
clearance decision for 2009 was sent by letter to the Commission on 12 April 2010. 
The decision also covered the EAGF and EAFRD. 

Cyprus: In connection with the European Commission inspections on the claim 
years 2005-2007 and 2008, KOAP (the Cyprus Agricultural Paying Agency) 
calculated the risk to which the Fund was exposed and notified the Commission 
accordingly. Following discussions, the Commission issued decisions on the 
financial correction to be imposed on Cyprus for the years in question. In addition, 
all the observations by the inspectors from both the Commission and the Court of 
Auditors have been taken into account and acted on in the form of improvements 
and corrections to KOAP's procedures and systems. 
Greece: Payments from applications made in 2009 are being made based on the 
new LPIS developed as part of the action plan agreed with the European 
Commission after the necessary cross checks are carried out. 
Malta: This is a case where action needs to be taken and is being taken on a 
continuous basis. The Malta Paying Agency is taking action on a continuous basis 
and implements the recommendations made to it by various Audit Organs (Entities) 
which audit its operations. This, together with other initiatives undertaken by the 
Paying Agency, contributes to the effectiveness of the systems that ensure the 
regularity of payments. 
Cyprus: In connection with the European Commission inspection on the 2008 claim 
year, KOAP calculated the risk to which the Fund was exposed in respect of 2008, 
using the GIS-PIRS eligible areas as revised on the basis of the 2008 ortho-photos. 
The calculation was accepted by the Commission and a correspnding financial 
correction will be imposed on Cyprus accordingly.  

EN 

22 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Greece: The LPIS has been fully operational since 16.2.2010 (Regulation (EC) No 
25/2010).  

hereunder: 
LPIS-GIS technology became mandatory in 2005. In Greece 
until and including the claim year 2008 the LPIS-GIS did not 
contain any graphical information (ortho-photos) showing the 
actual eligible area of the reference parcels recorded. LPIS-GIS 
was still not fully operational for carrying out the necessary 
cross-checks as of December 2009. In Lithuania the Court 
found that the authorities failed to eliminate ineligible features 
of a total area of 13 700 ha from the eligible area of parcels 
recorded to be 100 % eligible in the LPIS. In Cyprus new 
ortho-photos were taken and analysed in 2008. The analysis 
showed that more than 39 000 reference parcels were affected 
by changes of land use and as a result the area eligible to SAPS 
aid dropped by more than 7 000 ha (i.e. 5 % of the agricultural 
area). Although updated information was available, the Cypriot 
authorities decided to base payments for claim year 2008 on the 
outdated 2003 ortho-photos. 
 The Court also found in two Member States (Italy, Spain) that 
the most recent ortho-photos available were not used for 
capping the eligible areas for calculating the payments. 
In Italy (Emilia Romagna) and Spain (Basque Country) the 
eligibility rate for poor pasture land is not based on the most recent 
information available (ortho-photos or on-the- spot inspection) but 
on what the farmer had claimed before SPS was introduced. In the 
cases examined, both Italian and Spanish farmers were allowed to 
claim the higher historical eligibility rate for poor pasture land 
which on the latest ortho-photos shows significantly lower 
eligibility rates. Differences have lead to granting aid for 
significantly more than the actual eligible area. 

3.38  

 Italy:  Some time ago, following Commission recommendations, Italy introduced a 
procedure for areas recorded as woodland but in fact used for livestock farming. In 
this connection, and also following the application of "Refresh", precise rules were 
established for the treatment of such areas. These rules were fully explained and 
sent to the ECA auditors. The deductions made are disputed as a large area of Italy 
is used for pastureland, which is, moreover, located in less-favoured areas where 
this is often the only practicable form of farming. Italy inspects an additional 
sample in such cases, going well beyond the 5% required by the relevant provisions.  
Every year, on the basis of the surface area of poor pastureland combined with 
ordinary entitlements including areas identified by the GIS as woodland, an 
additional 5% sample is checked if those areas are known to be "historical 
pastureland" (pastureland declared for CAP applications in 2000 to 2004). In this 
case the on-the-spot verification restores to the system the real area found to be 
useable as pastureland by the expert inspector. This is taken as the reference area for 
the payment. If the area declared as poor pastureland and shown as woodland on the 
GIS is not historically known to the Administration, the sample checked is 100%. 
The results are taken as the reference data for the payment.  

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23 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Spain: The grazing coefficients used in the plots, which the Court calls ‘historical 
rates’, come from the useful areas that farmers used to be able to declare to receive 
aid, according to the percentages of grazing area in shrubby pasture or wooded 
pasture, once the areas corresponding to the trees and shrubs within the plots when 
they were first declared have been deducted. These percentages used to be 
established in annually published Royal Decrees. Subsequently, with on-the-spot 
verifications, as well as at the request of the farmer himself if he was authorised to 
make the request for aid, these have gradually been amended. The changes in the 
grazing coefficient rates reflect the updating that takes place primarily through on-
the-spot inspections. In addition, SIGPAC was established in the Autonomous 
Community of the Basque Country, as it was across the rest of Spain, in 2005, on 
the basis of an ortho-photo from 2002 and on land registry data existing at that time. 
The ortho-photo was updated for the first time four years later and, for the 2008 
request, the existing ortho-photo dated from 2006. 
When the 2008 ortho-photo was received, in the first quarter of 2009, an updating 
of uses was commenced, i.e. with the task of identifying changes and demarcating 
new reference parcels (recintos) and other changes, on the basis of this ortho-photo, 
anticipating completion for the whole of the Basque Country by the 2011 season. 
The information updated during 2009 can be seen on the fixed photo from Visor 
SIGPAC in 2010. The updating of the whole area of the Autonomous Community 
of the Basque Country using each ortho-photo is undertaken over the two-year 
period between ortho-photos such that the updating of the 2008 ortho-photo will be 
completed during this year, 2010, and, when the 2010 ortho-photo is received, a 
further updating will take place over the years 2011 and 2012.Following the 
updating of the 2008 ortho-photo, an assessment of the impact of changes in the 
admissible areas on previous payments was commenced, as a result of the SIGPAC 
updating. (*) This action takes place every two years, as SIGPAC is updated. 
Cyprus: KOAP embarked on and completed work to improve its computer systems 
immediately after the first Court of Auditors visit in July 2009.  The systems are 
now capable of identifying the type of amendments or corrections and the time 
when they were made and of requiring claims to be amended using a special 
procedure that complies with the legislation. 
Greece: From the application year 2006, an ‘administrative operations’ software 
program has been installed on the Paying Agency’s computer system which is used 
to make any changes to the Single Aid Applications, after all the relevant 
supporting documents have been checked. These changes relate to corrections of 

24 

EN 

3.39 

EN 

The Court has observed in several Member States (Cyprus, 
Greece, Italy, Slovakia and Lithuania) that the claim database 
did not allow the nature and timing of modifications or 
corrections made to be identified. In the absence of a reliable 
audit trail the Court cannot assess the correct application of EU 
penalties. In Greece the bulk of administrative cross checks and 
of the necessary corrections of the claim data is carried out 
under a procedure that leaves no audit trail and does not lead to 
the application of penalties. In Cyprus conf licting informa- 

 
  
 
ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
blatant errors, which is why no penalties are imposed. Consequently, it is clear that 
there is an audit trail relating to the timing of corrections made. 

tion regarding dates and content of amendments of claims was 
shown on the paper claim and in the database. 

3.40 

A reliable entitlements database is a prerequisite for correct 
SPS payments. Member States are also required to respect the 
overall national ceilings both for SPS and SAPS. The Court 
found a ceiling overshoot (Cyprus) although this did not affect 
the EU budget; and an inaccurate allocation of entitlements 
(Malta). 
When Malta introduced SPS in 2007 all livestock or dairy 
farmers were allocated special entitlements including those who 
held eligible hectares which is contrary to EU legislation. EU 
legislation exempted Malta from the requirement that the 
claimant has to maintain at least 50 % of the historical animal 
raising activity in order to receive payment for a special 
entitlement. Malta decided not to set any minimum livestock 
requirements at national level for activation of special 
entitlements. Hence, farmers who significantly reduced their 
herd after the introduction of SPS remain eligible and are paid 
in full for their special entitlements. Cyprus exceeded the 
ceiling for EU SAPS aid by 1,44 %. The Cypriot authorities 
failed to apply a proportional reduction. As a result all 
individual payments were affected by a 1,44 % overpayment 
although this was financed by national rather than the EU 

Lithuania: Taking into account the audit observations, an option has been enabled 
within the application data base (STIS - Simplified Direct Payments Information 
System) to trace initially declared data.  

Slovakia: This finding corresponds to one of the findings in Annex 2 – ‘No audit 
trail for modifications in claim database’. On this shortcoming the ECA asked the 
PPA for a list of claimants with the obvious errors corrected. The PPA did not have 
a summary list. Detailed procedures for correcting obvious errors are available and 
were provided to the auditors during the mission. Since a record of corrections of 
obvious errors is kept in the IACS system, used to program the creation of a 
summary overview of obvious errors since 2004. 
Cyprus: The recoveries will be executed in conjunction with the 2010 payments, so 
that (where possible) the recovery can be offset against the payments. 

Malta: Malta has changed its national law. In fact, the Single Payment Scheme 
Regulations (L.N. 151/08) were amended to enable the introduction of the new 
procedure and to avoid paying aid to farmers who are leaving the sector. 
The rules that Malta has adopted emphasise that farmers must continue producing 
50% of the milk or beef production associated with the amount of entitlements 
activated in that year. 
The farmers must follow this procedure starting with the applications for 2011. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 

budget. 

3.41 

With regard to the correctness of payments, the Court found 
substantial deficiencies in one Member State leading to cases of 
forest claimed as permanent pasture (Greece). Moreover, 
Greece continues to allow the claimed area to exceed the 
eligible area of the reference parcel as recorded in the LPIS by 
applying a tolerance margin of 5 % not foreseen in the 
regulation. This observation was already reported by the Court 
in 2005. Furthermore, the Court found cases of payments to 
beneficiaries being made without known anomalies having 
been resolved (Italy) and without cross- checking the area 
claimed against the eligible area recorded in LPIS (Spain). In 
addition, examples were found of systematic incorrect 
calculation of aid and inadequate application of area and late 
claim penalties. 
In Greece, areas recorded as forest in the LPIS were claimed as 
permanent pasture and benefited from SPS, although the ortho-
photos clearly show a significant density of trees and rocks. 
Furthermore, Greece was found to systematically calculate SPS 
incorrectly in cases where the area determined is insufficient 

Cyprus: In connection with the European Commission inspection on the claim years 
2005-2007 and 2008, KOAP (the Cyprus Agricultural Paying Agency) calculated 
the risk to which the Fund was exposed and notified the Commission accordingly. 
Following discussions, the Commission issued decisions on the financial correction 
to be imposed on Cyprus for the years in question. In addition, all the observations 
by the inspectors from both the Commission and the Court of Auditors have been 
taken into account and acted on in the form of improvements and corrections to 
KOAP's procedures and systems. As regards the 2008 claim year, the penalties for 
parcels claimed twice (the audit finding for 2008 relating only to duplicate claims) 
were imposed on all the applicants concerned without allowing them to withdraw 
the parcels from their claim, except where applicants themselves had already 
withdrawn a parcel before being notified by the Paying Agency that an irregularity 
had been found in their claim. 
Greece: From the 2008 applications year onwards, the 5% tolerance margin has not 
been used, following observations made by the European Commission on this 
matter. As far as the use of forested areas capable of being used for pasture -and 
which are in fact used as pastures- is concerned, we are in the process of clarifying 
these land uses on the basis of the relevant legislation.  

EN 

26 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

for payment of all entitlements claimed by the farmer and 
where these entitlements are of different unit values. A similar 
problem was observed in Malta where in one case the incorrect 
calculation method led to an overpayment of 69 %. In Cyprus 
overdeclaration penalties provided for in EU legislation were 
not applied in 2007 and in 2008 they were applied incorrectly. 

Member State reply 
Italy: We contest in their entirety the comments concerning payments made without 
cross checks against the area declared, since AGREA carries out all the 
administrative checks to verify admissibility and resolve anomalies before payments 
are made, finding a number of anomalies and making the results of its checks 
available to the farmers via the CAAs [Agricultural Assistance Centres]. From then 
on no further requests for correction under Article 68(2) of Regulation (EC) No 
796/2004 are taken into consideration. Every payment authorised takes account of 
the anomalies and, where appropriate, the relevant penalty or reduction is applied. 
The statements of correction cited by the auditors are the records of corrections of 
the anomalies. Various corrections in fact consist in accepting the figure proposed 
by the administration. In such cases the producers merely reduce the surface area to 
the figure notified by the administration. Such corrections have no effect on the 
payments. Furthermore, the anomaly is registered for all the areas which form part 
of a given crop group. Therefore, in the case of some applications which are 
recorded as subject to correction, the cadastral anomalies concerned will never be 
corrected because they have been accepted as they stand by the beneficiaries 
concerned. In some cases (where the producer has more land available than he holds 
entitlements for), the area without anomalies is sufficient to pay the entire premium 
requested. Even if the anomalies were resolved they would not give rise to any 
additional payment. At the same time, the system applied is based on maximum 
transparency for farmers and provides them with this information so that they can 
take account of it when drawing up new administrative procedural documents. To 
accelerate the correction procedure, starting in 2009 AGREA improved the 
computerised system by making it possible to waive a correction if the farmer 
accepts the figure registered by the administration.  

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27 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Malta: The Information Technology system (IT) has been modified so that the 
paying procedure starts with the fees that are highest in value, with the reduced area 
taken into consideration in the first instance and then the payment area. This means 
that farmers subject to penalties will see a reduction in the entitlements with the 
highest value. 

Spain: This is why a verification system was created when the declared plots were 
recorded. The system works on the basis of the SIGPAC cadastral map, which the 
Basque Government provides to the Vizcaya Regional Government at the start of 
the season. The checks conducted confirm the existence of the plot in SIGPAC, and 
verify the areas. 
- Verification of the existence of the plot in SIGPAC. The recording of reference 
parcels that are not in SIGPAC is not permitted. 
- Area check. The recording of farming areas that exceed the value allocated to the 
declared reference parcel by SIGPAC is not permitted. 
- Verification of the crops declared in relation to the use recognised by SIGPAC for 
the declared reference parcel. Until the 2008 season, this check was only conducted 
in on-the-spot inspections and in the observations that the declarants submitted to 
SIGPAC. 
These actions are more widely reflected in paragraph 2.2.1 of the reply sent by 
Spain to the Court in May 2010. 
* (Lantik petition document 28559/2008) 
Germany: The authorising bodies (rural development offices) were informed of the 
audit finding by ministerial letter No E 5/a-0102.8-1220II dated 28.7.2010. In 
addition, the calculation of the reduction was automated through integration into the 
VAIF IT application. This ensures correct calculation of the reduction (see same 
response in Annex II No 09.SYS.T05.NR2.1601). 

The audit found errors in the determination of the exchange rate 
used to convert to euro amounts of aid paid in national 
currencies (United-Kingdom, Czech Republic), and weaknesses 
in the calculation of aid reductions following on-the-spot 
checks (Germany (Bavaria)). Weaknesses were also found in 

28 

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3.43 

EN 

 
  
 
ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

the technical checks on reduction of nitrate pollution (Greece) 
and compliance with a specific eligibility condition such as 
adequacy of agricultural machinery relative to the land farmed 
(Bulgaria). 

3.45 

In EAGF, the Court identified cases of incorrect application of 
measurement tolerances (Malta, Italy), inadequate quality and 
insufficient coverage of on-the-spot inspections (Greece). 
In Greece, the audit found that on-the-spot inspections did not 
always meet the legal requirement to measure at least 50 % of 
parcels and grassland was generally not or only visually 
inspected. In several cases examined by the Court, claimed 
parcels which according to the ortho-photos consisted of forest 
or bushland were not included in the sample of parcels 
inspected on the spot. In addition, in several inspection reports 
analysed by the Court the geographical coordinates reported for 
the parcel measured on the spot did not match with the 
locations of the digitised parcel in the LPIS-GIS (different 
locations, different uses, different shape and perimeter). 

Member State reply 
Greece: Administrative checks are carried out based on the fertiliser purchase 
receipts and the soil testing laboratory results (5%). The max. and min. nitrate usage 
values have been set in the programme guidelines. 

UK: The exchange rate applied to the expenditure for the December 2008 
transactions was incorrect because the system picked up the exchange rate from the 
last working day of the previous month not the correct exchange rate of the 
penultimate day of the month. This occurred because the last day of the month fell 
at the weekend. The error was identified and a system fix implemented. In order to 
correct the over declarations of expenditure it was agreed that the balance would be 
netted off a subsequent Annex XI expenditure return. The ledger was corrected in 
the period 1-15 October 2009. 
Greece: The guidelines for carrying out on-the-spot inspections state that at least 
50% of agricultural parcels may be checked for each aid regime, starting from the 
largest agricultural parcels in order to cover a greater percentage of the area, up to 
80%. As far as pastures are concerned, given that they usually cover entire ilots, on-
the-spot inspections are carried out by recording the coordinates to verify the 
declared area, and measurements are made using the GIS tool on the system. 

Italy: We confirm that as from 2009 technical tolerance has been applied in Italy in 
accordance with the EU provisions in force.  

Malta: Malta made immediate changes to the procedure regarding measurement 
tolerances during the audit period. The 2008 Payments were revised according to 
the revised methodology and the difference in payment is being recovered from the 
2010 payments. The 2009 payments were made correctly. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 
3.46 

Observation in the 2009 Annual Report 

In EAFRD, the Court found weaknesses concerning precision 
and completeness of control reports (Germany (Bavaria), 
Romania), the global evaluation of the results of the controls 
(Bulgaria) and the respect of deadlines for reporting to the 
commission on the controls carried out (Germany (Bavaria), 
France).  

Member State reply 
Bulgaria: The DFZ and Paying Agency confirm that they are aware of their 
obligation under Article 27(4) of Commission Regulation (EC) No 1975/2006 to 
evaluate the results of on-the-spot checks to establish whether problems of a 
systemic character exist and what can be done to correct them. During the checks 
we carried out concerning the grounds that exist for the reductions made in respect 
of individual projects at the end of 2009, it was found that: • the comprehensive 
rejections of requests for payment that had been submitted were based on findings 
made during the administrative checks; • the partial reductions made on the basis of 
the findings of on-the-spot checks relate to only 16 projects. This confirms that 
there is far too little data available at present to be able to carry out the necessary 
evaluation and classify a particular error as systemic. It is necessary to accumulate a 
larger population in order to be able to identify recurrences and systematise error 
types, with a view to adopting measures and decisions related to risk management. 
The DFZ-PA has undertaken to carry out an evaluation by 31 December 2010. 

Germany: Regarding the precision and completeness of inspection reports: 
The authorising bodies (rural development offices) were informed by ministerial 
letter No E 5/a-0102.8-1220IIdated 28.7.2010 that on-the-spot checks must be 
documented in such a way that they can be understood by third parties. In addition, 
the on-the-spot audit report was revised and sent to the competent bodies by 
ministerial letter No E 5/a 7556-910 dated 4.8.2010 (see same response in Annex 
II No 09.SYS.T05.NR2.1601). 
Regarding the meeting of deadlines: 
The forms for 2008 were much more extensive. Consequently, major changes and 
additions to the IT evaluation program were required, which made it impossible to 
produce the statistics by the deadline. The European Commission was informed of 
this in time. 
The statistics for 2009 were sent to BLE on 28.7.2010 to be forwarded to the 
Commission.  

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Romania: (APDRP) 
Under the Payments Authorisation Procedure, version 12 (currently in force), AP 
Stage 1, and under the previous versions of the Procedure, for the EAFRD 
Programme: 
‘The result of the technical and financial verification of expenditure is recorded in 
Technical and Financial Checklist AP 1.5, in the SVCP [Payment Claims 
Verification Service]/SVT [Technical Verification Service] Report AP 1.6 on 
verification of the payment claim file [DCP] and in the Annex to SVCP/SVT Report 
AP 1.6, Checklist AP 1.5 and Annex 2 to SVCP/SVT Report AP 1.6. 
The SVCP-OJPDRP [County Paying Office]/SVT experts will indicate the result of 
the check carried out during the field visit and the result of the verification of the 
payment claim file in the SVCP-OJPDRP/SVT Report on the AP 1.6 DCP 
verification. The experts will also indicate the grounds for rejecting the payment of 
expenditure covered by the payment claim (for example: the state of the works, the 
article, price, quantity and grounds for rejection), the 
differences/irregularities/discrepancies identified and will provide a detailed 
account of the method used to check expenditure covered by the payment claim. 
During the field visit, the experts will complete the Annexes to Report AP 1.6 and 
will indicate under the heading ‘Checks performed’ in Report AP 1.6 the points 
where measurements were taken using the measuring instruments with which the 
experts were equipped and the instruments with which the measurements were 
taken. In the case of hidden works where it is not possible to carry out a detailed 
check (i.e. visual, based on measurements, etc.), the experts perform a document 
analysis of the works records and indicate the works under the heading ‘Checks 
performed’ in Report AP 1.6. When filling out Annex 1 to Report AP 1.6, the 
experts will indicate the quantities and types of works proposed under the project in 
the office. After the field measurements have been taken, the experts will then 
indicate in the report the quantities actually carried out. The items to be checked, as 
listed in the form, are for information purposes, as the sheet can be adapted by the 
SVCP/SVT experts depending on the specific features of each project.’ 
We therefore consider that the procedures put in place by APDRP ensure that on-
the-spot check reports are completed in detail. 

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31 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 
3.5 

Observation in the 2009 Annual Report 

Member State reply 
Hungary: Decree No 34/2010 of the Ministry of Agriculture and Rural 
Development of 9 April 2010 laid down the ‘standard rules of procedure for 
granting certain aid funded from the European Agricultural Guarantee Fund, the 
European Agricultural Fund for Rural Development and the central budget in 2010’. 

