COMMISSION STAFF WORKING PAPER
Date: 2011-11-14
Institutions: European Commission
Subjects: budgetary discharge, financial year, general budget (EU), management audit, resolution of parliament

EUROPEAN COMMISSION 

Brussels, 14.11.2011 
SEC(2011) 1351 final 

COMMISSION STAFF WORKING PAPER 

Accompanying the document 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT and 
THE COUNCIL  

on the follow-up to 2009 discharge – Replies to requests from the European Parliament

{COM(2011) 736 final} 
{SEC(2011) 1350 final} 

 
 
  
  
 
TABLE OF CONTENTS 

INTRODUCTION...................................................................................................................... 4 

European Parliament resolutions on 2009 discharge ................................................................. 5 

Accounts ........................................................................................................................... 6 

Legality and regularity...................................................................................................... 7 

Recovery and correction mechanisms ............................................................................ 10 

Member State responsibility and transparency............................................................... 14 

Tolerable risk of errors ................................................................................................... 17 

Commission's Internal Audit Service ............................................................................. 19 

Single audit ..................................................................................................................... 21 

Transparency................................................................................................................... 23 

Evaluations...................................................................................................................... 26 

Whistleblowers ............................................................................................................... 27 

Reforms of the Staff Regulations of Officials of the EU................................................ 28 

Agriculture and natural resources ................................................................................... 29 

Cohesion ......................................................................................................................... 32 

Research, energy and transport....................................................................................... 38 

External aid, Development and Enlargement ................................................................. 42 

Education and Citizenship .............................................................................................. 49 

Economic and Financial Affairs ..................................................................................... 50 

Comprehensive spending review .................................................................................... 53 

Priority actions - general................................................................................................. 54 

Priority action - Reform of the current discharge procedure .......................................... 55 

Priority action - National management declarations....................................................... 56 

Priority action - Completion of the Commission's governance structure ....................... 58 

Priority action - Systematic activation of interruption and suspension of payments as 

well as lifting of the measure............................................................................ 59 

Priority action - Improvement of corrective mechanisms .............................................. 61 

Priority action - Performance evaluator.......................................................................... 63 

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Priority action - Introduction of a new spending logic ................................................... 64 

Observations from committee on development .............................................................. 65 

Observations from committee on Employment and Social Affairs................................ 68 

Observations from committee on Internal Market and Consumer Protection ................ 70 

Observations from committee on Transport and Tourism.............................................. 72 

Observations from committee on Civil liberties, Justice and Home affairs ................... 74 

Observations from committee on Culture and Education............................................... 75 

Observations from committee on Environment, Public Health and Food Safety........... 76 

Observations from committee on Foreign Affairs.......................................................... 78 

Observations from committee on Regional Development.............................................. 79 

Part I - Special report N° 15/2009 on "EU assistance implemented through United 

Nations organisations: decision-making and monitoring"................................ 82 

Part II - Special report N° 17/2009 on "Vocational training actions for women co-

financed by the European Social Fund" ........................................................... 84 

Part III - Special report N° 1/2010 on "Are simplified customs procedures for imports 

effectively controlled?"..................................................................................... 87 

Part IV - Special report N° 2/2010 on "The effectiveness of the Design Studies and 

Construction of New Infrastructures support schemes under the Sixth 
Framework Programme for Research" ............................................................. 90 

Part V - Special report N° 3/2010 on "Impact Assessments in the EU institutions: do 

they support decision-making?" ....................................................................... 92 

Part VI - Special report N° 4/2010 on "Is the design and management of the mobility 

scheme of the Leonardo da Vinci Programme likely to lead to effective 
results?" ............................................................................................................ 95 

Part VII - Special report N° 5/2010 on "Implementation of the Leader approach for rural 
development" .................................................................................................... 97 

Part VIII - Special report N° 6/2010 on "Has the reform of the sugar market achieved its 
main objectives?".............................................................................................. 99 

Part IX - Special report N° 8/2010 on "Improving transport performance on Trans-

European rail axes: Have EU rail infrastructure investments been effective?"
........................................................................................................................ 101 

Part X - Special report N° 9/2010 on "Is EU Structural Measures spending on the supply 
of water for domestic consumption used to best effect?"............................... 106 

Part XI - Special report N° 10/2010 on "Specific measures for agriculture in favour of 

the outermost regions of the Union and the smaller Aegean islands" ............ 107 