Latvia: Audit No 1008468LV02-09AA-PF3455 of the reliability and inspections of 
the SAPS/IACS control mechanisms in Latvia (Council Regulation (EC) No 
1782/2003 of 29 September 2003) and Audit No 1005587LV01-09PP/BB of the 
reliability and inspections of the SAPS/IACS control mechanisms in Latvia 
(Council Regulation (EC) No 1782/2003 of 29 September 2003). 

Poland: The European Court of Auditors' Annual Report concerning the financial 
year 2009 did not identify any irregularities involving Poland  

The main measures financed by EAGF are: 
 - The direct aid scheme ‘Single Payment Scheme’ (SPS) which 
was introduced in order to decouple the payments made to 
farmers from production (‘decoupling’). To qualify under the 
SPS farmers must first obtain ‘entitlements’ ( 4 ) each of which, 
together with one hectare of eligible land declared by the 
farmer, gives rise to an SPS payment at least until 2013 ( 5 ). SPS 
has been growing in importance and in 2009 represented 28 
806 million euro of expenditure. 
 - The direct aid scheme ‘Single Area Payment Scheme’ 
(SAPS) which provides for the payment of uniform amounts 
per eligible hectare of agricultural land. SAPS is currently 
applied in ten of the new Member States (6) and in 2009 
accounted for 3 723 million euro of expenditure.  
- Other direct aid schemes (coupled payments) designed to 
maintain production in areas which would otherwise be at risk 
of abandonment of production. The amounts involved, which in 
general are declining due to further decoupling and integration 
of other support schemes in the SPS, accounted for 6 585 
million euro of expenditure.  
- Interventions in agricultural markets: the principal measures 
are intervention, storage and export refunds and other measures 
such as specific support for the wine, fruit and vegetable and 
food programmes (in total amounting to 3 988 million euro) 
and Sugar Restructuring Fund (3 018 million euro). 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Slovakia: The ‘single payment scheme’ (SPS) system of direct support will be 
applied in the new EU Member States after 2013. The 'single area payment scheme’ 
(SAPS) will also be applied in Slovakia until 2013. The SPS system was introduced 
with the aim of separating payments from production (‘decoupling’) so that farmers 
eligible for support under SPS must first acquire ‘entitlements’ which will be 
established for Slovakia in 2012. The importance of the direct payments/direct 
support system is growing year on year and in 2009 it represented total expenditure 
of EUR 364 106 622. 

(4) The number and value of each farmer's entitlement was calculated 
by the national authorities according to one of the models provided for 
under EU legislation. Under the historical model each farmer is 
granted entitlements based on the average amount of aid received and 
area farmed during the reference period 2000 to 2002. Under the 
regional model all entitlements of a region have the same flat-rate 
value and the farmer is allocated an entitlement for every eligible 
hectare declared in the first year of application. The hybrid model 
combines the historical element with a flat rate amount and, if it is 
dynamic, the historical component decreases each year until it 
becomes a predominantly flat rate-system.  
( 5 ) Based on Article 137 of Council Regulation (EC) No 73/2009 (OJ 
L 30, 31.1.2009, p. 16), payment entitlements allocated to farmers 
before 1 January 2009 shall be deemed legal and regular as from 1 
January 2010, except in cases of allocation on the basis of factually 
incorrect applications unless the farmer could not reasonably have 
detected the error.  
(6) Bulgaria, Czech Republic, Estonia, Cyprus, Latvia, Lithuania, 
Hungary, Poland, Romania and Slovakia. 
The AAR of the Director General for Agriculture contains a 
reservation in respect of the expenditure under the IACS in 
Bulgaria and Romania. Whilst those reservations are consistent 
with the results of the Court’s systems audit carried out in 2008, 
the Court reiterates its previous observation that it was premature 
to lift the long standing reservation in respect of IACS in Greece. 

3.68 

Bulgaria: 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. 
The key steps taken to update the Land Parcel Utilisation [sic] System (LPIS) with a 
view to improving the functioning of IACS, the administration of direct payment 
schemes and the of direct payment schemes and the monitoring of the lawful 
payment of subsidies under those scheme are as follows: 
- an ‘eligibility layer’ has been created which, within a given reference parcel or 
physical block in the LPIS, determines in geographical terms the areas that are 
eligible for support under the single area payment scheme (SAPS). The Paying 
Agency (PA) performs administrative cross-checks and makes payments on the 
basis of current data in the SAPS, including the ‘eligibility layer'; 
- the digital orthophotomap is being updated, and this should be completed by the 
end of 2011. For the 2009 campaign, updating was performed by obtaining and 
processing satellite images from 2009 covering some 42 500 km2 (38.3% of the 
total area of the country) Full map sheets (4x4 km) cover 40.25% of the country’s 
agricultural area and 23.88% of the non-agricultural area. In 2010 and 2011, 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
updating will be performed on the basis of new aerial photographs covering 100% 
of the country’s territory. 

Annex 3.2 

Greece: Since 2009, the IACS has been fully operational in Greece and meets the 
requirements laid down in Community Regulations. 
Romania: (APIA) 
The Certifying Body issued an opinion without reservations on the Declaration of 
assurance, but it highlighted the low level of implementation of the 
recommendations of the internal and external audits. As a result, 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. 
With regard to the reservations expressed by the Certifying Body in the Report for 
2009, APIA has made efforts and has achieved significant progress in implementing 
the measures set out in the IACS Action Plan and the recommendations of the 
Certifying Body. 
In 2009 Romania also established, together with representatives of the European 
Commission, the Action Plan to remedy deficiencies in IACS. The actions included 
in the Plan will be finalised in 2011.  
Compliance with the Plan was monitored by Commission audit missions and reports 
produced on a quarterly basis or at the request of the Commission 
 Czech Republic: Not applicable – no reservation. These systems were assessed 
deliberately during the assessment of the selected supervision and control systems for 
Rural Development in the Czech Republic.  
France: Suite à l'audit de la CCUE de mars 2010 sur la DAS 2009 en Ille-et-
Vilaine et dans l'Ain, plusieurs mesures ont été prises par les autorités françaises.  
- Sur la question de l'ICHN, l'ASP a initié l'établissement d'un fichier 
d’identification des bénéficiaires potentiellement concernés par l'ICHN à partir des 
données Osiris 2007, 2008 et 2009. L’objectif est d’extraire les bénéficiaires qui 
n’apparaissent pas pendant 5 ans de suite. Cette liste a été ensuite communiquée aux 
services déconcentrés de l’Etat pour expertise complémentaire. En effet, en cas de 
changement de forme juridique au cours des 5 ans, il est nécessaire d’associer les 
services des directions départementales des territoires afin de faire le lien entre deux 
correspondre à un bénéficiaire unique. A l'heure actuelle le travail se poursuit afin 
de certifier les données extraites. Le fichier devrait être opérationnel à la mi 2011. 
- Au sujet de la récupération des informations relatives aux déclarations de revenus 
aux fins d'instruction des demandes d'aides conditionnées par les revenus, la Loi de 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Modernisation de l'Agriculture de juillet 2010 dispose que la transmission de ces 
données entre ministère sera effective dès 2011. 
Le décret d'application est en préparation pour entrée dénominations distinctes mais 
qui peuvent en application en 2011. 

Germany: No response necessary as the table provides an overview of the results of 
the Court’s audits.  

Latvia: Audit No 1008468LV02-09AA-PF3455 of the reliability and inspections of 
the SAPS/IACS control mechanisms in Latvia (Council Regulation (EC) No 
1782/2003 of 29 September 2003) and Audit No 1005587LV01-09PP/BB of the 
reliability and inspections of the SAPS/IACS control mechanisms in Latvia 
(Council Regulation (EC) No 1782/2003 of 29 September 2003).  
Malta: The said annex is a summary of the results of the examination of the system; 
in fact the Report of the Court of Auditors states that ‘The Court’s principal audit 
findings are outlined in the following paragraphs. The results of the examination of 
the systems are summarised in Annex 3.2’. Malta has already explained how it 
addressed / is addressing these results, inter alia, in the replies to number 3.40, 3.41, 
and the rest. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Romania: (APDRP) 
Given that payments to beneficiaries under the SAPARD Programme were finalised 
in 2009, the payment claims verified in 2008 (second half of the year) and 2009 
were made on the basis of amendments to the Payments Authorisation Procedure in 
accordance with the Commission's recommendations in Letter CE AGRI D/16859 
of 9 July 2008, which were included in Instruction 118/2009 (approved by the 
Commission), which involved the following: 
- supplementing the procedure by the addition of provisions on the details to be 
given in the verification reports, i.e. stating the grounds for rejecting payment of 
expenditure covered by the claim (e.g. the state of the works, the article, price, 
quantity and grounds for rejection), the differences/irregularities/discrepancies 
identified, the method used to check expenditure covered by the payment claim, the 
points where measurements were taken using the measuring instruments with which 
the experts were equipped and the instruments with which the measurements were 
taken. 
- supplementing the procedure by the addition of provisions on filling out Annex 1 
to the Verification Report – Points to be checked in the field. 
- supplementing the procedure by the addition of provisions on avoiding double 
payments, through the drawing up of Form F1 - Sheet of acquisitions contracted, 
invoiced and admitted for settlement. 
- supplementing the procedure by the addition of provisions on the settlement of 
eligible expenditure, provided that the acquisitions contracts covered by the project 
have been endorsed. 
- amending the procedure by the removal of the conclusion 'compliant with 
observations', given after the checking of the payment claim file has revealed the 
failure to comply with the 90-day deadline, due to late submission of the documents 
requested as additional information.  
- providing greater detail in the procedure for notifying beneficiaries about field 
visits by experts, so that the experts can meet the procedural deadlines. 
- supplementing the procedure with provisions on verifying whether the value of the 
payments under a project fall within the maximum ceiling permitted in the 
Measure’s Technical Sheet.  
- correlating the procedure with legislative provisions in force relating to the 
professional training of beneficiaries. We believe that the improvements made to 
the re-verification procedures have made the internal control system more efficient.  
Slovakia: The measures taken in response to the shortcomings identified within the 

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Annex 3.3 

Annex 3.4 

ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
PPA by the ECA are set out in detail in Annex 2 to Investigation/Report 
09.SYS.CH05.NR1.1003. 
Germany: The opinion on the FIAF system audit in Mecklenburg-Western 
Pomerania was sent to the Commission in March 2010. The Commission has not 
yet completed its evaluation 
Romania: (APIA) 
In 2009 Romania established, together with representatives of the European 
Commission, the Action Plan to remedy deficiencies in IACS. The actions included 
in the Plan will be finalised in 2011.  
Compliance with the Plan was monitored by Commission audit missions and reports 
produced on a quarterly basis or at the request of the Commission. 
Greece 
IACS: As the Commission has also recognised, after the new LPIS-GIS became 
operational, the problems were resolved and the risks reduced for applications 
submitted in 2009. 
SPS: Shortcomings identified in the context of the account settlement procedure are 
being followed up. 

Poland: The Court did not identify any irregularities in the operation, updating and 
use of the LPIS-GIS for the purpose of systems audits in the 2009 financial year. 
Significant progress was recorded in this area in relation to previous years. As was 
stressed in the previous report (for the 2008 financial year – cf. paragraph 5.36) 
from the year 2009 onwards, administrative checks have only been performed on 
the basis of the eligible area indicated in the LPIS on the basis of the 
orthophotomap, i.e. the PEG area. Other activities have been undertaken to raise the 
quality of the LPIS reference base, including reducing the time taken to update the 
ortho-photo map from 5 to 3 years, increasing the pixel resolution of the 
ortho-photo map or updating fields under cultivation in the course of the present 
campaign. Whereas in 2008 the Commission stated in respect of these findings that 
the irregularities detected in previous years would be followed up, with regard to 
2009 the Commission has indicated that it is monitoring the cases reported in the 
clearance of accounts procedures and has not noted any systemic irregularities in 
this area. 
The actual quality assessment of the LPIS will be presented in the annual 
assessment of the quality of the land parcel identification system which, in 
accordance with Article 6(2) of Commission Regulation (EC) No 1122/2009, will 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
be submitted by 28 February 2011. Bearing in mind that its scope encompasses a 
number of quality parameters concerning inter alia changes in the maximum 
eligible area and the declared area as a proportion of the eligible area, the report 
makes it possible to assess progress in updating the LPIS in Poland. This viewpoint 
is justified in the light of the Commission's observations on this subject, especially 
since the LPIS quality assessment report is mandatory for all Member States.  
Romania: (APIA) 
In 2009 Romania established, together with representatives of the European 
Commission, the Action Plan to remedy deficiencies in IACS. The actions included 
in the Plan will be finalised in 2011.  
Compliance with the Plan was monitored by Commission audit missions and reports 
produced on a quarterly basis or at the request of the Commission. 
Estonia: 3 million euro TRDI expenditure was omitted following the approval 
round of the certified annual reports in April 2010, because information on the 
review of TRDI expenditure was missing from the certification report compiled by 
Ernst & Young Baltic AS. Ernst & Young Baltic AS sent a reply to the European 
Commission’s inquiry on 14 May 2010, and in the approval round for the annual 
reports in October this amount was approved by the European Commission. 

Annex 3.5 

Germany: No response necessary, since there were no objections from the Court 
(see point 3.53 of the report) 

Romania: (APDRP)
The annual declaration of expenditure for the 2009 financial year was decreased by 
EUR 27 849 919.25, which represents the value of payments made by APIA from 
funds received from the state budget and settled in March 2010. The amounts 
reported to the Commission in quarterly declarations were EUR 27 803 324.38 for 
the period 1 April 2009 – 30 June 2009 and EUR 46 594.87 for the period 1 July 
2009 – 15 October 2009. The annual declaration of expenditure for the 2009 
financial year was also reduced by EUR 8 348 104.82, which represents the 
correction applied as a result of the use of the correct rate of conversion. The annual 
declaration of expenditure for the 2009 financial year was re-submitted via 
SFC2007 at the Commission’s request, in accordance with the email received from 
Richard Croft of DG AGRI’s Unit J.5 on 12 November 2010. Enclosure: Declaraţie 
rectificata An financiar 2009.pdf [Corrected declaration for 2009 financial 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
year.pdf] 

CHAPTER 4 - COHESION 
Annex 4.2 (1) 

Denmark: The result of the examination of systems shows that all points are in 
order for the Danish programme examined by the Court, so no further action has 
been taken. 
Estonia: In addition to many other training courses organised by the management 
authority for the administration of the structural funds, in 2010 the management 
authority carried out two training sessions on public procurement for administrators 
of structural funds (25 May and 20 October) and eight training sessions on public 
procurement for beneficiaries of structural funds and potential applicants (14 
January, 5 March, 27 May, 31 May, 2 June, 4 June, 31 August, 9 September). 
Similar training sessions will also be held in 2011. 
The management authority continues to check implementation of the follow-up of 
the audits of management and control systems, asking those audited for evidence 
upon expiry of the term fixed in the report and analysing the adequacy of evidence. 
At the same time the implementing bodies continue to check implementation of the 
follow-up of project audits and perform on-the-spot checks at beneficiaries.  
The implementing bodies have updated the control forms for payment applications 
and public procurement and improved the relevant procedures.  
The activities are described in more detail in Estonia’s replies to the European Court 
of Auditors’ report: 
1)Letter No 9.2-4/5724 of 1 June 2010 “Estonian response to European Court of 
Auditors ERDF 2007EE161PO001 audit report PF-3191(Adonis No 2698)”; 
2) Letter No 9.2-4/5724 of 13 September 2010 “Estonian response to follow up of 
findings of audit by European Court of Auditors under DAS 2009 - PF-3191 – on 
Operational Programme for the Development of Economic Environment 
CCI No 2007EE161PO001". 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
France: Dans le cadre de la DAS 2009, les constatations finales de l’audit de la 
Cour des comptes européennes portaient d’une part sur les corrections d’opérations 
individuelles et d’autre part sur des améliorations à apporter au système. 
Sur les opérations individuelles : 
- le montant de 4 923,06€ déclaré inéligible pour l’opération n°32769 a fait l’objet 
d’un retrait à l’appel de fonds du 3 novembre 2010 (AF6, accepté par la CE le 
16/11/2010). Dans l’attente des résultats du plan de reprise demandé par la Cour sur 
l’ensemble des Missions locales de Languedoc-Roussillon, toutes les dépenses des 
missions locales ont été suspendues à titre conservatoire. Les résultats de ce plan de 
reprise sont intégrés dans l’appel de fonds en cours qui devrait être transmis à la 
Commission européenne en décembre prochain (AF7). 
- le montant de 15 428,44€ déclaré inéligible au titre de l’opération n°31 171 a fait 
l’objet d’un retrait à l’appel de fonds du 3 novembre 2010 (AF6, accepté par la CE 
le 16/11/2010). 
Sur le système : Lors du dernier trimestre 2010, l’intensification des contrôles 
qualité gestion de l’autorité de gestion en titre sur les autorités de gestion déléguées 
permet de s’assurer de l’application homogène des instructions nationales et du 
respect des exigences communautaires, notamment pour les contrôles de premier 
niveau. 
Enfin, s’agissant du logiciel Présage, la mise en production du module de suivi des 
retraits de dépenses est prévue début 2011.  
Hungary: Very often, due to the public procurement irregularities, the inspection 
reports criticised the existing control system. The amended Joint Decree 
No 16/2006 of 28 December 2006 of the Ministry of Agriculture and Rural 
Development and the Ministry of Finance, introducing a comprehensive reform of 
the control system for public procurement, enters into force on 8 December 2010. 
This reform ensures that every public procurement operation (below and above the 
Community threshold of the active scheme) will be checked and therefore a 
significant decrease in public procurement irregularities can be expected.  

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Greece: : In light of tables 1 & 2 in Annex 4.2 for the 2000-2006 programming 
period, the system for processing and reporting recoveries and withdrawals for the 
Roads Operational Programme was considered effective and no action needs to be 
taken. As far as the 2007-2013 programming period is concerned, the system 
relating to the regularity of transactions in the Competitiveness - Entrepreneurialism 
Operational Programme was found to be in compliance with requirements and no 
action needed to be taken. 

Poland: Managing Authority for the Human Resources Operating Programme 
- 06/10/2010 
The date on which the final version of the Court of Auditors' report PF-3192 was 
received was deemed to be the date on which action was taken. Remedial action 
concerns changes in the system of implementing project control systems and the 
guidelines on eligibility of expenditure under the Human Resources Operating 
Programme. The updated system for implementing the Human Resources Operating 
Programme is scheduled to enter into force on 1 January 2011. For that reason the 
remedial action is deemed not to have been completed. 
Managing Authority for the Sectoral Operating Programme for Improving 
Business Competitiveness - 26.02.2010 
By letter dated 26 February 2010 the Managing Authority for the Sectoral 
Operating Programme for Improving Business Competitiveness transmitted 
information to the Paying Authority by way of the register of debtors on all 
recoveries and recoverables as at the date on which the Managing Authority drew 
up its last set of conclusions in 2009 whereby the funds were certified to the 
European Commission in 2009 by the Paying Authority, i.e. 57/5/2008. 
Comment by the Managing Authority for the Sectoral Operating Programme 
for Improving Business Competitiveness  
By letter dated 17 September 2010 together with the final certificate of the Sectoral 
Operating Programme for Improving Business Competitiveness No 62/7/2010 the 
Managing Authority for the Sectoral Operating Programme for Improving Business 
Competitiveness transmitted the register of debtors which indicated recovered 
amounts and amounts recoverable for the Sectoral Operating Programme for 
Improving Business Competitiveness as at the day on which the programme ended. 
At present the Managing Authority for the Sectoral Operating Programme for 
Improving Business Competitiveness sends tables of recovered amounts to the 
Paying Authority on a quarterly basis. These tables indicate amounts recovered and 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
amounts recoverable in the quarter in question, information on suspended projects 
and information on uncompleted projects.  

Portugal: As regards systems evaluations, the opinion was given vis-à-vis the 
POPH Management Authority that the key provisions of the regulatory framework 
had been partially complied with. This opinion was reflected in the comment “…no 
systemic verification of errors relating to the eligibility of expenditure when errors 
are detected in a certain expenditure following administrative checks”. 
At present, given the trend noted, we consider that overall the POPH's system of 
administrative checks is adequate given the validations contained in the 
computerised procedures for the analysis of reimbursements and balances and the 
validations included in the document verification procedures. These procedures are 
described in the Manual of Procedures and the various Functional Technical 
Descriptions (DTF). The manual is supplemented, where required, by Guidance 
memos issued by the POPH Managing Committee.  
In the case in point, we would refer to Technical Guidance No 2/UA II – 
POPH/2009 of 2 November 2009 (attached at annex), concerning the CNO 
administrative checks.In the light of the ECA's comment, consideration was also 
given to the need to strengthen certain Guidances on administrative checks, in 
particular those relating to situations of potential systemic risk. 
It is considered that that risk is above all present in cases where an entity applies for 
various types of aid under the operational programme, which means that different 
technical teams may be involved in these analyses. For this reason, the POPH 
Managing Committee issued Official Circular No 4/CD/2010 of 12.04.2010, 
attached at annex, concerning the handling of systemic errors. 
Spain: With regard to (1): a Report produced by the Spanish State Auditing Agency 
(Intervención General de la Administración del Estado (IGAE)) with regard to this 
issue is attached as ANNEXE A. 
Sweden: In view of the results of the examination of systems for the correctness of 
the transactions, the administrative authority has started a systems review in order to 
improve, strengthen and render more efficient compliance with the legal provisions 
relating to the structural funds. The authority has established an action plan to 
improve the examination system (Article 13 checks) with regard to the sampling 
method, the objective of on-the-spot checks, checklists, the scope of checks, 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Annex 4.2 (2) 

CHAPTER 6 – EXTERNAL AID, DEVELOPMENT AND ENLARGEMENT 
Annex 6.4 

CHAPTER 7 – EDUCATION AND CITIZENSHIP 
Annex 7.3 

Member State reply 
analysis and follow-up of checks and the audit trail. The administrative authority is 
also continuing to work on training and advice with a view to improving 
examination methods, with a particular focus on the regulations on public 
procurement. 
Spain: With regard to (2), the ERDF-Information Society programme was closed 
without financial corrections. 

Bulgaria: After the Commission applied the ‘suspension of payments’ measure in 
relation to the PHARE programme on 28 February 2008, the Bulgarian authorities 
drew up a proposal for imposing financial corrections in respect of all contracts 
concluded under extended decentralisation terms by the Executive Agency under 
the Ministry of Regional Development and Public Works and the Central Finance 
and Contracting Unit under the Ministry of Finance. As a result, the Commission 
notified the national authorities by letter of 23 November 2009 of the resumption of 
payments under the programme. The measure applied did not cover twinning 
agreements under Transitional Facility. 

Bulgaria: In the 2009-10 period, the CFCU Directorate under the Ministry of 
Finance, in its capacity as paying agency under the Schengen Instrument, adopted a 
series of corrective measures, taking account of all the recommendations resulting 
from audits and monitoring missions that had been carried out and closely 
monitoring the fulfilment of the undertakings given in the relevant action plans. As 
a result of the systems’ improved functioning, the CFCU concludes all contracts for 
actions related to the Schengen acquis by the deadline, in accordance with 
document C(2009)/10399 of 18 December 2009.  
The Commission’s DG JHA conducted a monitoring mission in relation to 
implementation of the Schengen Instrument on 21-23 June 2010. In its final report 
(N HOME/C/JLDB/D(2010) – 3558) of 22 September 2010, the audit team took the 
view that the mechanisms created by the CFCU were consistent with European 
legislation and that there were no substantive problems related to the award of 
public contracts.  
The total value of the contracts concluded under the NIP 2007-09 was EUR 148.6 
million (incl. VAT) All contracts were concluded before the the deadline for 
contracting under the Schengen Instrument, i.e. 31 March 2010. It should be noted 
that, in addition to the EUR 128.9 million funding for Schengen, for the purpose of 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
implementing the projects under the NIP for the Schengen Instrument, the 
Bulgarian Government adopted Resolution No 17 of 15 February 2010 guaranteeing 
additional national funding in the amount of EUR 14.8 million (BGN 28.36 million) 
to finance projects related to the implementation of commitments entered into by 
Bulgaria in relation to accession to the Schengen area. 
All contracts concluded by the CFCU under the SIS II project had been 
implemented by 6 December 2010. 

CHAPTER 9 – ADMINISTRATIVE AND OTHER EXPENDITURE 
Table 9.2 

ANNEX 1 
Diagram V 

Financial information on the general budget 

Greece: Our department monitors and records ECA recommendations about EU 
Executive and Other Agencies. In this context, it should be noted that in its audit 
reports the ECA ascertains whether underlying operations and transactions are 
legitimate and regular, and whether the accounts of the two Agencies established in 
Greece are reliable. 
Ireland: Table 9.2 does not request any action by Ireland.  

Poland: The table does not contain reservations concerning Poland but provides 
general information. It was not deemed necessary to take any action. 

Austria: No comments, as the table only breaks down 2009 own resources by 
Member State.  
Denmark: The diagram did not give rise to any particular comment. 

Estonia: The financial information shown in the table does not imply that action 
was taken. 
Hungary: The finding did not require any measure by Hungary. 
Germany: No objections, this is merely a depiction of revenue by Member State 
and source of own resources.  
Greece: The graph shows budget implementation for 2009 revenues. Our 
Department has no comments to make on this matter. 
Ireland: Diagram V does not request any action by Ireland.  

Malta: No action needs to be taken by Malta in this respect. 

Poland: The paragraph concerns information on the financing of the general budget 
and does not contain reservations concerning Poland. 

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ANNEX I. paragraphs in the 2009 Annual Report and for each of the 2009 findings made by the Court referring to each particular country,  
Paragraph 

Observation in the 2009 Annual Report 

Member State reply 
Slovenia: We are still to receive information on own resources for 2009 and have 
taken no action in this connection. 

Diagram VI 

Financial information on the general budget 

: No comments, as the table only breaks down 2009 payments by Member 

rk: The diagram did not give rise to any particular comment. 

a: The financial information shown in the table does not imply that action 
en.  
ry: The finding did not require any measure by Hungary. 
ny: We would suggest using actual payments made for the breakdown by 
r State – as in the Commission’s Financial Report. Since the figures under 
are presented as final, using payments owed and payments made in the same 
ay make it more difficult to read. In addition, administrative expenditure 
be included so as to cover all headings in the financial framework. Even if  
e case with expenditure on third countries – it cannot be broken down by 
r State, it should be included in the total.  

Greece: The graph relates to payments made in 2009 per Member State per fiscal 
framework category. No action is required.  

d: Diagram VI does not request any action by Ireland.  
No action needs to be taken by Malta in this respect. 

Slovenia: We are still to receive information on payments made in 2009 and have 
taken no action in this connection. 

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EN 

46 

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ANNEX III B -GENERAL REMARKS 
Member State 
Belgium 

Reply 
Le rapport annuel 2009 n’émettait pas encore d’opinion sur le fonctionnement des systèmes de gestion et de contrôle. (Région Bruxelles) 

Denmark 

Annual Report 2009 

Denmark finds it satisfactory that every year since the Statement of Assurance was introduced, with effect from 1994, the Court of Auditors 
has, with some reservations, considered the EU's accounts to give a true and fair picture of the revenue, expenditure and financial position 
of the Communities. On the whole, therefore, this part of the Statement of Assurance has been positive every year and has been without 
reservations for the past three years. 
It is also satisfactory that the audit statement on the legality and regularity of payments shows that the general level of error in 
implementing the transactions continued to fall in 2009. However, it is clearly unsatisfactory that the level of error in a number of policy 
areas – again with the "Cohesion" sector as the most important – continued to be too high in 2009. 
Denmark notes the Court's main recommendations on further improvement of the effectiveness of the supervision and control systems (1), 
the continued need to simplify the rules which, inter alia, may reduce the risk of error (2) and the work to produce better information on the 
content and effect of recovery of financial corrections (3). 
Denmark also welcomes the fact that the Court's presentation of the audit findings has become more precise in recent years. This clearer 
presentation strengthens the scope for remedying shortcomings in budget implementation and for determining the extent to which necessary 
progress is made over the years.  

Council discharge 

During the Council's forthcoming discussion of the Court of Auditors' annual report, Denmark will attach importance to factors which can 
contribute to continued progress, financially and otherwise in the management and control of the EU's spending budget. We consider the 
following factors particularly important.  

Consideration of further balanced simplification of the rules, inter alia in the light of the Commission's proposal for a revision of the 

Financial Regulation for the EU budget and the Commission's communication on simplifying the research framework programmes. 
Otherwise, see the answer to the question on simplified implementation of the rural development programmes (see Annex II, part A, 
question 2). 

Considerations regarding more cost-effective control arrangements, inter alia based on single audit practice, and considerations on 

the practical use of the Commission's previous studies of the costs and benefits of control measures in the different expenditure areas 
("tolerable risk"). 

Clarification of the link between the audit findings in the annual report and those in the special reports issued by the Court of 

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Auditors. This applies, for example, to experiences of the more effective performance of specific programme management bodies (see 
special report No 13/2009 on delegating implementation tasks to executive agencies). In this context, the Commission should report its 
follow-up of the Council's conclusions on the special report (in document No 17386/09 of 10 December 2009). 

Improved overall coordination in the field of audit, by creating the necessary agreement between the Court of Auditors, the 

Commission and the Member States on audit methods and the treatment of various types of error and irregularity. 

Improved cooperation between the Court of Auditors and the national supreme audit authorities (in Denmark the National Audit 

Office) in the use of common audit methods, exchange of audit findings and the implementation of joint audits, etc. Please note that in its 
2009 annual report, the Court has not mentioned the auditing of EU funds that is undertaken by the supreme audit authorities of the Member 
States. We also refer to the Court of Auditors' reply to a question on a single audit model, confirming that it is an effective tool for the 
management of EU funds (see Annex II, part A, question 1a). 

Improvement of the Commission's guidance to the Member States, inter alia through seminars in Brussels and in the capitals of the 

Member States. The Commission should also provide solutions to issues that are common to/typical for all Member States or groups of 
Member States in relevant management and control fields (use of "best practice").  

Greater and more widespread use of the Member States' national audit statements prepared on a voluntary basis (national 

declarations). 

For the "Cohesion" policy area in particular: 

Follow-up of the annual summaries required by the legislation concerning the control of the use of resources from the Structural 
Funds, including discussion of the Member States' replies at the Commission's discharge hearing of 10 November 2009, as published in the 
Commission's report of 26 February 2010 (SEC (2010) 178). We noted that in its 2009 Annual Report, the Commission has not mentioned 
the annual summaries concerning control of the use of the resources of the Structural Funds. 

Analysis of wrong application of the procurement rules as a source of error. See also the answer to the question on lack of 

compliance with the public procurement rules (see Annex II, part A, question 4). 

The impact of recovery operations and financial corrections, in behavioural and financial terms. 

Discharge procedure between Parliament and Council 
Parliament wishes to formalise the discharge procedure between Council and Parliament, inter alia concerning discharge in respect of the 
Council's budget implementation. Parliament therefore wishes to enter into an agreement with the Council on the discharge procedure, 
including a mechanism for the reciprocal exchange of information between the two institutions regarding EU budget implementation.  
Denmark's view is that there should be an overhaul of the interplay between the two institutions concerning discharge, and that the existing 
discharge procedure should therefore be reviewed. Denmark is therefore working to achieve agreement between Council and Parliament to 
improve cooperation on discharge and leading to greater transparency in the institutions' implementation of their respective budgets 
The errors detected by the Court of Auditors and the descriptions of them should be published in full, so that the Member States authorities 
and aid beneficiaries can learn from the mistakes and improve their own activities. At the moment the report does not give a clear picture of 
the nature and cause of the errors. 

48 

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Finland 

EN 

 
  
Greece 

Germany 

Hungary 

Ireland 

EN 

One condition for the success of Cohesion Policy is efficient and effective management systems, and the fact that the Commission (para. 
4.3.4) this year has concluded that the error rate is significantly lower than previous years is particularly satisfactory. 
Among other things, the annual report (para. 4.13) sets out the problem which arose from the pressure to absorb the available resources 
within 2-3 years from the date on which the obligation was undertaken, so as to avoid the automatic release of those funds. 
As the Commission has itself found (5th Cohesion Report), the complexity of the Regulations and the absorption commitments has made 
many Member States focus on compliance with the Regulations and absorption issues, to the detriment of expenditure efficiency. 
Consequently, it is necessary to attach importance from now on to performance, by improving planning, management and evaluation of the 
programmes and by fostering the exchange of experiences. 
In this context, we consider that the conditionalities proposed by the European Commission as a method for compliance, which seek to tie 
financing via the Cohesion Fund into the achievement of macroeconomic objectives, will once again prompt Member States to focus more 
on other issues (such as achieving the extraneous targets set) and less on performance and the results of interventions.  
We consider that the tie between performance and financing can be achieved more effectively using incentives rather than penalties. The 
Commission has already made a proposal about a performance reserve at European level, but this would simply create competition between 
the countries. Greece is of the view that a performance reserve needs to be established at national level, so as to provide incentives to 
implementing bodies and to the regions of the countries to achieve better results and to compete fairly against each other. 
The German Government welcomes the fact that the Court of Auditors is now using the most likely error rate to establish shortcomings in 
individual EU policy areas. This makes it clearer that audit results that are statistically extrapolated at EU level do not allow conclusions to 
be drawn about the situation in an individual Member State, particularly when no audits are carried out there. 
The German Government notes that the Court of Auditors, for the sixteenth consecutive time, has not issued an unqualified statement of 
assurance under Article 248 of the EC Treaty. 
The German Government supports the Court of Auditors in calling for further simplification of the rules and conditions governing rural 
development. The German Government believes that further simplification and clearly worded rules are needed also in the Structural Funds 
sector. 
We are pleased that for the 2009 financial year the European Court of Auditors (hereinafter the ‘ECA’) once again issued an unqualified 
opinion on the reliability of the report, which offers a picture of the financial situation of the EU, namely its operational and financial 
results, that is accurate from every essential point of view. 
With regard to the legality and conformity of the underlying transactions, we see a positive development in the fact that according to ECA 
in the last few years the estimated rate of the most common irregularities relating to payments in general has steadily declined. 
In our view the recommendations and observations included in the report are often too general and the shortcomings identified, too, are 
formulated in general terms. Thus, in our opinion, even though the scope and details of the report are generally appropriate, the deficiencies 
noted are described in general terms and this does not offer enough help to either the Member States or the Commission as regards the 
adoption of suitable measures to remedy them. 
Please find set out below additional information on Cohesion PF 3473 - Assessment of the management and control system. 
The key requirements in the ECA report regarding the Management and Control System are: 

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Annex 3: Management & Control System. MA: Key requirement 1 - a) Inadequate monitoring by the MA of the JTS (Implemented 
06/07/10) 
Annex 3: Management & Control System. MA: Key requirement 1 - b) verifications do not cover significant aspects of the project. 
(Implemented 20/07/10) 
Annex 3: Management & Control System. MA: Key requirement 4 - a) Verifications do not extend to the substance of the procurement 
procedure (Implemented 20/07/10) 
Annex 3: Management & Control System. MA: Key requirement 4 - b) Some procurement procedures not verified by the Managing 
Authority (Implemented 26/07/10) 
Annex 3: Management & Control System. MA: Key requirement 4 - c) observations resulting from the project audited - (a) - Part of the 
project implemented outside of the eligible area. (Ongoing) 
Annex 3: Management & Control System. MA: Key requirement 4 - c) observations resulting from the project audited - (b) - Hibernia 
acquired existing cables from Bytel. Bytel received support in the previous programme period. (Ongoing) 
Annex 3: Management & Control System. MA: Key requirement 4 - c) observations resulting from the project audited - (c) - Hibernia 
acquired rights to use ducts of existing operators. (Ongoing) 
Annex 3: Management & Control System. AA: Key requirement 2 - b) Implementation of the 2009 Audit Strategy (Implemented 26/07/10) 
Annex 3: Management & Control System. AA: Key requirement 3 - c) Reliance on the work of others without verifying it. (Implemented 
26/07/10) 
The Netherlands welcome the fact that the ECA has clearly recognised in this report that the error percentage published is an estimate (of 
the most likely percentage) based on a sample of a limited size, which allows the findings to be put in context. Furthermore, more clarity 
and transparency on the system and the findings of the Court of Auditors, including the documents on which these findings are based, 
would increase the added value of the report for Member States and give a more complete picture of what the ECA has observed. In 
conclusion, attention should be given to ensuring uniform interpretation of the rules (by the Commission, ECA and the Member States). 
Simplification of the rules would help in this respect. 
The annual report for 2009 states that the number of errors in EU budget expenditure under the cohesion policy has fallen. This is very 
important for Poland. The changes taking place in cohesion policy (streamlining of procedures, decentralisation of reports on operating 
programmes) will have a positive impact on the quality of EU expenditure. It would therefore seem that the changes in the management and 
control system for cohesion policy in 2007-13 have borne fruit.  
However, the increase in the number of errors in the Common Agricultural Policy field in relation to last year (to between 2 and 5% as 
compared with less than 2% in 2008) gives rise to concern.  
Poland wishes to play an active part in the debate on acceptable levels of error (TRE) by supporting diversification of EU budget 
expenditure by individual fields and distinguishing between obvious infringements and insignificant errors (and penalising them 
accordingly). 
However, it should be borne in mind that attempts to differentiate TRE merely tackle the symptoms of problems arising from excessively 
complex Community rules (in particular on public procurement). Action should be taken to simplify these rules as far as possible. 

Netherlands 

Poland 

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Portugal 

NOTE 

The IGF established, in timely fashion, an Audit Strategy for CSF III which was discussed with the European Commission in the annual 

coordination meetings, with a view to taking appropriate account of the development of the different operational programmes.  

In the last review, discussed at the coordination meeting that took place on 8 May 2009, the undertaking was made to develop, by the 
end of 2009, a first pre-closure audit for all forms of aid, with special attention to aid where situations of greater risk were identified (see 
point 2.12 of the IGF Audit Strategy, revised on 30 March 2009, which constituted the Annex to the annual inspection report). The nature, 
scope and timeliness of the audits were planned on the basis of a risk analysis covering materially relevant errors.  

In 2010 the audits were concluded and all the work relating to the closure of the various forms of aid cofinanced by the Structural Funds 

in the 2000-2006 programming period (CSF III) was carried out, in a total of 58 national programmes plus 1 territorial cooperation 
programme. 

As a result of the work carried out by the national authorities during the programming period, it was possible, in most situations, to 
close the programmes, with no significant problems left outstanding and with the respective error rates at levels we consider reasonable. 
At the same time, development of the management and control systems for the operational programmes in the programming period 

2007–2013 was concluded, the IGF having issued the respective compliance opinions (compliance assessment). This procedure 
strengthened the guarantee of smooth operation of the systems, making them more effective in the prevention and detection of errors and 
irregularities. 

System audits were also undertaken to evaluate the actual operation of the management and control systems. 
As regards the Agricultural Funds, there has also been a steady decrease in error rates, reflecting improvements in the management and 

control systems applied. 

Inspectorate-General of Finance, 15 December 2010 

With regard to the chapter on agriculture and natural resources, we would like to make the following considerations: 
It should be noted that VAT is treated differently depending on the kind of fund in question. For the EAFRD, Article 71 of Regulation 
1698/2005 on eligibility of expenditure establishes that VAT is generally not eligible. This is not the case for other funds. 
Requests have been made by most Member States in various fora - from the Agriculture Council to the ECA, and including the Committee 
on Rural Development and various Work Groups - to align VAT between funds and, in the case of the EAFRD, that this should be brought 
into line with other structural funds (such as the ERDF).  
The Commission has shown a certain unwillingness with regard to such a change in the Regulation for many years. We hope that this will 
be taken into consideration for the next programming period. 
The UK is very concerned that the ECA has once more been unable to provide a positive Statement of Assurance on the majority of 
payments from the EU Budget for the 16th year in succession. While the UK welcomes the ECA’s unqualified positive Statement of 
Assurance on the reliability of the EU’s accounts, the high error rate for Cohesion Policy remains a cause for concern. Although the UK 
notes that the likely error rate for Cohesion Policy has declined significantly since 2008, it considers that further progress should be made, 

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Spain 

UK 

EN 

 
  
 
 
particularly given that Cohesion Policy accounts for around 30% of EU Budget expenditure.  
The UK also highlights the importance of recovering money paid out incorrectly from the EU Budget. The UK therefore notes with concern 
that overall rates of recovery from beneficiaries who received EU funds incorrectly seem to have fallen compared to 2008.  
The UK notes that, in its report on implementation of the 2008 EU Budget, the ECA provides a chart setting out a year-on-year comparison 
ion terms of percentage share of the Budget in the relevant error range (Chart 1.1). The UK regrets that no such chart is available in the 
report on the 2009 Budget. The UK notes that 47% of the 2008 EU Budget had a likely error rate of less than 2%, while 22% or the Budget 
had an error rate of between 2% and 5%, and 31% had an error rate of over 5%. The UK requests the ECA to provide comparable statistics 
for the 2009 EU Budget. 
The UK underscores that a qualified statement on the EU Budget year after year affects confidence in EU expenditure and the public’s 
perception of the value of membership of the EU. The UK notes that the pace of reform of EU financial management appears to be 
incremental and that much more needs to be done by both the Commission and the Member States to achieve the mutual aim of a positive 
statement of assurance on the EU Budget. 
While the UK recognises that the current programming period 2007-2013 has brought about improvements in terms of simplifying complex 
rules and legal requirements, the UK considers that further simplification is a priority and welcomes the ECA’s helpful remarks in this 
respect. 
The UK notes the ECA’s conclusion that for many policy areas, supervisory and control systems are only partially effective. The UK 
supports the ECA’s recommendation that the Commission should enhance controls in many areas, and notes with concern that in certain 
cases, supervisory and control systems at Commission level left a significant number of errors undetected and hence uncorrected. Prominent 
examples include the Education and Citizenship policy group, and weaknesses in DG RELEX ad DG ENLARG systems which have yet to 
be remedied. The UK notes with satisfaction the Commission’s acceptance of and agreement with some of the ECA’s recommendations, 
and is encouraged that measures are already being taken to address many of these weaknesses. However, the UK also notes the importance 
of Member States providing accurate and timely information to the Commission, for instance on recoveries, and commits to carrying out 
such improvements if deemed necessary.  
With specific regard to the ECA’s report on the EDF, the UK welcomes the ECA’s observation that EuropeAid has remedied some of the 
shortcomings identified in the previous ECA report. In particular, the UK welcomes the fact that EuropeAid finalised a revised framework 
for monitoring and reporting progress in public financial management in June 2010. While the UK also welcomes many of the specific 
improvements noted by the ECA in the report on the EDF, the UK is concerned that most of the National Authorising Officers in partner 
countries appear to lack capacity, resulting in poorly documented and ineffective checks. 
Format of the ECA report 

It would be helpful if the report details all the missions to each member state in the calendar year concerned, with the specific 
programmes audited included in the list. A full programme title would enable managing authorities in the UK to find more easily those 
areas of the report applicable to them. 
The format for the report is more user friendly than last year’s. 