European Development Funds...................................................................................... 109 

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Requests to the Commission concerning the agencies ................................................. 120 

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INTRODUCTION 

This Commission Staff Working Paper completes the Report from the Commission to the 
European Parliament and the Council on the Follow-up to 2009 Discharge. It presents in 
detail the answers to the 213 specific requests made by the European Parliament in its 
Resolutions forming an integral part of its Decisions on the 2009 Discharges.1 

1 

For each specific request a reference is given to the relevant Parliament document: document references 
P7_TA(2011)0194 for the general budget, P7_TA(2011)0195 on the ECA's Special Reports, 
P7_TA(2011)0201 on the EDFs and P7_TA(2011)0163 as regards the agencies. Documents are 
available at the following Web addresses: 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2011-
0194+0+DOC+XML+V0//EN&language=EN#BKMD-87 

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European Parliament resolutions on 2009 discharge 

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Accounts 

1. 

(European Parliament, §3) The EP considers it abnormal for the annual accounts to 
be presented with negative own capital of EUR 44 700 000 000 and wonders whether 
the  amounts  to  be  requested  from  Member  States  should  not  be  entered  as  assets, 
given  that  the  estimated  EUR  37  000  000  000  in  staff  pensions  is  clearly  a 
commitment.  The  EP  notes  the  explanations  provided  by  the  Commission's 
Accounting Officer to the effect that international accounting standards applicable to 
the public  sector  have been  complied with; proposes that consideration be given to 
creating  a  Union  pension  fund  to  externalise  financial  commitments  of  this  kind 
concerning staff 

Commission's response: 

As mentioned previously, the existence of negative net assets is a consequence of 
the application of accrual accounting to an institution that is funded by an annual 
budget.  These  amounts  are  not  receivables  from  the  Member  States  at  the  year-
end.  Furthermore,  under  the  EU  accounting  rules  (and  also  internationally 
accepted accounting standards) guarantees such as those given by Member States 
do not meet the definition of being an asset and so are not recorded in the accounts 
as  such,  rather  they  are  disclosed  in  the  notes  to  the  accounts.  EU  accounting 
standards  follow  international  standards.  Modification  of  these  EU  rules  would 
therefore  be  contrary  to  international  standards  and  so  could  lead  to  a  qualified 
opinion by the ECA. 

Concerning  the  study  on  the  possibility  to  the  creation  of  a  pension  fund:  a 
thorough analysis was done at the time of the review of the Staff Regulations (SR) 
in 2004 and the current solution was finally chosen and embedded in the SR. 

2. 

(European  Parliament,  §4)  The  EP  urges  the  Commission  to  eliminate  the  risk  of 
misstatements in the accounts in the future by dealing with the weaknesses identified 
by the Court of Auditors without delay 

Commission's response: 

It is impossible to eliminate entirely the risk of misstatement in a set of accounts. 
The  Commission  instead  focuses  on  reducing  this  risk  to  an  acceptable,  cost-
efficient  level.  It  has  therefore  put  in  place  a  robust  accounting  system  and 
surrounding rules and procedures that have, for the last 3 years, resulted in a fully 
clean (unqualified opinion) on the reliability of the accounts produced. This means 
that  in  the  view  of  the  Commission  and  the  Court,  these  accounts  are  free  from 
material  misstatement.  Moreover,  the  Commission  continues  to  improve  its 
methods and controls, through actions such as the Accounting Quality project, so 
as to address the remarks of the Court and thus reduce the risk of misstatements 
further. 

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Legality and regularity 

3. 

(European Parliament, §6) The EP notes that while Article 317TFEU states that the 
Commission implements the Union budget on its own responsibility, in the present 
understanding of ‘shared management’ most of the management functions are carried 
out  by  national  bodies  not  directly  accountable  at  Union  level  and  over  which  the 
Commission has limited powers of enforcement; takes the view therefore that these 
bodies are meant to be directly accountable at Union level to the Commission; insists 
that 
the 
implementation of the Union budget but on the contrary requires it to take a hard line 
with  any  Member  States  not  fulfilling 
'shared 
management' 

their  responsibilities  under 

this  does  not  absolve 

its  responsibility  for 

the  Commission  of 

Commission's response: 

The Commission has taken the requested action and will demonstrate the impact of 
this in the 2011 Annual Activity Reports of the Directors General. 