EN 

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EN 

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ANNEX III A 
Questions put to Member States concerning Agriculture/Natural resources and Cohesion 

FOR SUPREME AUDIT AUTHORITIES (SAIs): 
(1a) The single audit model in which "each level of control builds on the preceding one, with a view to reducing the burden on the auditee and enhancing the quality of 
audit activities, but without undermining the independence of the audit bodies concerned"1 has been regarded as desirable by the Parliament and the Commission.  
Does the SAI of your Member State support the idea of the single audit principle as an efficient tool in the management of EU funds? 
(1b) The European Court of Auditors applies a 2% materiality threshold for the DAS (statement of assurance) audits in order to conclude on the reliability of accounts and 
the legality and regularity of underlying transactions. According to the DAS methodology, the Court may decide to set a different level of materiality and/or to consider 
some differentiation of materiality thresholds between budgetary areas to take into account the DAS addressees' requirements.  

What materiality threshold is applied to financial audits by the SAI of your Member State? 
Are there any variations in the materiality threshold?  

(1c) Since 2006 the Commission has sought to promote audit activity by providing the SAIs with detailed reports on payments made in the respective Member States. 
These reports have been developed extensively in recent years and now provide more detail which facilitates audits undertaken in close co-operation notably, with some 
SAIs. The latest reports were sent out in June 2010.  
Were the reports used by your SAI as a basis for their audit work, including risk assessment?  
AGRICULTURE and NATURAL RESOURCES CHAPTER 
(2) In the area of rural development, the Court of Auditors recommended maintaining efforts to further simplify rules and conditions (§3.74). Since rural development 
programmes are implemented under shared management, Member States have a role to play in this endeavour.  
Has your Member State introduced any relevant initiative addressed at further simplifying the implementation of rural development programmes? 
COHESION CHAPTER 
(3) In the Court's audit sample for the Cohesion chapter, some eligibility errors are attributable to stricter national eligibility rules (e.g. co-financing rules) in comparison 
with eligibility rules set at the EU level. For 2007-2013, the rules set by the regulation at Community level allow the Member States greater scope for specifying the 
eligibility conditions according to the specific needs of their programmes.  
 Were your national eligibility rules stricter than those set at the EU level? YES/NO 
If yes, what was the reason? 
  (a) eligibility rules at the EU level were not specific enough for the needs of the programmes? 
  (b) eligibility rules at the EU level could not be properly understood by the beneficiaries? 
  (c) any other reasons 

1 OJ C 107/1, 30/04/2004-opinion 2/2004, p107/4 

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(4) In the Cohesion chapter ( §4.21) the Court also notes that "non respect of public procurement rules alone accounts for 43% of all quantifiable errors and makes up for 
approximately three quarters of the estimated error rate" 
In your opinion, what can be done to improve this situation? 
(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? 
 (e) any other suggestions 
5) In the Cohesion chapter (§4.26), the Court's audit showed that for 11 out of 16 OPs audited, the verifications carried out by the Managing authorities were only partially 
compliant with the regulatory requirements.  
What do you think could be done to ensure effective verifications by 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 
(f) any other reasons 
(6) The Court recommends that the Commission should encourage national authorities to rigorously apply corrective mechanisms before certifying the expenditure to the 
Commission. 
What can be done to better assist you in applying corrective mechanisms in the context of your management verifications? 
a) more training by the Commission for national/regional authorities on control issues and correction of errors detected 
 (b) clearer guidelines from the Commission for national/regional authorities on control issues and correction of errors detected? 
(c) increased control supervision by the Commission on the follow-up of audit findings by the national/regional authorities? 
(d) any other suggestion 

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SAI 

(1a) The single audit 
model in which "each 
level of control builds on 
the preceding one, with a 
view to reducing the 
burden on the auditee 
and enhancing the 
quality of audit activities, 
but without undermining 
the independence of the 
audit bodies concerned"  
has been regarded as 
desirable by the 
Parliament and the 
Commission.  

(1b) The European Court of 
Auditors applies a 2% materiality 
threshold for the DAS (statement 
of assurance) audits in order to 
conclude on the reliability of 
accounts and the legality and 
regularity of underlying 
transactions. According to the 
DAS methodology, the Court may 
decide to set a different level of 
materiality and/or to consider 
some differentiation of materiality 
thresholds between budgetary 
areas to take into account the 
DAS addressees' requirements.  

Member 
State 

Does the SAI of your 
Member State support 
the idea of the single 
audit principle as an 
efficient tool in the 
management of EU 
funds? 

What 
materiality 
threshold is 
applied to 
financial audits 
by the SAI of 
your Member 
State?  

Are there any 
variations in 
the materiality 
threshold? 
YES (if yes 
what are 
these 
variations?)/ 
NO 

(1c) Since 2006 
the Commission 
has sought to 
promote audit 
activity by 
providing the SAIs 
with detailed 
reports on 
payments made in 
the respective 
Member States. 
These reports 
have been 
developed 
extensively in 
recent years and 
now provide more 
detail which 
facilitates audits 
undertaken in 
close co-operation 
notably, with some 
SAIs. The latest 
reports were sent 
out in June 2010.  
Were the reports 
used by your SAI 
as a basis for their 
audit work, 
including risk 
assessment? 
YES/NO 

AGRICULTURE and 
NATURAL RESOURCES 
(2) In the area of rural 
development, the Court of 
Auditors recommended 
maintaining efforts to further 
simplify rules and conditions 
(§3.74). Since rural 
development programmes 
are implemented under 
shared management, 
Member States have a role 
to play in this endeavour.  

Has your Member State 
introduced any relevant 
initiative addressed at further 
simplifying the 
implementation of rural 
development programmes? 
YES (If yes, please provide 
some examples)/NO       

(3) In the Court's 
audit sample for the 
Cohesion chapter, 
some eligibility errors 
are attributable to 
stricter national 
eligibility rules (e.g. 
co-financing rules) in 
comparison with 
eligibility rules set at 
the EU level. For 
2007-2013, the rules 
set by the regulation 
at Community level 
allow the Member 
States greater scope 
for specifying the 
eligibility conditions 
according to the 
specific needs of their 
programmes.  

Were your national 
eligibility rules stricter 
than those set at the 
EU level? YES - If 
yes, what was the 
reason?:   (a) 
eligibility rules at the 
EU level were not 
specific enough for 
the needs of the 
programmes? (b) 
eligibility rules at the 
EU level could not be 
properly understood 
by the beneficiaries? 
(c) any other reasons/ 
NO 

COHESION 

(4) In the Cohesion 
chapter ( §4.21) the 
Court also notes that 
"non respect of public 
procurement rules 
alone accounts for 
43% of all 
quantifiable errors 
and makes up for 
approximately three 
quarters of the 
estimated error rate"   

(5) In the Cohesion 
chapter (§4.26), the 
Court's audit showed 
that for 11 out of 16 
OPs audited, the 
verifications carried 
out by the Managing 
authorities were only 
partially compliant 
with the regulatory 
requirements.  

(6) The Court recommends 
that the Commission should 
encourage national 
authorities to rigorously 
apply corrective mechanisms 
before certifying the 
expenditure to the 
Commission. 

  In your opinion, 
what can be done to 
improve this 
situation? (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? (e) any 
other suggestions        

What do you think 
could be done to 
ensure effective 
verifications by 
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 (f) any 
other reasons 

What can be done to better 
assist you in applying 
corrective mechanisms in the 
context of your management 
verifications? a) more 
training by the Commission 
for national/regional 
authorities on control issues 
and correction of errors 
detected (b) clearer 
guidelines from the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? c) increased 
control supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 
(d) any other suggestion 

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NO 

Not applicable  YES. The Court of 
Auditors has used 
the information and 
data provided by 
the European 
Commission since 
2006 when 
carrying out audits. 
The Court of 
Auditors referred 
most recently to 
this data in its EU 
financial report, 
volume 2010/12, p. 
51et seq. 
Examples: Series 
Volume 2010/2, 
2009 EU Financial 
Report, Series 
Volume 2009/05, 
2008 EU Financial 
Report. 

Remark: since 
Austria was not 
audited, only general 
information can be 
provided here. The 
rules on public 
procurement are on 
the whole extremely 
complex. Any 
simplifications can 
therefore be carried 
out at European level 
only. 

Remark: since 
Austria was not 
audited, only general 
information can be 
provided here. The 
national eligibility 
rules for 
implementing the 
ERDF in Austria are 
largely based on the 
provisions of the 
Eligibility Regulation 
(Commission 
Regulation (EC) No 
448/2004) for the 
2000 – 2006 
programme period. 

Remark: since 
Austria was not 
audited, only general 
information can be 
provided here. The 
complexity of the 
various types of 
projects represents a 
great challenge to the 
audit bodies, and can 
dealt with only by 
means of committed 
and well trained staff. 
The high degree of 
complexity requires a 
large number of 
specialists. In any 
case, it cannot be 
reduced or simplified 
merely by means of 
internal guidelines or 
training courses.  

Remark: since Austria was 
not audited, only general 
information can be provided 
here. The wording of this 
question does not make it 
clear whether management 
verifications refers to 
verifications of the managing 
authorities. If this is so, then 
it is the case in Austria that 
the management 
verifications must be 
concluded before the 
certifying authority declares 
the expenditure to the 
Commission. If, on the other 
hand, the above mentioned 
verifications should include 
ex post checks by the audit 
authorities, then the answer 
is that the Austrian audit 
authority monitors the 
corrections to be made by 
the managing authorities or 
the certifying authorities. 

Austria 

In its positions regarding 
Austria's Presidency of 
the EU in 2006, 
published under the 
2006/1 position series, 
the Court of Auditors 
commented in detail on 
the single audit model 
proposed by the ECA in 
2004 and the related 
proposal for an 
integrated EU internal 
control framework, and 
also expressed its 
opinion on current 
developments regarding 
EU financial control in its 
EU Financial Reports 
(most recently in the 
2009 EU Financial 
Report) and its positions 
(most recently the 
position on reforming the 
EU Financial Regulation, 
series 2010/1).  
In its position regarding 
Austria's Presidency of 
the EU in 2006 the Court 
of Auditors states, among 
other things, that the 
inspection of 
administrative and 
control systems for EU 
resources introduced in 
the Member States 
should be carried out 
through external public 
financial control. The 
Court of Auditors 
approves of the efforts 
made by the EU bodies 
to improve administration 
and control, in particular, 
where EU funds are 
subject to shared 
management. However, 
it points out that its role 
as an external financial 
control body does not 
form part of the EU's 
integrated internal control 
framework –  

The Court of 
Auditors is not 
required to 
compile an 
audit report for 
the closing of 
the Federal 
accounts. The 
tasks that the 
Court of 
Auditors 
performs in 
respect of the 
closing of the 
Federal 
accounts are 
laid down in 
Chapter VI of 
the Federal 
Constitution 
and in the Court 
of Auditors Act. 
The annual 
Federal 
accounts are 
verified by 
selecting cases 
from all 33 
subsections of  
the Federal 
budget account 
on the basis of 
statistics and in 
proportion to 
the amounts 
involved 
(Federal 
Accounting 
Agency, bodies 
responsible for 
the budget) and 
by analytical 
audit measures. 
Samples are 
selected on the 
basis of a risk 
oriented audit 
approach and 
contain around 
4 000 - 5 000 
records per 
audit. The 

EN 

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in the sense of internal 
administrative control – 
and that, with regard to 
cooperation between the 
independent external 
public financial control 
bodies of the EU and 
Austria, Article 287(3) 
TFEU  
(cooperation in a spirit of 
trust while maintaining 
independence) and the 
internationally recognised 
audit principles should be 
applied. In the absence 
of proposals regarding a 
more concrete structure  
and regarding the scope 
of the single audit model 
proposed by the ECA in 
its Opinion No 2/2004, 
the  
Court of Auditors cannot 
comment in greater detail 
on the question of single 
audit. 

departments' 
internal control 
system is 
checked for the 
purposes of risk 
assessment.  
The relevant 
department is 
informed of any 
weaknesses or 
shortcomings in 
its internal 
control system 
and of the 
systemic or 
accounting 
errors. 
Accounting 
errors are 
corrected by 
the accounting 
departments 
during the 
procedure for 
eliminating 
shortcomings.  

Belgium 

NO  

NO    

NO  

NO  

No answer provided 

Région Bruxelles : 
NO 
Région Wallone: NO 
(pour la période de 
programmation 2000-
2006)  

Région Bruxelles  
YES (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? 
Région Wallone   
YES  (a) more 
training for 
national/regional 
authority staff by the 
Commission? (b) 

Région Bruxelles 
YES a) more precise 
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 
NO (b) less rigid 
eligibility rules at EU 
and national level 
Région Wallone YES 
(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 
NO (d) additional staff 
resources at national 

Région Bruxelles YES a) 
more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? c) increased 
control supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 
Région Wallone YES a) 
more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 

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level e) revised 
internal guidelines for 
managing 
verifications (f) any 
other reasons: Les 
réponses positives au 
point 5 signifient que 
des améliorations 
peuvent bien sûr 
toujours être 
apportées par rapport 
à la situation de la 
période 2000-2006, 
mais de gros efforts 
ont déjà été faits 
dans ce domaine au 
niveau de la 
Commission et de la 
Région wallonne. 

correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities?  
(d) any other suggestion: Les 
réponses positives au point 6 
signifient que des 
améliorations peuvent bien 
sûr toujours être apportées 
par rapport à la situation de 
la période 2000-2006, mais 
de gros efforts ont déjà été 
faits dans ce domaine au 
niveau de la Commission et 
de la Région wallonne. 

YES. a) more precise 
eligibility rules at EU 
and national level (e) 
revised internal 
guidelines for 
managing 
verifications 

YES. a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 

Should training 
include 
national/regional 
authority staff and 
beneficiaries? (c) 
Should clearer 
guidelines be 
provided to Member 
States by the 
Commission? 
NO (d) Should more 
guidelines be 
provided to Member 
States by the 
Commission? (e) any 
other suggestions : 
Les réponses 
positives aux 
questions du point 4 
ne doivent pas être 
interprétées comme 
traduisant le fait qu’il 
n’existe pas déjà 
d’effort de la 
Commission et des 
Etats membres mais 
comme une 
amélioration possible.   

YES. (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?  
(e) any other 
suggestions 
The Managing 
Authorities should 

NO 

No answer provided 

Bulgaria 

      Up to 2% 

YES.The National Audit 
Office, as the supreme 
audit authority, considers 
that the ‘single audit' 
approach relates to the 
internal control context. 
The conditions under 
which the National Audit 
Office can make use of 
work done by other 
auditors are laid down in 
an audit manual and 
conform to international 
auditing standards. 

The 
materiality 
threshold 
applied by 
auditors is 
2%, unless 
the National 
Audit Office 
decides 
otherwise.  
Auditors may 
also set a 
lower 
materiality 
threshold for 
specific 
audits.               

YES (a) eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes?  
(c) any other reasons:
This is the first 
progamming period in 
Bulgaria’s case, and 
the lack of experience 
has resulted in 
stricter requirements 
being imposed on 
beneficiaries, more 
complex procedures 
and difficulties in 
applying them.     

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Cyprus 

Questions 1 (a) -1 (c) 
have been sent to the 
National Supreme Audit 
Authority as the 
competent body. The 
Authority's replies to 
those questions will be 
forwarded to you as soon 
as they are received.  

Questions 1 (a) -1 
(c) have been sent 
to the National 
Supreme Audit 
Authority as the 
competent body. 
The Authority's 
replies to those 
questions will be 
forwarded to you 
as soon as they 
are received.  

Questions 1 (a) 
-1 (c) have 
been sent to 
the National 
Supreme Audit 
Authority as the 
competent 
body. The 
Authority's 
replies to those 
questions will 
be forwarded to 
you as soon as 
they are 
received.  

Questions 1 
(a) -1 (c) have 
been sent to 
the National 
Supreme 
Audit 
Authority as 
the competent 
body. The 
Authority's 
replies to 
those 
questions will 
be forwarded 
to you as 
soon as they 
are received.  

No answer provided 

YES. (a) eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes? 
NO. (b) eligibility 
rules at the EU level 
could not be properly 
understood by the 
beneficiaries?  

take steps to provide 
training for 
beneficiaries on the 
conduct of 
procedures for 
awarding public 
contracts, including 
sufficient practical 
examples of errors 
that result in the 
imposition of financial 
corrections.  

YES. (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? 
NO. (d) Should more 
guidelines be 
provided to Member 
States by the 
Commission?  

YES. (b) less rigid 
eligibility rules at EU 
and national level (c) 
more guidance to 
beneficiaries  e) 
revised internal 
guidelines for 
managing 
verifications  
NO. (a) more precise 
eligibility rules at EU 
and national level (d) 
additional staff 
resources at national 
level 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

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Czech Rep 

YES 

YES. (a) eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes? 
(b) eligibility rules at 
the EU level could not 
be properly 
understood by the 
beneficiaries? 

YES. As part of the 
simplification process there 
is a gradual reduction in 
requirements being imposed 
upon claimants based on the 
Rules for Granting 
Assistance. There is also a 
reduction in the number of 
mandatory annexes from 
claimants. The Paying 
Agency makes greater use 
of information from public 
registers, with the aim of 
minimising the need for 
claimants of assistance to 
provide extra information.  

YES. (d) additional 
staff resources at 
national level e) 
revised internal 
guidelines for 
managing 
verifications  
NO. (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  

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 
(d) any other suggestion: 
An interpretation from the 
Commission that removes 
the possibility of other 
interpretations, and the 
introduction of a flexible 
consultation platform. 

YES. (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? 
NO. (d) Should more 
guidelines be 
provided to Member 
States by the 
Commission?  
(e) any other 
suggestions: 
The Commission 
could issue 
recommendations 
including examples of 
good practice in 
laying down 
procedures for 
awarding contracts, 
and in particular on 
control activities. It 
could also focus on 
how this kind of 
mistake can best be 
avoided, and what 
kinds of measures to 
introduce.  

The NKÚ 
standards 
enable the 
application of 
various 
materiality 
thresholds. In 
control action 
No 10/29, 
carried out as 
a joint audit 
with the ECA, 
the materiality 
threshold is 
set at 2 %. 

In the control 
standards of 
the Supreme 
Audit Office 
(NKÚ) the 
materiality 
threshold is set 
between 0.5 %  
and 2 % of the 
value which 
most 
appropriately 
reflects the 
scope of 
financial 
activities of the 
person under 
inspection or 
the purpose, 
effectiveness 
and efficiency 
of the project, 
programme, 
activity or 
function. 

YES. The ABAC 
report provides 
data from the 
European 
Commission’s 
central ABAC 
accounting system 
for 2009. The 
Czech Republic's 
payments for 2009 
are set out in items 
and sub-items 
corresponding to 
the structure of the 
Financial 
Perspectives for 
2007-2013; the 
summary overview 
represents the sum 
of recorded 
transfers to the 
Czech Republic, 
broken down into 
payments made to 
beneficiaries for 
implementation of 
programmes and 
projects directly 
managed by the 
European 
Commission and 
regular payments 
which are made 
under shared 
Commission and 
Member State 
management. 
Because of the 
structure of the 
data provided by 
the Commission, 
these reports are 
of very limited use 
for control activities 
and are used as a 
source of 
supporting 
information. 
In addition, 
because the 
information on the 
transfers to the 

EN 

61 

EN 

 
  
Czech Republic for 
2009 are 
monitored in ABAC 
only in relation to 
Cohesion Policy 
objectives and in 
relation to sources 
of finance 
(Structural Funds – 
ESF, ERDF, 
Cohesion Fund, 
etc.), the data is of 
only limited use to 
the NKÚ, since it  
lacks identification 
of the individual 
Operational 
Programmes 
financed by the 
ESF, ERDF and 
Cohesion Fund. 
Moreover, 
the key to the 
‘ABAC payment 
report’ table 
declares that the 
expenditure 
accounted for 
under the ABAC 
gives information 
on transactions 
involving legal 
entities; it does not 
give 
information on 
revenues to 
national budgets, 
and does not give 
the official position 
of a Member State. 
In addition, the 
NKÚ’s 
mandate to check 
assistance 
provided outside 
shared 
management is 
limited. 

EN 

62 

EN 

 
  
Denmark  

No answer provided 

No answer 
provided 

The Danish National Audit Office 
does not use a fixed materiality 
threshold in its financial audits. 
The National Audit Office plans 
and implements the audit of EU 
funds on the basis of the same 
materiality and risk 
considerations that apply to its 
audit of Government funds. The 
National Audit Office complies 
with international auditing 
standards and good auditing 
practice, and works using a risk-
based and systems-based 
approach to the audit of 
management and control 
systems in the administration, 
supplemented by random 
substantive tests to assess 
whether the accounts are correct. 
The National Audit Office does 
not calculate error rates for the 
areas it examines. 

YES. (a) eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes? 
The documentation 
requirements are 
defined in detail to 
assist beneficiaries. 
 (b) eligibility rules at 
the EU level could not 
be properly 
understood by the 
beneficiaries?  

Basically, the rules 
are judged to be 
sufficiently detailed, 
but their scope and 
the associated 
documentation is 
extensive and 
requires, in some 
cases, substantial 
effort on the part of 
the administrative 
units and 
beneficiaries. 
YES. (b) Should 
training include 
national/regional 
authority staff and 
beneficiaries? (c) 
Should clearer 
guidelines be 
provided to Member 
States by the 
Commission?  
NO. (d) Should more 
guidelines be 
provided to Member 
States by the 
Commission?  

YES. Since the organisation 
of the rural development 
programme and the national 
strategic plan for rural 
development for 2007–2013, 
Denmark has tried to apply 
schemes and administrative 
procedures that are as 
simple as possible. In that 
context, Denmark has 
worked to achieve 
simplification of the 
administrative regulatory 
framework of EU aid. This 
has taken place, inter alia, in 
the context of the 
discussions of proposed 
amendments to the texts of 
EU regulations, which are 
ongoing in the relevant 
Council working groups and 
in the Management 
Committee for Rural 
Development Programmes 
(RDC). 
Some simplification of the 
implementation of these 
programmes has been 
ensured by the fact that the 
paying agency and national 
Managing Authority of the 
EAFRD programme are 
located in the same building 
of the Danish Food Industry 
Agency (FERV) as the 
management of the EAGF 
funds. Additionally, the 
individual parts of the 
administration of the EAFRD 
and EFF programmes are 
managed by the same 
relevant office at FERV, 
which ensures good 
coordination.  

Guidance and a collection of 
examples is recommended 
to ensure more or less 
uniform administrative 
controls among Member 
States. 
YES. a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected?  
NO. c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

The controls to be 
undertaken by the 
Managing Authority 
are established by 
the Regulation, and 
the controls are 
subject to audit by the 
national authorities as 
well as by the 
Commission and the 
Court of Auditors. Our 
assessment is that 
control in Denmark of 
the national Social 
Fund and Regional 
Fund programmes is 
sufficiently effective 
to prevent and correct 
any errors. Efficient 
control assumes that 
the necessary 
competencies and 
personnel resources 
will be allocated to 
the area. 
Furthermore, an 
appropriate level of 
control (and 
associated 
confidence) must be 
agreed in relation to 
the costs and risks of 
control in the context 
of the systems and 
procedures of the 
managing authority. 
YES. a) more precise 
eligibility rules at EU 
and national level - 
The work of 
simplifying the aid 
rules and making 
them more effective 
must continue where 

EN 

63 

EN 

 
  
Denmark is attempting to 
achieve coherence in the 
EAFRD programme and 
provides frameworks  
for integrated initiatives 
across the programme's 
axes. This means that the 
national application  
procedures in a number of 
cases involve several 
different legal bases from the 
Regulation.  
Denmark's ambition to use 
the aid provisions in Council 
Regulation 1698/2005 in 
combination  
with integrated arrangements 
has, however, entailed the 
need for a complicated 
administrative  
setup due to conditions set 
by the Commission services. 
The inclusion of new EAFRD 
funds in  
the programme for the 2010–
2013 programming period as 
a consequence of the CAP 
Health  
Check has also required 
major changes in the rural 
development programme, 
which has not  
made things simpler. It 
turned out, when this 
programme change took 
place, that the aid  
provisions in the Council 
Regulation could not be 
used, to a sufficient degree, 
for Denmark's  
implementation of the Water 
Framework and Natura 2000 
Directives, as was our 
original intention.  
The Commission was 
notified in 2009 of Denmark's 
intentions concerning a 
number of extensions  
of the aid provisions in the 
rural development 
programme. The changes 
were not immediately  

64 

possible.  
(b) less rigid eligibility 
rules at EU and 
national level  
(c) more guidance to 
beneficiaries - If a 
lack, or need, of 
further guidance is 
established, it should 
be provided. 

EN 

EN 

 
  
approved by the 
Commission, which for 
various reasons could not 
immediately approve the  
intended measures in the 
following areas: 1) 
establishment of wetlands, 2) 
establishment of  
biogas plants, 3) 
establishment of uncultivated 
border strips, 4) 
compensation for loss of 
income  
on agricultural land as a 
result of periodic flooding of 
land near waterways in river 
valleys and 5)  
compensation for 
sustainable operation of 
Natura 2000 forest and 
Natura 2000 agricultural 
land.  
The work of the Danish 
authorities to achieve these 
objectives continues, but this 
of course makes  
efforts to implement 
measures under the 
programme more difficult. 
Furthermore, due to the 
Commission services' wish 
for much more stringent 
financial control of measures 
in the national programmes, 
even very small financial 
adjustments to the 
programme  
input require, in fact, a 
change in the programme. 
The Commission services 
have also requested  
further detailed information 
on financial planning in 
addition to what may be 
required under the 
Regulation. Simplifications in 
the approval procedures for 
programme changes have 
therefore  
been followed by 
requirements for detailed 
budgeting at measure level – 

65 

EN 

EN 

 
  
and often sub-measure level 
- with related sets of 
indicators, which means that 
there is extremely limited 
flexibility in implementation 
and an increased control and 
reporting burden. 
Finally, the Commission has, 
on an ongoing basis, set 
more stringent requirements 
for the  
implementation and content 
of the controls, not least in 
the area of acreage, and 
most recently at the time of 
the amendment of the 
Council Regulation which 
took place at the end of 
2010. Such increases in 
stringency are often reflected 
at control visits in the form, 
inter alia, of  
requirements over and 
above those in the actual aid 
conditions regarding what is 
to be  
covered by the on-the-spot 
checks.  

NO 

NO 

Estonia 

When the 
annual 
accounts and 
the legality of 
transactions are 
being audited, 
materiality is in 
the range 0.5% 
- 1% and 0.25% 
- 0.5% 
respectively of 
the authority’s 
budget. 

YES. The SAI, the 
National Audit Office, 
supports the idea of a 
single audit principle. 
Comment: This is the 
principle of internal 
control and internal audit 
systems for the use of 
EU funds. The SAI of the 
Member State is not part 
of this system, but as an 
independent external 
auditor it follows its 
mandate and carries out 
tasks on the basis of 
national Acts and 
international and its own 
audit standards. The 
National Audit Office 

YES - see the 
comment in 
the previous 
column              

NO. The exchange 
of such information 
should take place 
between the 
European 
Commission and 
the Estonian 
Ministry of 
Finance, from 
which the National 
Audit Office 
obtains the 
information it 
needs. 

YES  (a) more 
training for 
national/regional 
authority staff by the 
Commission? (b) 
Should training 
include 
national/regional 
authority staff and 
beneficiaries? 
NO (c) Should clearer 
guidelines be 
provided to Member 
States by the 
Commission? (d) 
Should more 
guidelines be 
provided to Member 
States by the 

YES (a) more precise 
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 NO (b) 
less rigid eligibility 
rules at EU and 
national level 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

EN 

66 

EN 

 
  
No answer 
provided 

takes account of the 
above in its own audits 
and when deciding to use 
the work of other 
auditors. 

NO. The single audit 
principle is efficient and 
cost-effective. However, 
we would point out, for 
example, that the way 
the ISSAI standards are 
interpreted by the State 
Audit Office (VTV) differs 
from the European Court 
of Auditors' practices and 
the institutions cannot 
therefore directly apply 
the results of each 
other's inspections. 
Adopting the practice 
would thus require 
considerable adjustments 
to inspection practices 
and the classification of 
errors.  Care would also 
have to be taken to 
ensure that the 
independence and 
autonomy of the national 
supreme audit institution 
was not compromised. 
Another point to note 
about the single audit is 
that the national 
inspection authorities 
have not carried out the 
Member States' audits 
referred to in the 
Financial Regulation and 
the Treaty on the 
Functioning of the 
European Union, but 
instead have acted in 
relation to national 
parliaments alongside 
the Court of Auditors as 
the senior external 
inspection authorities that 
assess the effectiveness 
of the primary checks 
and hence the entire 
single audit system in 

Finland 

EN 

YES. The VTV has 
taken note of the 
reports produced 
and sent by the 
Commission and 
will use them as a 
tool for planning 
inspections. We 
would reiterate 
here that EU 
funding is not a 
separate subject 
for inspection, but 
part of the annual 
financial audit. 

YES. The 
VTV checks 
EU resources 
as part of its 
own financial 
audit work, 
not as 
separate 
inspections. 
There are no 
fixed 
materiality 
thresholds in 
the error 
rates. Instead 
the materiality 
of errors is 
looked at 
case by case 
on the basis 
of the 
inspection 
authority's 
own 
guidelines. So 
the VTV does 
not subject 
EU resources 
to inspections 
based on the 
statistical 
method of 
monetary unit 
sampling 
(MUS), nor 
does it use 
this in its 
other financial 
audit 
activities.  

YES. (a) Eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes. 
NO. (b) eligibility 
rules at the EU level 
could not be properly 
understood by the 
beneficiaries?  
(c) any other reasons:
Article 56 of Council 
Regulation No 
1083/2006 on the 
2007-2013 
programme stipulates 
that the rules on the 
eligibility of 
expenditure must be 
laid down at national 
level, so 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. The 
Commission also 
stipulated this in the 
description of the 
management and 
supervisory system. 

YES. The Ministry of 
Agriculture and Forestry has 
carried out two different 
reviews, the first of which 
concerned agricultural 
support and the 
administrative burden 
associated with it. A memo 
by the administrator 
contained 22 proposals 
which were incorporated in 
national legislation in 2008 
and 2009.  Proposals for 
simplifying Community 
regulations were also made 
to the Commission in various 
communications. 
(Administrator's report on 
simplifying the agricultural 
support and monitoring 
systems, 21 December 
2007) 
The second review, carried 
out in 2009, looked at the 
administrative burden of the 
enterprise support and 
project aid contained in the 
rural development 
programme. It took the form 
of a questionnaire, which 
received over 500 replies, 
and a working group. The 
working group's 
memorandum (2009:12) 
contained a total of 34 
proposals; of these the ones 
relating to regulations were 
mainly put into effect in the 
first half of 2010, while those 
relating to project aid, 
application forms and 
procedures connected with 
implementation will be 
applied by the end of the 
year. 
Proposals have been made 
to the Commission in 

67 

Commission?  

YES. (b) Should 
training include 
national/regional 
authority staff and 
beneficiaries?  
NO.(a) more training 
for national/regional 
authority staff by the 
Commission?  (c) 
Should clearer 
guidelines be 
provided to Member 
States by the 
Commission? (d) 
Should more 
guidelines be 
provided to Member 
States by the 
Commission?  
(e) any other 
suggestions: 
 Public procurement 
rules are not confined 
to the area of 
cohesion policy; they 
apply to all public 
contracts. 
Consequently, 
training and 
guidelines on such 
contracts should not 
be specific to 
cohesion policy, but 
deal with public 
procurement more 
generally. 
Responsibility for 
ensuring that people 
know about public 
procurement and that 
this knowledge is 
kept up to date rests 
with the Member 
States. 
As regards 
compliance with the 
rules on public 

YES. (b) less rigid 
eligibility rules at EU 
and national level  
NO. (a) more precise 
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  
(f) any other reasons:
The failings detected 
by the Court of 
Auditors in the work 
of the managing 
authorities should first 
be specified more 
precisely. It is difficult 
at this point to 
suggest 
improvements when 
we do not know what 
the problems are and 
whether they are 
caused by ridiculous 
rules or mistakes in 
implementation. Nor 
is it possible to 
assess the impact of 
failings on the 
eligibility of 
expenditure or the 
risk of ineligibility on 
the basis of the 
information supplied. 
The focus in cohesion 
policy rules should be 
on clear principles 
and compliance with 
them, not on detailed 
regulations, because 
these will never be 
able to cover all the 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

EN 

 
  
their inspections.  

accordance with the review,  
for regulations on 
implementation in the current 
period, but simplification at  
Community level may have 
to wait until the regulations 
governing the next  
period, the first drafts of 
which are expected to be 
debated in summer 2011.  
For its part, the Commission 
has made the 
implementation of the 
programme  
in 2010 more complicated, 
for example as regards the 
use and follow-up of  
additional resources for new 
challenges. 
The programme evaluation 
has also taken a position on 
implementation and  
has made proposals for its 
future development. The 
mid-term evaluation states  
that the reviews and their 
implementation will improve 
the programme's  
feasibility. 

situations that have to 
be assessed. 
Point e) is too vague 
to be able to answer 
sensibly. It is not 
clear whose internal 
guidelines it is 
referring to, what the 
subject matter is and 
how they would be 
revised. 

procurement, it is 
important to realise 
that they are open to 
interpretation, which 
will always entail the 
risk of them being 
incorrectly applied. 
An indication of this is 
that the legal cases 
relating to 
procurement 
procedures are often 
long and complex 
and require an in-
depth legal 
understanding of 
procurement  
matters.   
In the case of the 
errors relating to 
public procurement 
identified by the Court 
of  
Auditors, too, the 
findings should be 
made more 
transparent and more 
specific,  
so that lessons can 
be learnt from these 
cases. At the moment 
the findings are  
at a general level 
only.  
The errors identified 
should be described 
to all Member States 
and it should be  
specified whether the 
errors are such that 
the national 
authorities did not 
have  
sufficient information 
to detect them when 
they reported the 
expenditure to the  
Commission (§4.23). 

EN 

68 

EN 

 
  
        
No answer 
provided 

No answer 
provided 

YES. Les rapports 
détaillés sur les 
paiements sont 
transmis aux 
chambres 
compétentes de la 
Cour. Ils font partie 
des informations 
que l’auditeur doit 
collecter pour la 
réalisation de son 
audit,  sans que 
leur utilité 
spécifique pour le 
contrôle puisse 
être isolée. 

YES. La Cour des 
comptes française 
considère que le principe 
de l’audit unique est un 
dispositif applicable au 
contrôle du budget 
européen, ainsi que le 
décrit l’avis n°2/2004 de 
la Cour des comptes 
européenne, ce principe 
concerne essentiellement 
l’organisation du contrôle 
interne. L’avis de la Cour 
précise (article 13) que 
les ISC nationales n’ont 
aucun rôle formel dans le 
contrôle interne ou l’audit 
interne du budget de 
l’Union, mais doivent 
coopérer avec la Cour 
des comptes 
européenne. 
Vu de manière générale, 
le principe de l’audit 
unique repose sur 
l’articulation harmonieuse 
des contrôles, afin 
d’éviter les redondances 
et les trous noirs. Il fait 
partie des normes de 
contrôle 
internationalement 
reconnues, et la Cour 
des comptes française y 
souscrit évidemment. 
L’autorité d’audit (CICC) 
estime qu’on ne peut 
qu’être favorable à l’audit 
unique pour les raisons 
suivantes : 
- il supprime la 
redondance des 
contrôles, évite aux 
audités les contrôles 
successifs et permet une 
meilleure utilisation des 
moyens de contrôle 
disponibles, 
- en homogénéisant les 
contrôles, il sécurise les 
contrôleurs intervenant 
en amont, mais aussi les

France  

EN 

L’article 56-4 du 
règlement 1083-2006 
dispose que les 
règles d’éligibilité des 
dépenses sont 
établies au niveau 
national, sous 
réserve des 
exceptions prévues 
dans les règlements 
spécifiques à chaque 
Fonds. Aussi, la 
réglementation 
relative à l’éligibilité 
des dépenses, si elle 
ressort du niveau 
national, n’en est pas 
moins qu’une 
transposition de la 
réglementation 
communautaire 
sectorielle. Le décret 
d’éligibilité des 
dépenses du 3 
septembre 2007 ne 
représente que la 
prise en compte, en 
un document unique, 
des règles nationales 
et communautaires. 
En outre, il convient 
d’ajouter que les 
règles d’éligibilité 
adoptées en début de 
programmation pour 
la France, reflètent 
considérablement 
celles qui prévalaient 
à l’échelon 
communautaire pour 
le compte de la 
précédente période 
de programmation.  

Au final, on peut 
s’interroger s’il ne 
serait pas plus simple 
de revenir au 
système prévalant 
sur la période 2000-
2006  avec des 
règles d’éligibilité 

YES. Le MAAPRAT est 
engagé cette année encore 
dans l'exercice de 
simplification par le biais de 
l'action interne de la Mission 
« Simplifions ».  
Certains des chantiers 
conduits en 2010 dans ce 
cadre, concernent le 
développement rural.  
De nombreuses pistes se 
focalisent sur le 
développement de la 
télédéclaration en France : 
simplification de l'accès aux 
orthophotos, création d'une 
service de mandat de 
télédéclaration,simplification 
de la procédure 
d'identification des nouveaux 
télédéclarants, 
- mise en ligne du dossier 
PAC (pré-rempli, 
téléchargeable et 
imprimable). 
 Simplification de la 
procédure de notification 
dans le cadre du dispositif de 
soutien à l'agriculture 
biologique. 
- Dématérialisation de la 
procédure des demandes de 
Prêts bonifiés.  
- Allègement des charges 
administratives de gestion 
des mesures surfaces du 
2nd pilier (convergence 
d'outils informatiques)  
- Unification des demandes 
de financement pour les 
dossiers FEADER dans les 
DOM. 
- Mise en place d'une 
procédure dématérialisée de 
transmission de données 
fiscales entre services 
administratifs.  
- Suppression de l'obligation 
d'être à jour dans le 
paiement des 
cotisations sociales, pour les 
demandeurs du dispositif 

69 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

YES  (c) Should 
clearer guidelines be 
provided to Member 
States by the 
Commission? 
NO  (a) more training 
for national/regional 
authority staff by the 
Commission? (b) 
Should training 
include 
national/regional 
authority staff and 
beneficiaries? (d) 
Should more 
guidelines be 
provided to Member 
States by the 
Commission? 

YES  (a) more 
precise eligibility rules 
at EU and national 
level (c) more 
guidance to 
beneficiaries NO (b) 
less rigid eligibility 
rules at EU and 
national level (d) 
additional staff 
resources at national 
level (Les ressources 
en personnels sont 
mobilisées au regard 
des missions 
assignées et des 
situations régionales. 
Sans que soient 
exclus quelques 
renforcements 
ponctuels là où des 
difficultés sont 
constatées qui ne 
peuvent être résolues 
par d’autres moyens 
(évolution des 
modalités de gestion, 
recours à un 
prestataire..), il n’est 
pas actuellement 
envisagé 
d’augmenter les 
effectifs de 
personnels.) 

EN 

 
  
ICHN. 
Simplification des documents 
et de la procédure de gestion 
des forêts publiques et 
privées. 

communautaires pour 
tous les Etats 
membres. Un 
règlement unique 
permettrait d’éviter 
des divergences 
d’interprétation et 
faciliterait la 
programmation, en 
particulier pour les 
programmes de 
coopération 
territoriale. 

audités,  
- en autorisant la prise en 
compte de l’ensemble 
des résultats des 
contrôles, il donne au 
niveau 
supérieur d’audit une 
base d’observation 
beaucoup plus large et 
donc réduit le degré 
d’incertitude sur 
les résultats.  
S’agissant des fonds 
structurels, le principe 
d’audit unique inspire : 
- l’article 73 du règlement 
général 1083/2006 : sous 
une série de conditions, 
la Commission peut 
s’appuyer sur les travaux 
réalisés par les autorités 
d’audit nationales, 
notamment leurs avis ;  
- la stratégie d’audit de la 
Commission : après 
révision des 
méthodologies et 
réexécution de travaux 
de l’autorité d’audit, la 
Commission peut 
s’appuyer sur ceux-ci 
pour établir sa propre 
assurance. 
Ces deux applications 
restent cependant en 
retrait des possibilités et 
peut-être de l’esprit du 
principe 
d’audit unique. 
Par exemple:   
- l’article 73 soumet la 
mise en œuvre effective 
du principe d’audit 
unique, qui est relatif à 
l’activité 
d’audit et de contrôle, au 
« bon fonctionnement » 
du système de gestion et 
de contrôle dans son 
ensemble ; cette 
condition paraît contre-
productive dans la 

EN 

70 

EN 

 
  
mesure où elle doit 
conduire la 
Commission à s’interdire 
de s’appuyer sur des 
auditeurs nationaux 
fiables (capables de 
souligner le 
cas échéant les défauts 
de leurs systèmes 
nationaux) au seul motif 
que les systèmes de 
gestions 
présentent des défauts ; 
- la stratégie d’audit de la 
Commission privilégie 
l’aspect « hiérarchique » 
du pyramidage des 
contrôles au profit du 
niveau supérieur au 
détriment de la 
coordination et de 
l’échange de bonnes 
pratiques qui devraient 
être au cœur de la 
gestion « partagée ». La 
Cour souligne d’ailleurs 
qu’un 
dispositif intégré de 
contrôle interne 
nécessite que ne soit pas 
ignorés les objectifs et 
responsabilités 
de chacun des étages  
de la pyramide.  
Pour éviter ces écueils, 
la mise en œuvre 
effective du principe 
d’audit unique suppose 
des 
discussions approfondies 
entre professionnels et 
entre les différents 
niveaux de responsabilité
(Commission, Etats 
membres), avant que le 
cadre n’en soit arrêté.  

EN 

71 

EN 

 
  
 
The Federal 
Court of 
Auditors does 
not know if or 
at what level 
the courts of 
auditors in the 
Länder have 
decided to 
apply 
materiality 
thresholds 
within their 
remit.  

The Federal 
Court of 
Auditors uses 
its own 
discretion in 
carrying out 
checks on the 
legality and 
regularity of 
transactions. It 
has not laid 
down any 
materiality 
threshold(s) for 
the assessment 
of its audit 
findings.  

YES. Germany sent the 
Commission three lists of 
proposals to simplify the 
relevant EU rules in spring 
2010. These included, for 
example, harmonising 
certain rules between the 
EAFRD and the Structural 
Funds and simplifying rules 
on the calculation of 
sanctions, as well as those 
on the charging of interest on 
recoveries. The Länder 
introduce simplifications in 
national implementation, as 
they are responsible in 
Germany for implementing 
the rural development 
programmes. 

YES. As with all 
other reports from 
the Commission 
and the European 
Court of Auditors, 
the Federal Court 
of Auditors has 
analysed these 
reports and used 
them in carrying 
out its work. As 
well as being 
useful for audit 
purposes, the data 
in the reports also 
found their way 
into the Federal 
Court of Auditor’s 
first EU Report, 
following a bilateral 
discussion with the 
Commission.  

Preliminary comment: 
while some aid is 
managed at the 
federal level in 
Germany, most of it is 
managed by the 
Länder. Given the 
differences between 
authorities, it is not 
possible to give 
uniform answers to 
the questions that 
follow. The situation 
varies in particular 
from one Land to 
another.The replies 
with a cross do not 
therefore apply to the 
whole of federal 
territory, only to some 
regional authorities. 
YES/NO  
(c) any other reasons: 
- National eligibility 
rules. 
- Specification of EU 
rules. 