Although the Commission has the ultimate responsibility for the implementation of 
the budget according to the Treaty, in the area of Cohesion, Member States are in 
the  first  instance  responsible  for  the  legal  and  regular  implementation  of  the 
Structural  Funds  in  shared  management  (art  70  of  Regulation  1083/2006).  The 
accountability  of  the  Member  State  and  the  assurance  they  provide  to  the 
Commission  have  been  strengthened  in  the  current  legislation,  through  the 
establishment  of  an  ex-ante  approval  procedure  of  the  management  and  control 
systems and the setting up of programme audit authorities. 

The  current  Structural  Fund  Regulations  also  provide  the  Commission  with  all 
necessary  tools  to  perform  its  supervisory  role  in  case  of  non  respect  of  their 
obligations by Member States, and in particular: 

-  interruptions  and  suspensions  of  interim  payments  and  implementation  of 
financial corrections. 

The Commission exercised rigorously this supervisory role in 2010 by interrupting 
63  (49  ERDF  and  14  ESF)  payment  deadlines  and  adopting  one  suspension 
decision  for  2007-2013  operational  programmes  and  five  suspension  decisions 
(ESF)  on  2000-2006  operational  programmes,  where  serious  deficiencies  or 
irregularities have been detected. The Commission is pursuing this strict policy in 
2011, with 54 interruptions of payment deadlines decided (40 for ERDF and 14 for 
ESF) by 30 June 2011. Furthermore, the Commission proposed in the revision of 
the  Financial  Regulation  in  Article  56  to  increase  the  accountability  and 
ownership  of  the  bodies  managing  the  funds,  notably  by  introducing  annual 
management  declarations  of  assurance,  which  already  exist  for  agriculture.  The 
declaration  is  intended  to  provide  a  direct  link  of  accountability  between  the 
managing bodies and the Commission. The proposal is currently subject to inter-
institutional discussion, the final outcome will be subject to the legislative debate. 

In  the  area  of  agriculture,  expenditure  is  managed  and  controlled  through  a 
system which already includes, on the one hand, all the necessary building blocks 

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to  guarantee  a  sound  administration  at  Member  States’  level  and,  on  the  other 
hand, allows the Commission to audit the proper functioning of their management 
and  control  systems  and,  if  need  be,  to  counter  the  risk  of  financial  losses  as  a 
result  of  any  deficiencies  in  the  set-up  and  operation  of  those  systems  through 
clawing  back  expenditure  from  Member  States  under  the  conformity  clearance 
mechanism. 

This comprehensive system is based on four levels: 

-  a  compulsory  administrative  structure  at  the  level  of  Member  States,  centred 
around the establishment of accredited paying agencies;  

-  detailed  systems  for  controls  by  paying  agencies  before  payment  and  dissuasive 
sanctions to be applied by those paying agencies; 

-  ex-post  controls  by  independent  audit  bodies  on  the  paying  agencies'  annual 
accounts  and  the  functioning  of  their  internal  control  systems  and  by  special 
departments on aid measures other than direct aid payments; 

-  clearance  of  accounts  procedures  operated  by  the  Commission  (annual 
accounting (financial) clearance and multi-annual conformity clearance). 

Taken together, the four levels and the results that they produce are the basis for 
the  Commission  to  gain  reasonable  assurance  as  to  the  effective  management  of 
the  risk  of  error  in  the  legality  and  regularity  of  the  financial  transactions  in 
respect of the final beneficiaries. 

4. 

(European  Parliament,  §7)  The  EP  calls,  pursuant  to  Article  287(3)  TFEU,  as 
regards  shared-management  controls,  for  cooperation  to  be  stepped  up  between 
national  audit  bodies  and  the  Court  of  Auditors;  proposes  examination  of  the 
possibility  of  national  audit  bodies,  in  their  capacity  as  accredited  and  independent 
external  auditors,  and  with  due  regard  for  international  audit  standards,  issuing 
national  audit  certificates  for  the  management  of  Union  funds,  which  would  be 
submitted  to  Member  State  governments  with  a  view  to  being  produced  during  the 
discharge  process  in accordance  with an appropriate inter-institutional procedure to 
be introduced 

Commission's response: 

This  recommendation  has  been  implemented  by  means  of  the  Commission's 
proposal  for  the  triennial  revision  of  the  Financial  Regulation,  adopted  in 
December 2010. It includes a requirement for annual management declarations of 
assurance  from  accredited  bodies  in  the  Member  States,  accompanied  by  an 
independent  audit  opinion  thereon.  Under  this  proposal,  it  is  for  the  Member 
States to decide whether independent audit opinions are drawn up by its national 
Supreme Audit Institution (SAI), another public sector auditor, or a private audit 
firm. 