Germany 

The aims of the single 
audit model seem to be a 
sensible way of reducing 
the burden as part of 
internal management and 
control systems.  
The principle is applied in 
accordance with the 
relevant EU rules in the 
internal financial controls 
carried out by the 
national authorities, e.g. 
as part of the cooperation 
between the certifying 
body and the internal 
audit service in the 
agriculture sector. 
Only these bodies can 
say whether they 
consider the single audit 
to be an effective tool. 
There are reservations 
about using this model 
for external financial 
controls. As others have 
found, the institution 
concerned must be 
convinced that the 
control level it is building 
on has functioned 
‘properly’. There is some 
doubt whether this 
complies with the 
requirement in the 
Constitution and the 
TFEU for external audit 
authorities to be 
independent.  
The Federal Court of 
Auditors in Germany 
does not have any 
‘preceding’ levels whose 
results it can use as a 
basis. It cannot, 
therefore, assess this 
idea on the basis of its 
own experience. 

YES/NO (d) 
additional staff 
resources at national 
level - No uniform 
response possible for 
all regional authorities 
(see also preliminary 
comment to question 
(3)). 
NO. (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 e) 
revised internal 
guidelines for 
managing 
verifications - Where 
appropriate, enable 
regular verification of 
the guidelines and, in 
particular, 
simplification. 
(f) any other reasons:
- Simplification of 
procurement rules. 
- More intensive 
training at national 
level. 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? - ‘Clearer 
guidelines’ is understood as 
meaning guidelines 
containing unambiguous 
wording. 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 
- This task is already carried 
out by the audit authorities. 
(d) any other suggestion: 
- Introduce a ‘deminimis rule’ 
for minor errors as part of the 
obligation to exercise 
discretion in foregoing 
adjustments relating to the 
past. 
- As financial corrections are 
not the appropriate way of 
avoiding errors and reducing 
error rates, improved 
targeted training on EU 
topics should be offered. 

YES. (c) Should 
clearer guidelines be 
provided to Member 
States by the 
Commission? - 
‘Clearer guidelines’ is 
understood as 
meaning guidelines 
containing 
unambiguous 
wording. 
NO. (a) more training 
for national/regional 
authority staff by the 
Commission? (b) 
Should training 
include 
national/regional 
authority staff and 
beneficiaries?(d) 
Should more 
guidelines be 
provided to Member 
States by the 
Commission?  
(e) any other 
suggestions: 
  - Clear and 
consistent legal 
provisions. 
- Regulations should 
be explained at the 
beginning of the 
programming period 
to ensure correct 
interpretation. 
- Structured and 
generally available 
information (audit 
findings and data 
from other MS) kept 
centrally by the 
Commission. 
- Simplification of 
procurement rules. 
- More intensive 
training at national 
level using practical 
examples. 

EN 

72 

EN 

 
  
       
Greece 

No answer provided 

The sectoral regulations set the 
materiality threshold for errors at 
2% and that threshold is used by 
the national audit authorities in 
Greece when auditing co-
financed programmes. 

No answer 
provided 

YES. In an endeavour to 
simplify procedures using the 
single farm declaration, in 
addition to it being 
mandatory to submit 
payment applications for 
agricultural policy measures, 
as much information as 
possible relating to those 
measures is also obtained 
and cross checks are carried 
out in parallel to verify that 
information, in order to 
reduce administrative costs. 

YES. a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected?  

YES. (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? 

The eligibility rules 
laid down in the 
Cohesion regulations 
used to achieve 
Cohesion policy have 
been incorporated as 
they stand into the 
national eligibility 
rules. From that 
perspective, the 
national eligibility 
rules cannot be 
considered stricter 
than the Community 
rules, but they may 
be more detailed, 
which is something 
necessary for them to 
be properly 
understood by the 
parties involved. It 
must also be noted 
that the majority of 
these detailed 
national eligibility 
rules were formulated 
by taking into account 
not just the national 
context but also 
experience from the 
eligibility rules which 
had been formulated 
at Community level in 
the 2000-2006 period 
so as to ensure 
continuity, and to 
ensure jointly 
comprehensible 
eligibility rules 
acceptable to the 
European auditing 
authorities. 
YES.  (a) eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes? 

The regulatory 
framework relating to 
managing authority 
verifications is strict, 
but is not very 
detailed. General 
phrases such as ‘… 
the managing 
authority is 
responsible for 
ensuring the 
legitimacy and 
regularity of the 
expenditure for co-
financed operations 
during the entire time 
they are being 
implemented' lead the 
national authorities to 
adopt rules and 
management 
procedures which 
seek not to verify 
expenditure but to 
fully audit it, which is 
something for the 
beneficiaries to do. A 
result of this is that 
managing authorities 
shoulder the burden 
of an immense 
volume of 
management work, 
which is frequently 
similar to the task of 
implementation, and 
they focus more on 
auditing expenditure 
and less on the 
achievement of 
programme results. 
Some typical 
examples include: 
- the need to audit 
public contracts 
concluded in the 
context of co-
financed projects 
before individual 
expenditures are 
examined;  
- the requirement for 

EN 

73 

EN 

 
  
administrative 
verification of all 
expenditure declared 
in grant-related 
operations, which, 
depending on the 
nature of the projects, 
may lead to an 
immense 
administrative burden 
and to a reduced 
ability to declare 
expenditure incurred 
to the European 
Commission and a 
reduced ability to 
absorb programme 
resources; 
- the lack of 
guidelines at 
European level about 
alternative verification 
methods which are  
better adapted to the 
special features of 
each project, based 
on acceptable 
sampling methods. 
In light of this, certain 
important aspects for 
effective verifications 
carried out by 
managing  
authorities are that 
the European 
Commission provide 
more guidance, that 
beneficiaries  
assume their own 
responsibilities, and 
that more precise and 
better guidance is 
provided  
to managing 
authorities about the 
eligibility of 
expenditure and how 
verifications are to be 
managed.  
YES. (a) more 
precise eligibility rules 
at EU and national 

EN 

74 

EN 

 
  
Hungary 

YES 

2% 

NO 

YES 

NO 

YES. (a) Eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes. 
NO. (b) eligibility 
rules at the EU level 
could not be properly 
understood by the 
beneficiaries?  

Ireland 

YES. The Comptroller 
and Auditor General 
audits in accordance with 
International Standards 
on Auditing (ISAs). 
Where it is appropriate to 
do so, and in accordance 
with the ISAs, the 
Comptroller and Auditor 
General can seek to rely 
on the work of other 
auditors.  

The materiality 
threshold most 
frequently used 
is 1%. 

YES. 
Variations can 
occur as 
materiality 
levels are 
assessed for 
each 
individual 
audit. 

It would be useful if 
the reports were 
received at an 
earlier date.  Audit 
work on central 
government 
departments is 
substantially 
completed in the 
first six months of 
the year as the 
C&AG’s annual 
report is published 
in September 

NO. This is an ongoing issue 
and Ireland has made a 
number of proposals to the 
Commission in this regard. 

NO. No eligible errors 
were attributed to 
stricter National 
Rules 

level (c) more 
guidance to 
beneficiaries  
e) revised internal 
guidelines for 
managing 
verifications  
YES.  (a) more 
precise 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 
NO. (b) less rigid 
eligibility rules at EU 
and national level  
(f) any other reasons: 
steps towards 
stability instead of 
cyclical change in the 
legal environment. 
YES. (b) less rigid 
eligibility rules at EU 
and national level (c) 
more guidance to 
beneficiaries 
NO. (a) more precise 
eligibility rules at EU 
and national level (d) 
additional staff 
resources at national 
level e) revised 
internal guidelines for 
managing 
verifications 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

YES. (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. (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? 

EN 

75 

EN 

 
  
 
 
 
No answer 
provided 

No answer 
provided 

Italy 

YES. The Court has not 
taken decisions on this 
matter. 
However, please note 
that under the provisions 
governing auditing of the 
Court of Auditors, the 
latter "may" make use of 
internal audit reports. 

The Italian 
Court of 
Auditors has 
adopted the 
MUS method 
for the 
purposes of the 
DAS, with the 
same 
materiality 
threshold as 
that required for 
the European 
Union. 

EN 

NO 

YES. In the area of rural 
development simplification 
initiatives have been 
introduced to facilitate 
access to credit through the 
Programme Agreements 
between the Ministry of 
Agricultural, Food and 
Forestry Policies (MIPAAF), 
the Institute for Studies, 
Research and Information on 
the Agricultural Market 
(ISMEA) and the Regions to 
facilitate access to credit for 
the 2007-2013 rural 
development programmes. 
Article 50 of Regulation (EC) 
No 1974/2006 provides that, 
as part of a rural 
development programme, 
the EAFRD may co-finance 
expenditure in respect of an 
operation comprising 
contributions to, among other 
things, guarantee funds. 
During the State-Regions 
Conference (CRS) held on 
12 July 2007, act 148/CRS 
was adopted, approving an 
outline programme 
agreement on measures to 
promote access to credit 
through the issue by ISMEA 
of guarantees, co-
guarantees and counter-
guarantees under the 2007-
2013 Rural Development 
Programme. 
The Programme Agreement 
was concluded between the 
MIPAAF, ISMEA and some 
regional administrations 
which asked to participate. 
It was drawn up in 
accordance with the outline 
programme agreement 
approved by the State- 
Regions Conference and 
allows the Italian regional 
administrations which signed 
it to make use of the ISMEA 
Guarantee Fund without 

76 

YES.  (b) clearer guidelines 
from the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected  
c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

YES (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? (e) any 
other suggestions: 
The training and 
guidelines must come 
from DG Internal 
Market   

NO  (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 (f) any 
other reasons: More 
subsidiarity regarding 
first-level controls, 
which should be 
transferred to the 
national systems in 
view of reinforcement 
of second-level 
controls and the 
activities relating to 
the issue of a 
compliance opinion 
on the management 
and control systems.  

EN 

 
  
having to pay ISMEA 
anything. Moreover, since 
the measure should be 
considered free of 
remuneration or economic 
content, signing up to it does 
not entail any charge to the 
MIPAAF. 
Another initiative concerns 
the application of the rules 
on penalties. 
The rules on penalties in 
rural development are 
governed by Law No 898 of 
23 December 1986,  
which converts into law 
Decree-Law No 701 of 27 
October 1986 on urgent 
measures concerning  
controls on Community 
assistance for the production 
of olive oil and administrative 
and criminal  
penalties relating to 
Community agricultural 
assistance, as amended. It 
was amended by Law  
No 96 of 4 June 2010 laying 
down provisions concerning 
the fulfilment of obligations 
deriving from Italy’s 
membership of the European 
Communities – 2009 
Community Affairs Law 
(Gazzetta Ufficiale  
No 146 of 25 June 2010 - 
Ordinary Supplement No 
138). 
The amendments in the 
2009 Community Affairs Law 
(to Articles 2(1) and 3(1)) 
entered into force on expiry 
of the 15-day vacatio legis 
following its publication in the 
Gazzetta Ufficiale, i.e. on 10 
July 2010. 
As regards rural 
development, we refer you to 
the following Article of the 
2009 Community Affairs 
Law:  
"Article 14: Provisions on 

77 

EN 

EN 

 
  
penalties for infringements 
relating to Council 
Regulation (EC) No 
1698/2005  
of 20 September 2005 on 
support for rural 
development by the 
European Agricultural Fund 
for Rural  
Development (EAFRD)." 
The AGEA coordinating body 
has alerted the Italian and 
European Courts of Auditors 
to certain problems and  
the need for simplifications. 
For example: 
1 - the need for greater 
stability in EU provisions and 
working papers; 
2 - the need for the EU 
provisions to better define 
the rules applicable to and 
responsibilities of the 
managing  
authorities and paying 
agencies, particularly as 
regards the coordination of 
their respective tasks. 

EN 

78 

EN 

 
  
YES 

YES. The State 
Audit Office uses 
the reports in its 
audits, including 
for risk 
assessment. 

Latvia 

YES. Pursuant to the 
Latvian Law on the State 
Audit Office, audits are 
carried out in accordance 
with international audit 
standards. The State 
Audit Office generally 
supports an approach 
whereby the single audit 
principle is 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 State Audit 
Office applies 
two materiality 
thresholds: one 
at 0.5% of total 
expenditure 
when auditing a 
financial 
statement in 
which four or 
more financial 
statements are 
consolidated, 
and another at 
2% for audits of 
all other 
financial 
statements. 

EN 

YES. Following approval of 
Latvia’s Rural Development 
Programme for 2007-13 
(LAP) on 15 February 2008, 
national legislation to 
implement the LAP was 
drawn up and approved and 
project applications were 
accepted for 18 measures 
under the LAP for the period 
from 2007 to 2010. 
To reduce the administrative 
burden on project applicants, 
substantive adjustments 
have been made to general 
legislation and legislation 
governing the 
implementation of particular 
measures, including 
legislation laying down 
procedures for managing the 
European Agricultural 
Guarantee Fund, the 
European Agricultural Fund 
for Rural Development and 
the European Fisheries Fund 
and granting EU aid for rural 
and fisheries development 
by means of public tenders 
and compensation 
payments. To simplify the 
terms for receiving aid, the 
need also arose to change 
the structure of legislation 
currently in force, which up 
until now had been fairly 
fragmented. Once the 
provisions of the legislation 
had been evaluated, a 
decision was taken to 
consolidate all of the 
provisions relating to aid 
applicants and laying down 
detailed conditions for the 
receipt of aid  
through the adoption of a 
Cabinet Regulation laying 
down the procedures for 
granting State and  
EU aid for rural and fisheries 
development. The most 
important change is that, 

79 

NO.   (a) eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes? 
(b) eligibility rules at 
the EU level could not 
be properly 
understood by the 
beneficiaries? 

YES (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? 

No answer provided 
fo a), b), c), d),e) 
 (f) any other 
reasons: Various 
provisions relating to 
the management of 
EU funds have been 
simplified, and the 
authorities involved in 
managing the funds 
have been provided 
with more 
explanatory material , 
so as to limit 
discrepancies. 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

EN 

 
  
from now on beneficiaries no 
longer have to conclude a 
contract with the Rural 
Support Service (LAD),  
as project implementation 
can begin as soon as the 
relevant application is 
submitted to the  
LAD, with the full financial 
risk being borne an without 
waiting for a decision to be 
taken on  
whether the project 
application has been 
approved or rejected. In this 
way aid applicants  
have been given complete 
discretionary powers, and 
any obstacles preventing aid 
applicants 
from carrying out activities 
under the project within more 
acceptable and  
optimal time-frames have 
been removed.  To reduce 
the amount of time needed 
to examine  
projects, changes have been 
made to the project 
assessment system by 
defining basic eligibility 
criteria, which are evaluated 
rapidly. Once eligibility 
against these criteria has 
been determined,  
the projects can be further 
refined and implemented.To 
intensify the acquisition of 
the resources  
available for implementing 
measures, the Regulation 
also gave aid applicants 
(excluding parafiscal 
bodies, public companies, 
local authorities, 
associations or foundations) 
the option of obtaining  
an advance for implementing 
activities under the project of 
no more than 20% of the 
total amount  
of State and EU funding 

80 

EN 

EN 

 
  
Lithuania 

YES 

YES - see 
previous 
column 

The materiality 
thresholds 
applied to the 
financial audit 
vary from 0.5% 
to 2% 
depending on 
the 
circumstances. 

EN 

NO. However, the 
National Audit 
Office, in its 
capacity as audit 
authority for EU 
structural 
assistance for 
2007-13 (Council 
Regulation (EC) 
No 1083/2006 of 
11 July 2006), 
uses the results of 
both ECA and 
European 
Commission audits 
for risk 
assessment, but, 
in this case, the 
National Audit 
Office is 
performing a 
function that is not 
characteristic of 
the Supreme Audit 
Institution. 

granted for the project, if the 
applicant submits a request 
for an advance  
to the LAD and anirrevocable 
bank guarantee 
guaranteeing that financial 
obligations are fulfilled 
equivalent to 100% of the 
amount of the advance. 

YES. 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, e.g. the 
Rules for the administration 
of the programme, the Rules 
for the procurement of 
goods, services or work, and 
the Procedure for 
establishing economic 
viability.  
Substantial amendments to 
the Rules for the 
administration of the 
programme simplified the 
preparation of the 
application, clarified the 
conditions for granting aid 
and provided for more rapid 
evaluation of applications. In 
the Order on the economic 
viability of projects, some 
indicators were withdrawn, 
the admissible values were 
increased for others and the 
period of time for evaluating 
the economic viability 
indicators was reduced. An 
amendment to the Rules for 
the procurement of goods, 
services or work increased 
the procurement values used 
to determine the 
procurement method.  
A more attractive procedure 
for granting support was 
drawn up for those applying 
for smaller aid amounts (up 
to LTL 150 000): the 
application form was 

81 

YES. (a) more 
precise 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 
NO. (b) less rigid 
eligibility rules at EU 
and national level 

NO 
(c) any other reasons:
The rules for the 
eligibility of 
expenditure for EU 
funding as laid down 
at EU level by EU 
regulations define the 
expenditure not 
eligible for EU 
funding and contain 
only fairly general 
provisions regarding 
expenditure for which 
EU funds may be 
allocated. 
Consequently, and in 
order to provide 
applicants and project 
managers with the 
clearest possible 
eligibility 
requirements for 
expenditure on 
projects co financed 
by EU funds and to 
establish the clearest 
possible project 
administration 
procedure, the 
expenditure eligibility 
requirements laid 
down in the EU 
regulations are 
explained in greater 
detail in the 
Lithuanian legislation. 
However, they are 
not stricter than the 
requirements set by 
the EU regulations. 

YES. (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?  
NO (d) Should more 
guidelines be 
provided to Member 
States by the 
Commission? 
(e) any other 
suggestions: 
In our opinion, the EU 
and national 
legislation on public 
procurements should 
lay down clearer 
procedures for 
conducting public 
procurements, 
particularly as 
regards applying the 
principles of 
transparency and 
equal treatment and 
other principles of 
public procurement 
and organising public 
procurement 
procedures. It should 
be noted that a 
significant number of 
the observations 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 
(d) any other suggestion 
The Guidelines for 
determining financial 
corrections to be made to 
expenditure co-financed by 
the Structural Funds or the 
Cohesion Fund for non-
compliance with the Rules 
on public procurement were 
provided hurriedly, were not 
comprehensive and needed 
to be discussed in more than 
one meeting with Member 
States. Although the final 
version of the Guidelines 
was available in November 
2007, it was recommended 
to follow them retroactively 
when determining the size of 
the financial corrections for 
the 2000-06 financing period.  
For the financial 
management and control 
procedures to be 
implemented effectively, the 
European Commission 
should draw up the relevant 

EN 

 
  
guidelines in time and submit 
them to the Member States 
in advance for agreement. 
The Member States should 
be  
given sufficient time to 
submit comments on the 
guidelines and should be 
given the  
opportunity to apply high-
quality and comprehensive 
guidelines. 

simplified and the business 
plan incorporated  
into it, the applicant does not 
need to sign a grant 
agreement (and becomes an 
aid beneficiary as soon  
as the decision to grant 
support has been adopted), 
the Implementing Rules 
governing the granting  
of aid were reduced in length 
and the time limits for 
implementation were 
shortened. 

regarding possible 
incorrect 
implementation of 
public procurement 
procedures related to 
questions raised by 
ECA and 
Commission auditors 
about the 
compatibility of 
national public 
procurement 
legislation with the 
EU provisions, even 
though the national 
legislation is 
harmonised with the 
EU legislation. We 
are of the opinion that 
every auditor from the 
Commission, the 
ECA and the audit  
authority should 
assess identical 
situations relating to 
the implementation of 
public  
procurements in the 
same way, as it is 
fairly common for 
what is regarded by 
one auditor  
as a minor and easily 
rectified observation 
to be treated by 
another auditor 
during another  
audit as a major 
infringement requiring 
financial corrections. 
Evaluation of 
observations  
made during audits 
by the European 
Commission, the 
ECA and the audit 
authority should be 
more  
uniform. Guidelines 
for the application of 
financial corrections 
for irregularities 

EN 

82 

EN 

 
  
Luxembourg  No answer provided 

No answer 
provided 

No answer 
provided 

No answer 
provided 

YES (a) eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes? 
(b) eligibility rules at 
the EU level could not 
be properly 
understood by the 
beneficiaries? (FSE) 
NO (FEDER) 

YES. En vu de la 
simplification administrative, 
le Ministère de l'Agriculture a 
décidé de retirer du 
cofinancement européen par 
l'intermédiaire du FEADER 
les mesures d'aides 
forestières prévues dans la 
version initiale du Plan de 
Développement Rural 2007-
2013. Les procédures 
administratives et de 
contrôle prévues par la 
règlementation européenne 
ne permettent pas de 
garantir une relation 
justifiable entre les montants 
d'aides engagés et les frais 
administratifs et de contrôle. 
Une analyse semblable sera 
projetée sur d'autres 
mesures d'aides du PDR 
luxembourgeois. 

Malta  

EN 

NO 

YES, it agrees, as long 
as this principle applies 
to internal controls only 
(including internal 
auditing) and not to the 
Supreme Audit 
Institutions (SAI), which 
should not be considered 
as part of the internal 
controls of the country 
concerned, and even 
less of the European 
Union. The SAI should 

When planning 
the audit for the 
year, the 
activities 
chosen for audit 
are those 
considered to 
be of a material 
nature (as 
regards the 
amount, or as 
an activity of a 
national 

NO. Although a 
reference is made 
to the detailed 
reports regarding 
payments of the 
European Union 
made in the 
country, this 
reference is 
actually made in 
order to make it 
clear whether any 
of the sectors can 

YES. The Paying Agency 
together with the Managing 
Authority of the European 
Agricultural Fund for Rural 
Development (EAFRD) have 
set up a discussion group to 
follow the submitted 
proposals as well as to 
evaluate the impact of what 
is being proposed by the 
Member States as well as by 
the Commission in this 
regard.      

YES.  (a) eligibility 
rules at the EU level 
were not specific 
enough for the needs 
of the programmes? 
(b) eligibility rules at 
the EU level could not 
be properly 
understood by the 
beneficiaries? 

83 

identified in  
public procurement 
procedures should 
also be drafted as 
clearly as possible 
and,  
furthermore, should 
be drawn up in time 
and not, as is often 
the case, halfway  
through the 
programming period.     

YES. (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? (FSE + 
FEDER)  (d) Should 
more guidelines be 
provided to Member 
States by the 
Commission? 
(FEDER) 
NO.  (d) Should more 
guidelines be 
provided to Member 
States by the 
Commission? (FSE) 

YES. (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 

YES a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? (FSE + FEDER) 
NO c) increased control 
supervision by the 
Commission on the follow-up 
of audit findings by the 
national/regional authorities? 
(FSE + FEDER) 

YES. (a) more 
precise eligibility rules 
at EU and national 
level (b) less rigid 
eligibility rules at EU 
and national level 
(FSE + FEDER) (c) 
more guidance to 
beneficiaries (d) 
additional staff 
resources at national 
level e) revised 
internal guidelines for 
managing 
verifications (FSE) 
NO (c) more 
guidance to 
beneficiaries (d) 
additional staff 
resources at national 
level e) revised 
internal guidelines for 
managing 
verifications (FEDER) 

YES. (c) more 
guidance to 
beneficiaries (d) 
additional staff 
resources at national 
level  
NO. (a) more precise 
eligibility rules at EU 
and national level   
In Malta’s case, there 
are rather clear rules 
on a national basis, 
which were approved 

YES  a) more training by the 
Commission for 
national/regional authorities 
on control issues and 
correction of errors detected 
(b) clearer guidelines from 
the Commission for 
national/regional authorities 
on control issues and 
correction of errors 
detected? 
NO  c) increased control 
supervision by the 

EN 

 
  
be included in 
subsequent years. 
However, since the 
reports are 
submitted in June, 
they are not 
considered as a 
source in the audit 
planning for the 
year in which they 
are submitted. 

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

be left to decide for itself 
what it should audit, both 
funds which are strictly 
public, as well as funds 
from the European 
Union. Naturally, the SAI 
may decide to rely on 
internal auditing or other 
auditing which might 
have been carried out 
already. However, this 
should be done at its 
discretion. 

nature). During 
the auditing, 
however, all the 
deficiencies 
identified are 
reported 
(except for 
those of a trivial 
nature). 
However, the 
Opinion of the 
Annual Audit 
Report on 
Public Funds, 
including funds 
from the 
European 
Union, which 
have been 
audited, is one 
general opinion 
of the SAI on all 
the audited 
accounts.  

Commission on the follow-up 
of audit findings by the 
national/regional authorities? 

by the European 
Commission itself in 
2008 when it 
approved the 
‘Description of 
Management and 
Control Systems’ 
(Annex XII) and 
which are revised 
from time to time. 
Therefore we feel that 
we have nothing to 
add to this. 
The EU may issue 
more guidelines on 
those elements which 
it found as the most 
problematic during its 
audit. On the other 
hand, however, more 
precise rules might 
compromise the 
element of flexibility 
and simplification 
which are necessary 
in the management of 
the Funds. 
(b) less rigid eligibility 
rules at EU and 
national level 
Malta introduced its 
eligibility rules 
because of changes 
in the Funds 
regulations that now 
stipulate that the 
eligibility rules are at 
the State’s discretion, 
even though the 
European Union 
provided a minimum 
threshold of eligibility 
in Regulations  (EC) 
1080/2006, 
1081/2006 and 
1084/2006. As 
mentioned in 
question 3, Malta 
introduced  
stricter rules than the 
minimum ones of the 
European Union. It 

EN 

84 

EN 

 
  
would therefore be  
contradictory for 
Malta to reply “yes” to 
this question  having 
itself introduced 
stricter rules. 
Furthermore, to reply 
to the main question 
in this section, the 
relaxation of the 
eligibility  
rules does not 
guarantee “effective 
verifications by 
management 
authorities”, indeed 
quite  
the contrary. 
e) revised internal 
guidelines for 
managing 
verifications 
The effectiveness of 
the verifications 
depends on the 
competence of the 
Management  
Authority and the 
Intermediate Bodies. 
The existence of 
eligibility rules and 
their quality  
are important, 
however these do not 
make much sense if 
whoever controls the 
Funds is  
not conversant with 
all the rules that 
regulate the Funds. 
Therefore the 
argument must be  
emphasised that it is 
the level of quality of 
the organisation that 
makes verifications  
effective, and not 
more rigid rules. 

EN 

85 

EN 

 
  
 
 
Netherlands  YES  

Materiality threshold Dutch Court of 
Audit (national resources) 
The Dutch Court of Audit records its 
findings on the financial information 
in the reports in the annual report 
(exceptions to the assessment are 
accurately described and are 
regular) if these fixed tolerance 
limits are exceeded. To ascertain 
whether or not errors and 
uncertainties concerning the 
description and regularity exceed 
the tolerance limits, the audit must 
be carried out with a certain degree 
of accuracy and precision. We 
distinguish between quantitative 
and qualitative tolerance limits. 
Quantitative tolerance limits 
Quantitative tolerance limits are of 
the utmost importance for accuracy. 
The tolerance limit applied for 
annual reports is 1% for errors and 
3% for uncertainties. At an 
underlying level, as a consequence 
of the 'tolerance experiment', these 
tolerance limits (the reporting 
tolerances) for 2007 to 2010 have 
been set (more broadly) as follows. 
On the whole, the regularity 
requirements have not diminished. 
a. For the commitments and the 
amount of expenditure and receipts 
per budget article: 
For the small size category of up to 
€150 million: 10%, with all errors 
and uncertainties  
aggregated; 
For the medium size category 
between €150 million and €500 
million: €15 million, with all errors 
and uncertainties  
aggregated; 
For the size category greater than 
€500 million: 3%, with all errors and 
uncertainties  
aggregated; 
b. For total commitments and total 
expenditure, total receipts and total 

YES. There is a 
periodic 
consultation 
between the 
directors of EU 
payment agencies 
within the 
Member States. 
The Netherlands 
has also joined 
the European 
Commission's 
'Smart Regulation' 
initiative, which 
prepares shared 
proposals for the 
simplification of 
the execution of 
rural 
programmes.  

NO.  (a) eligibility rules at the EU 
level were not specific enough 
for the needs of the 
programmes? (b) eligibility rules 
at the EU level could not be 
properly understood by the 
beneficiaries?  
But there are additional 
arrangements at national level 
(see the reasons for this below). 
The eligibility rules are drawn up 
at a high level and therefore 
often open to a large number of 
interpretations. These eligibility 
rules are given shape by national 
eligibility rules covering for 
example, the eligibility of wage 
costs, costs for own labour and 
the detail required for the 
financial justification of eligible 
costs by beneficiaries. In this 
respect, more harmonised, 
uniform and unambiguous rules 
would be desirable. 

YES. The Dutch Court of 
Audit has been using the 
payment summary for 
several years for its EU 
Trend Report activities; 
an annual summary of 
developments in the 
financial management of 
EU funds. The summary 
constitutes a benchmark 
for the Dutch Court of 
Audit to determine the 
trends in EU funds 
actually received. 
Furthermore, it is used 
as the basis for 
investigations into the 
final beneficiaries of EU 
funds, examining the 
extent to which it can be 
seen who receives funds 
for which activities and 
whether this meets the 
European Commission's 
recommendations in 
terms of transparency. 
In the 2011 EU Trend 
Report, the Dutch Court 
of Audit will for the first 
time also look at the 
content of a number of 
concrete projects. 

YES. (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  
(f) any other 
reasons: 
The ECA Report 
covers 2009. This 
will usually be the 
first year in which 
implementation of 
the operational 
programmes has 
actually started, 
which meant in 
some cases that 
systems still had to 
be regulated. This 
has been improved 
in the meantime 
and is now 
compliant with EU 
standards. 

YES  a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected? 
NO  c) increased control 
supervision by the 
Commission on the 
follow-up of audit findings 
by the national/regional 
authorities? 
(d) any other suggestion: 
Clearer guidelines would 
help, but in this area it 
would also be useful to 
have clearer rules. On 
the other hand, here too 
the stability and 
continuity of mechanisms 
(and rules on how to 
apply these 
mechanisms) enable the 
Member States to get 
used to how the system 
works, with fewer errors 
as a welcome result. In 
brief, it is important to 
simplify existing rules, 
whilst not losing sight of 
the stability and 
continuity of 
mechanisms. 

YES.  (c) Should 
clearer guidelines be 
provided to Member 
States by the 
Commission?  
NO. (a) more training 
for national/regional 
authority staff by the 
Commission? (b) 
Should training include 
national/regional 
authority staff and 
beneficiaries? 
No answer provided   
(d) Should more 
guidelines be provided 
to Member States by 
the Commission?(e) 
any other suggestions:
It is very important that 
legislation be clear and 
precise for it to be 
executed correctly. The 
desired clarity should 
also apply when 
establishing 
harmonised, 
unambiguous and 
uniform EU rules for all 
Member States (unity 
of terms and notions 
used, see also reply 
3c). 
Unambiguous 
harmonised subsidy 
rules forestall 
unnecessary national 
interpretations. One 
important measure to 
take is to clarify and 
simplify the completion 
of tenders under the 
thresholds set by the 
EU, for example by 
raising these 
thresholds. 

EN 

86 

EN 

 
  
 
income received  
by the departmental agencies from 
third parties in the statement of 
accounts and the  
aggregate statement of accounts of 
the departmental agencies: 
For the small size category of up to 
€150 million: 10% for errors and 
10% for uncertainties; 
For the medium size category 
between €150 million and €500 
million: €15 million for errors  
and €15 million for uncertainties; 
For the large size category between 
€500 million and €1 500 million: 
€15 million for errors  
and 3% for uncertainties; 
For the very large size category 
greater than €1 500 million: 1% for 
errors and 3% for  
uncertainties. 
c. For ledger balance totals: 
For the small size category of up to 
€150 million: 10% for errors and 
10% for uncertainties; 
For the medium size category 
between €150 million and €500 
million: €15 million for errors  
and €15 million for uncertainties; 
For the large size category between 
€500 million and €1 500 million: 
€15 million for errors  
and 3% for uncertainties; 
For the very large size category 
greater than €1 500 million: 1% for 
errors and 3% for  
uncertainties; 
d. For the total receipts of 
departmental agencies: 
For the small size category of up to 
€150 million: 10% for errors and 
10% for uncertainties; 
For the medium size category 
between €150 million and €500 
million: €15 million for errors  
and €15 million for uncertainties; 
For the large size category between 
€500 million and €1 500 million: 
€15 million for errors  
and 3% for uncertainties; 
For the very large size category 
greater than €1 500 million: 1% for 

EN 

87 

EN 

 
  
errors and 3% for  
uncertainties; 
Qualitative tolerance limits 
In addition to the quantitative 
tolerance limits we also apply 
qualitative ones. Findings can be  
reported if qualitative tolerance 
limits are exceeded even where the 
quantitative ones are  
not. 
For example, qualitative tolerance 
limits are exceeded in the following 
cases: 
Errors or uncertainties where 
Ministers or the Senior Civil Service 
are involved; 
A Minister did not fulfil an 
undertaking to the States General 
or the Dutch Court of Audit; 
A deliberate error; 
Amounts unduly withheld from the 
budgetary administration or 
statement of accounts. 
Parts of the annual report not 
drawn up in compliance with the 
reporting requirements. 

EN 

88 

EN 

 
  
 
 
YES (a) more 
precise eligibility 
rules at EU and 
national level  (d) 
additional staff 
resources at 
national level 
NO (b) less rigid 
eligibility rules at 
EU and national 
level (c) more 
guidance to 
beneficiaries e) 
revised internal 
guidelines for 
managing 
verifications  

YES  a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected? 
NO  c) increased control 
supervision by the 
Commission on the 
follow-up of audit findings 
by the national/regional 
authorities? 

Poland 

The concept of a 
single audit model 
concerns the internal 
audit of EU funds. As 
the highest state audit 
body in Poland, i.e. 
internal audit, the 
Supreme Chamber of 
Control is not a part 
of this system and as 
such the single audit 
model concept does 
not incorporate the 
Supreme Chamber's 
activities. While 
agreeing in principle 
that the internal audit 
system for EU funds 
needs to operate 
more effectively, the 
Supreme Chamber of 
Control points out that 
an audit model based 
on the findings of 
other auditors should 
take account of the 
need to carry out 
periodic checks on 
the quality of their 
work. 
Opinion No 2/2004 of 
the Court of Auditors 
on the single audit 
model indicates that 
this concept concerns 
internal audits. The 
Supreme Chamber of 
Control is the highest 
state audit body and 
performs external 
audits; as such, it 
does not form part of 
the internal audit 
system. The Supreme 
Chamber of Control's 
operating rules are 
based on national 

No answer 
provided 

When carrying out 
checks on state 
budget 
implementation, all 
departments apply a 
1.5% materiality 
threshold for the 
purpose of auditing 
the accounts. 

NO 

YES. During internal 
discussions in individual 
audit departments and 
Supreme Chamber of 
Control offices (referred 
to below as NIK 
departments), the 
following comments 
were made: 
1. Some NIK 
departments take the 
view that lists of EU 
payments can be used 
to prepare checks on 
state budget 
implementation, e.g. for 
risk analysis and the 
selection of the themes 
or subjects of checks. 
2. The deadline by 
which the Commission 
has to forward the list 
creates difficulties, e.g. 
the last list arrived on 5 
August. In view of the 
holiday period and the 
need to translate the 
explanatory 
memorandum into 
Polish, this means in 
practice that the NIK 
departments received 
the list in the second half 
of August. Proposals for 
themes for the 2011 
audit plan were made 
beforehand.  

The public 
procurement rules 
(both at Community 
and – consequently – 
national level) require 
the bodies awarding 
contracts to apply 
excessively 
complicated 
procedures which often 
require specialist 
knowledge. Such a 
complicated system 
appears to entail a 
significant number of 
purely formal errors 
which do not 
fundamentally 
determine whether the 
right contractor or 
supplier is selected. 
However, these errors 
are detected by the 
bodies which check the 
correct implementation 
of public procurement 
procedures and, 
consequently, are 
reflected in the number 
of errors detected in 
the course of 
implementing cohesion 
policy.  

YES  
The reasons why stricter 
eligibility rules for expenditure 
were introduced were as follows:
- the need to adapt general 
provisions of Community law to 
the specific characteristics of the 
Operating Programme (in view of 
the generic nature of Community 
provisions in most cases they 
could not be applied directly to 
individual OP activities. It was 
therefore necessary to make 
them more specific so that they 
were not misinterpreted by the 
beneficiary. Because of the 
specific nature of individual 
actions, the Managing 
Authorities did not always allow 
all the options provided for by 
Community law in individual 
areas to be taken up. 
- the need to comply with the 
state aid rules; 
- the need to implement the 
instructions given by the EC after 
each audit (as regards 
compliance with the rules of 
sound financial management, 
public procurement and flat rate 
payments, in particular of 
overheads). 
The rules governing eligibility of 
expenditure were incorporated 
into horizontal and programme 
guidelines drawn up at national 
level. Beneficiaries implementing 
projects co financed with EU 
funds are required to comply with 
these guidelines. 
(a) eligibility rules at the EU level 
were not specific enough for the 
needs of the programmes?  
(b) eligibility rules at the EU level 
could not be properly understood 
by the beneficiaries?  

EN 

89 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
law, International 
Standards of SAIs 
and the Chamber's 
own auditing 
standards. 
In the view of the 
Supreme Chamber of 
Control,taking 
account of the 
following rules based 
on these  
standards: 
• As the external 
auditor, the SAI has 
the task of examining 
the effectiveness of 
internal audit.  
If internal audit is 
judged to be effective, 
efforts shall be made, 
without prejudice to 
the right of  
the SAI to carry out 
an overall audit, to 
achieve the most 
appropriate division 
or assignment of  
tasks and cooperation 
between the SAI and 
internal audit. (Lima 
Declaration of 
Guidelines on  
Auditing Precepts, 
ISSAI 1, part 3, point 
3) 
• When the SAI uses 
the work of another 
auditor(s), it must 
apply adequate 
procedures to provide 
assurance that the 
other auditor(s) has 
exercised due care 
and complied with 
relevant auditing 
standards,  
and may review the 
work of the other 
auditor(s) to satisfy 
itself as to the quality 
of that work. 
(INTOSAI,  

3. If the list of EU 
payments in Poland 
were to be transmitted 
before end March each 
year it would facilitate 
diversification of the 
information obtained in 
the course of checks on 
state budget 
implementation (e.g. it 
would make it possible 
to compare data on 
payment applications 
with the information 
provided by the 
Commission). Checks 
on state budget 
implementation are 
carried out by the 
Supreme Chamber of 
Control from January to 
May each year. At 
present these lists are 
accessible just after the 
checks have been 
completed. 
4. The lists concern 
relations between the 
Managing Authority and 
the Commission, but the 
Supreme Chamber's 
checks tend to focus on 
relations and flows of 
funds between the 
Managing Authority and 
the beneficiary. 
5. The payments 
indicated on these lists 
are presented 
collectively, whereas the 
Supreme Chamber's 
checks often concern 
payments associated 
with selected activities 
(e.g. under regional 
operating programmes). 
The information 
contained in these lists 
concerning the 
provincial level is not 
entirely comprehensible.
6. The Supreme 

Therefore measures 
should be taken to 
amend the criteria 
adopted by audit 
institutions for 
assessing cases so 
that formal errors are 
not treated as 
irregularities (i.e. 
reducing the list of 
public procurement 
irregularities) and to 
amend legislation with 
a view to streamlining 

the formalities 
implemented by bodies 
required to carry out 
public procurement 
procedures. 
The redefinition of the 
current audit approach 
(which involves 
checking whether 
transactions are correct 
in formal terms) should 
help to ensure that the 
emphasis is shifted to 
checking whether 
objectives have been 
achieved (performance 
audit), which would 
appear to be more 
important from the 
cohesion policy 
viewpoint. 
YES (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? 
NO (d) Should more 
guidelines be provided 
to Member States by 
the Commission? 

EN 

90 

EN 

 
  
Chamber is interested in 
receiving information 
from the Commission 
that the national 
payment application 
contained expenditure 
that was disputed by the 
European Commission 
and was not refunded 
within the framework of 
the payment made to 
Poland. 

ISSAI 200 auditing 
standards, point 2.45)
• The Supreme 
Chamber of Control 
issues its audit 
reports in its own 
name and on its own 
liability. If a  
Supreme Chamber of 
Control auditor uses 
the work of another 
auditor, he must 
ensure that the work 
provides  
fair, relevant and 
rational evidence 
which meets the 
Chamber's 
requirements. 
(Supreme Chamber 
of Control  
auditing standards, 
standard 13.1) 
and the requirements 
of the International 
Standard on Auditing 
(ISA 600 Using the 
work of another 
auditor,  
MSRF 610 Using the 
work of internal 
auditors and  ISA 330 
The Auditor's 
Responses to 
Assessed Risks,  
paragraph 41), 
it should be 
concluded that: 
1) any findings 
concerning an audit 
model for EU funds 
should not restrict the 
remit and obligations 
of  
supreme audit 
institutions under 
national law and 
international 
standards or the 
freedom of supreme 
audit  
institutions to 

EN 

91 

EN 

 
  
determine the scope 
of the audit work 
carried out as part of 
their remit; 
2) the single audit 
model concept should 
be interpreted as 
referring purely to 
internal audit systems 
(in most cases,  
Supreme Audit 
Institutions, including 
the Supreme 
Chamber of Control, 
do not forom part of 
these systems); 
3) this model should 
involve: 
a. the application of 
common internal 
control and audit 
standards to EU 
funds; 
b. appropriate 
coordination of the 
operation of internal 
control and audit 
structures; 
organisation of 
periodic checks on 
the effectiveness of 
control mechanisms 
and verification of the 
quality of audit work  
carried out by other 
auditors whose 
findings are to be 
used, applying 
appropriate control 
sample methods. 

Portugal 

NO 

Not applicable 

Not 
applicable 

Not applicable 

NO. Relevant 
measures are 
under way, but 
will have an 
impact only in 
2011. 

YES (a) eligibility rules at the EU 
level were not specific enough 
for the needs of the 
programmes?  

EN 

92 

YES. e) revised 
internal guidelines 
for managing 
verifications 
NO.  (d) additional 
staff resources at 
national level 

YES. (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) 

YES. a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected? 

EN 

 
  
Romania 

YES  

The Audit Authority 
of the Romanian 
Court of Auditors 
uses a materiality 
threshold of 2% in 
operational audits 
and clearance of 
accounts.   

NO   

YES  

No answer 
provided 

YES (a) eligibility rules at the EU 
level were not specific enough 
for the needs of the 
programmes? (ACIS + ACP) (b) 
eligibility rules at the EU level 
could not be properly understood 
by the beneficiaries? (ACIS) 

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

YES  (a) more training 
for national/regional 
authority staff by the 
Commission? (b) 
Should training include 
national/regional 
authority staff and 
beneficiaries? (ACIS + 
ACP) (c) Should 
clearer guidelines be 
provided to Member 
States by the 
Commission? (ACP) 
(d) Should more 
guidelines be provided 
to Member States by 
the Commission? 
(ACIS) 

YES (a) more 
precise eligibility 
rules at EU and 
national level  (c) 
more guidance to 
beneficiaries e) 
revised internal 
guidelines for 
managing 
verifications (ACP) 
(d) additional staff 
resources at 
national level (ACIS 
+ ACP) 
NO (b) less rigid 
eligibility rules at 
EU and national 
level (ACP) 

YES a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (ACIS 
+ACP+APIA*APDRP) (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected? 
(ACP*APDRP) 
NO c) increased control 
supervision by the 
Commission on the 
follow-up of audit findings 
by the national/regional 
authorities? (ACP) 

EN 

93 

EN 

 
  
NO. There 
are no 
variations. 