When  auditing  the  performance  of  a  Managing  Authority,  the  audit  body 
designated  by  the  Member  State  will  contribute  to  the  internal  control  process 
piloted  from  the  Commission.  It  will  apply  international  standards  and  a 

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methodology agreed by the Commission, and will necessarily be subject to controls 
from the Commission, and in consequence subject to the scrutiny of the Court of 
Auditors later on. 

5. 

(European Parliament, §14) The EP calls on the Commission and the Member States 
to  make  annual  improvements  in  the  most  likely  error  rates  in  implementing  the 
Union budget; considers that the aim should be to bring the rate below the materiality 
threshold, thus securing a positive statement of assurance from the Court of Auditors 

6. 

Commission's response: 

The Commission  agrees to do its utmost for further reducing error rates so as to 
contribute  as  much  as  possible  to  increasing  the  European  Court  of  Auditors 
positive  assessment  of  the  budget.  However,  any  development  of  the  respective 
percentages  of  the  sectoral  assessments  will  depend  on  a  number  of  factors, 
notably the effect of ongoing action plans, the effect of the 2007-2013 legislation, 
and the structure of the Court's annual report. 

In addition, it is inevitable that the error rates can oscillate around the target set. 
Over years, improvements should be seen from the whole budget perspective. 

(European  Parliament,  §15  and  §16)  The  EP  recalls  its  invitations  to  the 
Commission  to  present  a  proposal  for  the  introduction  of  mandatory  national 
management declarations (NMDs) issued and signed at ministerial level, made public 
and  duly  audited  by  an  independent  auditor  so  far  as  such  declarations  are  a 
necessary and indispensable first step to improve the efficiency of national systems 
and to enhance national accountability for the use of Union money. The EP reiterates 
that  for  Member  States  with  federal  systems  or  substantial  decentralisation  such 
NMDs  could  take  the  form,  in  whole  or  in  part,  of  a  collation  of  regional 
declarations, provided that each component declaration has been audited and signed 
by an elected political office-holder; insists that the Commission will present such a 
proposal by September 2011 irrespective of the fact that some Member States might 
not yet agree with such an initiative. NMDs should contain full information about the 
use of Union funds, and after the signing of NMDs at ministerial level they should be 
made public 

Commission's response: 

In  the  Commission's  view,  management  declarations,  audited  by  an  independent 
auditor, as currently already the case for Agriculture, would be more appropriate 
for  obtaining  assurance  from  Member  States  on  the  proper  management  of  EU 
Funds than any mandatory national declarations. For this reason, the Commission 
proposal  for  the  triennial  revision  of  the  Financial  Regulation  adopted  in  May 
2010  included  a  requirement  for  annual  management  declarations  of  assurance 
from  accredited  bodies  in  the  Member  States,  accompanied  by  an  independent 
audit opinion thereon. If a Member State has accredited more than one body per 
policy area, it should, in addition, provide the Commission with a synthesis report 
with  an  overview  at  national  level  of  all  management  declarations  of  assurance 
and  audit  opinions  thereon.  The  inter-institutional  discussion  on  the  revision  of 
the FR is currently ongoing. 

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Recovery and correction mechanisms 

7. 

(European  Parliament,  §21)  The  EP  emphasises  that  the  'financial  correction' 
mechanism  should  not  be  used  as  an  easy  way  of  avoiding  the  use  of  a  'recovery' 
procedure  and  that  whenever  possible  a  'recovery'  procedure  should  be  pursued  to 
ensure that those who have benefitted from sums paid 'incorrectly' do not retain such 
funds; recalls its request that all data concerning recoveries should be an integral part 
of, and included in, the database of final beneficiaries 

Commission's response: 

The Commission is taking the requested action with exception of the second part of 
the recommendation. It intends to take measures to that effect before 31/12/2012. 