YES. These reports on 
payments are 
considered and taken 
into account in the 
preparation of every 
control. 

The eligibility conditions 
established by EU legislation 
were not made stricter at 
national level.  
The expenditure eligibility 
conditions are made stricter by 
individual managing authorities 
(e.g. restriction of eligibility of 
unavoidable expenditure arising 
in connection with the 
preparation of a project, i.e. 
project documentation and public 
procurement procedure 
expenses, etc.). 
YES. (b) eligibility rules at the EU 
level could not be properly 
understood by the beneficiaries?
NO. (a) eligibility rules at the EU 
level were not specific enough 
for the needs of the 
programmes? 

YES. In calls for 
2009 the Ministry 
of Agriculture 
(now the Ministry 
of Agriculture and 
Rural 
Development) 
used a two-stage 
procedure for 
submission of 
claims for non-
returnable 
financial 
assistance 
(building 
permission and 
documents 
related to public 
procurement were 
submitted after 
approval of the 
claim in the 
second stage of 
the call).        

YES.  (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? 
NO. (d) Should more 
guidelines be provided 
to Member States by 
the Commission?  

YES.  (a) more 
precise eligibility 
rules at EU and 
national level (c) 
more guidance to 
beneficiaries (d) 
additional staff 
resources at 
national level 
NO. (b) less rigid 
eligibility rules at 
EU and national 
level e) revised 
internal guidelines 
for managing 
verifications 

YES  a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected? 
NO  c) increased control 
supervision by the 
Commission on the 
follow-up of audit findings 
by the national/regional 
authorities? 

Slovakia 

YES. The NKÚ 
supports a system in 
which checks are 
carried out, recorded 
and reported 
according to a 
common standard. 
This standard should 
ensure that all 
participants consider 
it to be reliable, thus 
eliminating duplicate 
(and ineffective) 
checks. 

The NKÚ has issued 
a binding regulation, 
‘Control Activity 
Rules’, under which 
have been issued a 
‘Methodological 
Guideline for 
Financial Control’ 
and a 
‘Methodological 
Guideline for the 
Application of 
Standards’. Under 
the Methodological 
Guideline for 
Financial Control, the 
materiality value 
expresses the 
threshold of tolerable 
error.  For the public 
sector the materiality 
value is set between 
5 % and 2 % of the 
value that adequately 
reflects the degree of 
financial activity. 
For commercial 
organisations it is 
from 5 to 10 % of net 
profit before tax; 0.5 
% to 5 % of gross 
profit; 0.5 % to 1 % 
of total assets; 0.5 % 
to 5 % of equity; 0.5 
% to 1 % of earnings; 
weighted average of 
the preceding points; 
0.5 % to 2 % of 
expenditure (costs); 
the lower value of the 
range is applied in 
sensitive parts of 
accounts. 
For non-profit 
organisations, 0.5 % 
to 2 % of expenditure 
(costs). 

EN 

94 

EN 

 
  
Slovenia 

The materiality 
threshold is between 
0.5% and 2%. 

YES  

YES. The 
materiality 
threshold 
depends 
on the 
amount of 
audit 
resources, 
i.e. if these 
resources 
are very 
limited, the 
materiality 
threshold 
is higher 
(up to 2%). 

NO. The single audit 
model  is not 
practicable for the 
Court of Audit of the 
Republic of Slovenia 
in view of its powers 
concerning planning, 
implementation and 
reporting methods. 
If the Court of Audit 
were to start 
implementing the 
single audit model, 
this would 
considerably increase 
its workload and thus 
raise the question of 
where to find the 
resources for this 
increase. 

YES (a) eligibility rules at the EU 
level were not specific enough 
for the needs of the 
programmes? 
NO (b) eligibility rules at the EU 
level could not be properly 
understood by the beneficiaries?  

YES (a) more training 
for national/regional 
authority staff by the 
Commission? (d) 
Should more guidelines 
be provided to Member 
States by the 
Commission? NO (b) 
Should training include 
national/regional 
authority staff and 
beneficiaries? (c) 
Should clearer 
guidelines be provided 
to Member States by 
the Commission?  

YES  a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected? 
NO  c) increased control 
supervision by the 
Commission on the 
follow-up of audit findings 
by the national/regional 
authorities? 

YES (c) more 
guidance to 
beneficiaries 
NO (a) more 
precise eligibility 
rules at EU and 
national level (b) 
less rigid eligibility 
rules at EU and 
national level (d) 
additional staff 
resources at 
national level e) 
revised internal 
guidelines for 
managing 
verifications  (f) any 
other reasons: 
Additional training 
on the part of the 
EU for managing 
authority staff. 

YES. 
Implementation of 
the rural 
development 
measures under 
Axis 2 is covered 
by the 
complicated 
reporting system 
in Article 34 of 
Regulation No 
1975/2006. 
We consider that 
this reporting 
system is not 
always adapted to 
the system 
implemented in 
the Member 
States and, with a 
single application 
for IACS schemes 
(EAGF and 
EAFRD), the 
individual data 
relating to the 
control findings 
can be interpreted 
differently.  
In 2010 Slovenia 
upgraded the 
system of action 
following analysis 
of the data from 
Article 34 of 
Regulation No 
1975/2006. In line 
with the changes 

EN 

95 

EN 

 
  
in the Ministry's 
instructions for 
the 
implementation of 
RDP 2007-2013 
in Slovenia in 
2010, the paying 
agency must send 
an annual 
analysis of control 
findings (i.e. a 
report on 
infringements 
discovered during 
the control) to the 
Managing 
Authority. After 
analysis of the 
control findings 
the main 
beneficiaries of 
the measures 
acquaint the 
Managing 
Authority with the 
findings that may 
throw light on the 
problem and 
suggest solutions. 
The Managing 
Authority adopts 
appropriate 
measures to 
resolve the 
problems.In 2010 
Slovenia joined in 
the upgrading of 
the (over-strict) 
system of 
infringements and 
sanctions, with 
the result that 
possible 
infringements are 
defined more 
clearly, while 
sanctions are 
more effective, 
dissuasive and in 
proportion to the 
gravity of the 
infringements. In 

96 

EN 

EN 

 
  
this way the 
system of 
infringements and 
sanctions has 
become clearer 
and more 
comprehensible, 
especially for 
beneficiaries. 
It is expected that 
Slovenia will star 
to use this system 
of infringements 
and sanctions in 
2011.  
Slovenia is 
actively 
cooperating with 
the team of 
experts appointed 
by the 
Commission to 
prepare the basis 
for the 
simplification of 
legislation in the 
CAP sector (RDP 
2007-2013). In 
our statements of 
position we  
draw attention to 
the importance of 
the stability ofthe 
system since any 
major change will 
involve additional 
costs relating to 
the upgrading of 
the software 
application and 
farmer training.  
However,there is 
definitely a need 
for the 
simplification of 
cross compliance 
controls, in 
particular  
in the case of the 
sanctioning 
system 
(especially for 

97 

EN 

EN 

 
  
livestock). The 
implementation of 
cross  
compliance 
controls 
represents an 
administrative 
burden for 
Member States, in 
particular 
because the 
control findings in 
other fields are 
not taken into 
account(certified 
schemes  
DG Sanco – 
identification and 
registration of 
livestock and 
animal-welfare 
standards)  
when determining 
whether the 
conditions for 
CAP payments 
have been met.  
When  
making concrete 
proposals for the 
simplification of 
eligibility criteria, 
we are tied to the 
expected changes 
to the CAP after 
2013, as the 
assessment of the 
effects on CAP 
after  2013 will 
also contain an 
analysis of 
possible 
simplifications. 
The outcome of 
the 
discussions and 
proposals will only 
be seen in the 
legislative 
package in the 
second half of 
2011.   

98 

EN 

EN 

 
  
Each Supreme Audit Authority 
applies the criteria it considers 
appropriate to be able to conclude 
the reliability of the accounts and 
the legality and regularity of the 
underlying transactions. 
Rather than establishing set relative 
materiality thresholds for all audits, 
the Spanish Court of Auditors 
establishes the criteria considered 
appropriate for each audit that is 
undertaken, and combines these, 
where appropriate, with other 
quantitative and qualitative criteria 
which, in the Institution’s opinion, 
enable greater precision to be 
obtained when deciding on these 
points. 

YES. When undertaking 
its audits, the Spanish 
Court of Auditors may 
use the results of the 
audits conducted by 
other internal or external 
audit bodies, depending 
on the area in which its 
activity is implemented. 
Consequently, any 
information you have in 
this regard is always 
useful to our Institution. 

YES. The Spanish 
Court of Auditors 
recognises the 
importance of 
maintaining reliable 
and effective internal 
control systems that 
ensure good 
management and that 
provide accurate and 
sufficient information 
on transactions 
conducted and 
financial accounts. In 
fact, the first step in 
any auditing by the 
Court of Auditors 
consists of examining 
and evaluating the 
internal control 
system established 
by the body being 
audited, and of 
analysing whether 
this is functioning as 
intended in practice, 
whether it has done 
so throughout the 
whole period under 
inspection and for 
how many 
transactions it was 
designed. The scope, 
nature and 
procedures of the 
audit to be applied by 
the Court of Auditors 
are specifically 
determined as a 
function of the 
reliability provided by 
the internal control 
system, the 
substantive checks 
being intensified and 
increased in those 
areas or sections in 
which the internal 
control shows greater 
weaknesses. 
With regard, in 
particular, to the 

Spain 

EN 

YES. (a) eligibility rules at the EU 
level were not specific enough 
for the needs of the 
programmes? (b) eligibility rules 
at the EU level could not be 
properly understood by the 
beneficiaries?  

YES. (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?  
(e) any other 
suggestions   
The need to apply 
national legislation to 
contracts with a value 
below the threshold 
given in Community 
rules is not always 
shared by the 
Commission. In 
numerous cases, the 
Commission applies 
the Directives to 
contracts that are 
below the established 
threshold, justifying this 
with additional 
calculations 
(supplementary 
contracts) or with the 
application of 
Interpretative Notice 
2006/C179/02. In these 
cases, it would be 
useful to establish clear 
criteria with regard to 
the scope of 
application. 
On the transposition of 
Community rules into 
national legislation, 
some cases, such as 
that of contract 
amendments, are 
handled by the 
Commission with strict 

YES. Application 
of the European 
rural development 
policy (Pillar 2 of 
the CAP) in Spain 
is regionalised, in 
accordance with 
Article 15 of 
Regulation 
1698/2005. The 
General 
Directorate for the 
Sustainable 
Development of 
the Rural 
Environment, of 
the Ministry of 
Environment and 
Rural and Marine 
Environments, is 
the coordinating 
body of the 
Managing 
Authorities for the 
Regional Rural 
Development 
Programmes in 
Spain, as 
established by 
Royal Decree 
1113/2007 which, 
among other 
things, ensures 
the harmonised 
application of 
Community 
regulations on 
rural 
development. 
Moreover, in 
application of said 
Article 15 of 
Regulation 
1698/2005, there 
is a National 
Framework (NF) 
for Rural 
Development that 
contains a series 
of cross-cutting 
actions for all 
regional 

99 

YES. (a) more 
precise 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 
NO. (b) less rigid 
eligibility rules at 
EU and national 
level 

YES. a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected? 
NO. c) increased control 
supervision by the 
Commission on the 
follow-up of audit findings 
by the national/regional 
authorities? 

EN 

 
  
single audit model, it 
must be noted that 
this is a system 
established by the 
European 
Commission and that 
it affects only the 
internal auditing of 
Community funds, the 
evaluation  
of which is the 
responsibility of the 
Commission, as the 
body responsible for 
Community budget  
management. The 
European Court of 
Auditors is the 
institution to which 
the Treaty on the 
Functioning of the  
European Union 
allocates external 
auditing of the 
Community budget 
and the issuing of a 
declaration of  
reliability of accounts 
and of the legality and 
regularity of the 
underlying 
transactions. It is thus 
these  
Community 
institutions that are 
responsible for, and 
able to examine and 
pronounce on, the 
effectiveness  
of the single audit 
model and how it 
operates in practice, 
both as a formula that 
enables better 
management  
of Community funds 
and as an instrument 
that provides more 
reliable results at 
other levels of control.
The Supreme Audit 
Authorities (SAIs) of 

EN 

reference to 
Community 
regulations, with said 
cases now in claims 
proceedings before the 
Court of Justice and 
awaiting final 
judgments. A 
temporary procedure to 
ease the corrective  
actions would be 
advisable while the 
dispute lasts, and this 
would significantly 
reduce the  
rate of errors. 

programmes. 
Thus, within the 
NF, and insofar 
as this relates to 
axis 2 on 
improving the 
environment and 
land 
management, 
there are cross-
cutting measures 
related to agri-
environmental 
measures and 
desertification 
mitigation, 
prevention of 
forest fires and 
aid to the forest 
environment and 
non-productive 
investments in the 
Natura 2000 
Network in the 
forest 
environment.  
Moreover, regular 
coordination 
meetings are held 
with the managing 
authorities for the 
rural  
development 
programmes and 
work is being 
conducted to 
adapt the rural 
development  
indicators 
envisaged in the 
regulations, to 
clarify some of the 
actions initially set 
and to  
include others, 
etc., all with the 
aim of seeking 
homogeneity in 
the application of 
European  
rural development 
programming. 

100 

EN 

 
  
the Member States, 
as national external 
audit bodies, are not  
integrated into and do 
not form a part of this 
single audit system 
established with 
respect to Community 
funds, regardless of 
the fact that they may 
assess, as has been 
noted, the internal 
control systems  
established. The SAIs 
are independent 
bodies, subject only 
to the national code 
and mandate with 
regard  
to their organisation, 
functioning and 
exercise of their 
action, applying their 
own procedures and 
provisions  
in the implementation 
of their task of 
auditing the public 
funds managed by 
the national 
authorities, whether  
they are of directly 
national or 
Community origin. 

Sweden 

No answer provided 

No answer provided 

No answer 
provided 

No answer provided 

EN 

Royal Decree 
1852/2009 on the 
eligibility of 
EAFRD 
expenditure has 
been published in 
application of 
Article 71.3 of 
Regulation 
1698/2005. 
In addition, the 
General 
Directorate 
participates in 
meetings or fora 
at European level 
related to 
simplifying the 
CAP. 

YES. Simplifying 
the common 
agriculture policy, 
including rural 
development 
measures, is a 
high-priority issue 
for Sweden. 
Unfortunately, a 
single Member 
State cannot on 
its own take 
decisions which 
would radically 
simplify aid 
measures under 
the rural 
development 

101 

YES. Sweden has more stringent 
national provisions on 
procurement.  
(b) eligibility rules at the EU level 
could not be properly understood 
by the beneficiaries? - 
Beneficiaries in Sweden are 
generally unfamiliar with the level 
of detail required under EU rules. 

YES. (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? 
 (e) any other 
suggestions     

YES. (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  
NO. (a) more 
precise eligibility 
rules at EU and 
national level  

We favour not more 
specific guidelines, but 
guidelines that better 
clarify EU objectives, 
thereby ensuring they 
are interpreted 
consistently in all the 
Member States. 
We would propose that 
managing and audit 
bodies should receive 
the same kind of training 
, so as to achieve a 
consensus on the areas 
that are to be checked 
and how this is to be 
done. 
YES  a) more training by 

EN 

 
  
programme. 
Sweden has 
therefore put 
forward a number 
of proposals for 
simplification in 
different contexts, 
e.g. at meetings 
between Member 
States and in the 
context of 
discussions with 
the European 
Commission. 
Proposals put 
forward by 
Sweden for 
changes in EU 
rules within DG 
AGRI's remit 
include standard 
costs for aid to 
undertakings and 
projects, precision 
in statements of 
acreage, a review 
of demands for 
more frequent 
checks, raising 
the tolerance 
threshold as 
regards error 
frequency in the 
rural development 
programme, 
abolition of the 
five-year 
programming 
period and 
penalties for 
unintentional 
reporting errors. 

NO    

102 

It is essential that the 
same training be 
provided for both 
managing authorities 
and audit authorities, to 
maximise common 
understanding in this 
area. 

the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected? 
NO  c) increased control 
supervision by the 
Commission on the 
follow-up of audit findings 
by the national/regional 
authorities? 

YES. Scotland, Department for 
Communities and Local 
Government (DCLG) (a) 
eligibility rules at the EU level 
were not specific enough for the 
needs of the programmes? 
NO Wales: National rules are not 
stricter but are provided to give 
greater clarity and certainty to 
beneficiaries 

DCLG: In general 
terms we would value 
training re procurement 
and clearer guidelines, 
but not more 
guidelines.  Precise 
eligibility rules and 
internal guidelines 
make for managing 
authorities’ 

YES (b) less rigid 
eligibility rules at 
EU and national 
level  
NO (a) more 
precise eligibility 
rules at EU and 
national level 
(c) more guidance 
to beneficiaries 

YES  a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected (b) 
clearer guidelines from 
the Commission for 
national/regional 
authorities on control 

EN 

UK 
Scotland (S) 
Wales (W) 
Northern 
Ireland 
Her 
Majesty’s 
Revenue 
Customs 

YES. The UK 
National Audit Office 
(NAO) agrees with 
the principle that the 
external auditor 
should consider and if 
appropriate rely on 
the controls 
developed by the 
audited body to 

The NAO's planning 
materiality levels are 
set to consider the 
needs of the users of 
the financial 
statements which 
include, but are not 
limited to, the 
addressees of the 
audit opinion as well 

 YES. 
Scotland: 
It makes 
sense to 
minimise 
the 
disruption 
as much 
as 
possible 

YES The reports were 
one of a range of 
sources of evidence 
considered by the NAO 
during its audit planning 

EN 

 
  
but still be 
able to 
deliver an 
extensive 
audit 
service to 
clients           

(HMRC) 
Rural 
Payment 
Authority 
(RPA) 
Department 
for Business, 
Innovation 
and Skills 
(BIS) 
Department 
for 
Communities 
and Local 
Government 
(CLG) 
Department 
for 
International 
Development 
(DfID) 

ensure the legality 
and regularity of the 
use of EU funds.  The 
NAO seeks to rely on 
these controls where 
it can, based on 
International 
Standards on 
Auditing (particularly 
the ISA 600 series) 
and by applying these 
directly or by analogy 
to both the measures 
and legality and 
regularity of 
transactions.  
However, it feels that 
the current ‘single 
audit model’ that the 
Commission refers to 
does not take full 
consideration of the 
need of the public 
sector auditor to 
reach an independent 
judgement. 

as taxpayers more 
widely.  The NAO's 
auditors will consider 
some transactions as 
material by nature or 
context.  For 
planning purposes 
materiality is 
generally set within 
the range from 0.5% 
to 1% of gross 
expenditure, with 
materiality tending 
towards 0.5% for the 
larger accounts.  
This applies equally 
to true and fair and 
legality and regularity 
opinions.  It is the 
NAO's view that it 
would not be 
appropriate to set 
materiality at a 
higher level. 

issues and correction of 
errors detected? 
(Scotland) 
NO a) more training by 
the Commission for 
national/regional 
authorities on control 
issues and correction of 
errors detected  (DCLG 
is currently working with 
the Commission, Audit 
and Certifying Authorities 
to ensure management 
verifications are carried 
out sufficiently) 
 c) increased control 
supervision by the 
Commission on the 
follow-up of audit findings 
by the national/regional 
authorities? 

(DCLG - There is 
the EPP User 
Manual which 
covers about twenty 
areas, plus 
guidance which 
RDAs provide for 
beneficiaries) 
(d) additional staff 
resources at 
national level 
(Given the current 
transition exercise, 
it is not currently 
appropriate to give 
an opinion about 
staffing) 
e) revised internal 
guidelines for 
managing 
verifications (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.) 

effectiveness re 
verifications, and we 
encourage this to avoid 
time spent seeking 
legal advice.  In terms 
of whether we need 
revised guidelines for 
managing verifications, 
the move to new 
delivery bodies 
provides an opportunity 
for fine tuning.  Re 
applying corrective 
mechanisms, their 
suggestions are fine.  
However, there is a risk 
re cross over with 
OLAF functions, 
particularly if the 
Commission increases 
its supervision re follow 
up. 
NO (a) more training 
for national/regional 
authority staff by the 
Commission? (Lessons 
have already been 
learnt. There has been 
a procurement 
workshop and Chapter 
17 of the EPP. User 
Manual is about 
procurement.  Regional 
Development 
Authorities (RDAs) also 
run their own 
workshops about 
procurement with 
beneficiaries.  Finally, 
there are links between 
RDAs and Government 
Offices from previous 
rounds to enable 
lessons learnt to be 
passed on) 
(b) Should training 
include 
national/regional 
authority staff and 
beneficiaries? 
(c) Should clearer 
guidelines be provided 

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to Member States by 
the Commission? 
(clearer guidelines 
should mitigate need 
for increased 
supervision) (d) Should 
more guidelines be 
provided to Member 
States by the 
Commission? 
(Scotland, BIS - The 
procurement rules are 
too complex. Despite 
claiming there is a 
threshold below which 
they do not apply, if EU 
funding is a part of any 
project, regardless of 
size, the rules should 
apply. 
DCLG: Regional leads 
have been meeting 
regularly to consider 
and 
produce revised and 
updated guidelines) 

EN 

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EN