Under  the  system of shared  management  in Cohesion, the Commission  primarily 
cooperates  with  Member  States  and  regions  for  the  set-up,  management  and 
control  of  programmes.  The  management  of  projects  is  under  the  domain  of  the 
Member  States  and  the  programme  authorities.  Following  this  logic,  financial 
corrections,  understood  as  corrections  agreed  between  the  Commission  and 
Member States or decided by the Commission, always address the Member States 
and their programmes and not directly the beneficiaries and their projects. In case 
of  financial  corrections  agreed  between  the  Commission  and  Member  States,  the 
amount that is to be corrected is deducted from the following payment claim of the 
Member State to the Commission. In case of a financial correction which is made 
by  a  Commission  decision,  a  recovery  order  is  issued  by  the  Commission  against 
the Member State. All this does not mean that the corrected amounts are born by 
the national budgets and the taxpayers. The Member States are required to recover 
from beneficiaries whenever possible. 

In  this  respect,  the  Commission  will  carry  out  in  the  second  semester  of  2011  a 
specific  audit  enquiry  on  the  Member  States'  systems  for  recoveries,  in  order  to 
gain  assurance  on  the  quality  of  data  submitted  in  the  annual  statements  on 
recoveries  and  withdrawals  by  Member  States  and  to  verify  where  possible  the 
national recovery process. 

The  Commission  will  not  be  taking  action  to  include  data  on  recoveries  in  the 
database  on  final  beneficiaries.  The  reason  for  this  is  that  this  database  aims  at 
fulfilling the obligation of transparency set by art. 53 of the Financial Regulation, 
but  there  is  no  legal  basis  to  impose  additional  costs  to  Member  States  to  create 
automatic  links  and  compatibility  with  the  data  stored  in  the  IT  systems  of  the 
certifying authorities. 

As  regards  Agriculture,  financial  corrections  are  determined  on  the  basis  of  the 
nature and gravity of the infringement and the financial damage caused to the EU. 
Where possible, the amount is calculated on the basis of the loss actually caused or 
on  the  basis  of  an  extrapolation.  Where  this  is  not  possible,  flat-rates  are  used 
which  take  account  of  the  severity  of  the  deficiencies  in  the  national  control 
systems  in  order  to  reflect  the  financial  risk  for  the  EU.  Where  undue  payments 
are  or  can  be  identified  as  a  result  of  the  conformity  clearance  procedures, 
Member States are required to follow them up by recovery actions against the final 

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8. 

9. 

beneficiaries.  However,  even  where  this  is  not  possible  because  the  financial 
corrections  only  relate  to  deficiencies  in  the  Member  States'  management  and 
control  systems,  financial  corrections  are  an  important  means  to  improve  these 
systems  and,  thus,  to  prevent  or  detect  and  recover  irregular  payments  to  final 
beneficiaries.  The  conformity  clearance  thereby  contributes  to  the  legality  and 
regularity of the transactions at the level of the final beneficiaries. 

(European Parliament, §24) The EP Invites the Commission to refine the financial 
reporting guidelines to ensure that all relevant information about the operation of the 
multi-annual  correction  mechanisms  is  appropriately  disclosed  in  the  accounts; 
further asks the Commission to keep Parliament informed on its efforts to verify the 
work of the national audit authorities 

Commission's response: 

The Commission issued specific guidelines to the DGs concerning the reporting of 
financial  corrections  at  31/12/2010.  Additionally,  the  Commission  provides 
information about its verification of the work of  the  national audit authorities in 
the context of the Annual Activity Reports of the Directors General. 

(European  Parliament,  §26)  The  EP  believes  that  future  rules  applicable  to  the 
Union  budget  and  programmes  should  provide  that  unspent  Union  funds  are  not 
returned  to  the  Member  States  if  a  Member  State  has  not  paid  back  to  the  Union 
amounts  incorrectly  received  and  invites  the  Commission  to  take  into  account  any 
financial  correction  not  yet  paid  by  the  Member  States  before  returning  unspent 
annual budget appropriations to the Member States 

Commission's response: 

The EU budget is by construction balanced. The balance from each financial year 
is entered in the budget for the following financial year as revenue in the case of a 
surplus or as a payment appropriation in the case of a deficit. In the former case, 
such surplus decreases correspondingly Member States' contributions based on the 
GNI resource. Nevertheless, the surplus calculations take into account the amount 
of executed financial corrections. 

10. 

(European  Parliament,  §27)  The  EP  repeats  its  opinion  from  the  2008  discharge 
resolution, that reallocation of ineligible expenditure should only be allowed if it was 
discovered by the Member States themselves; further welcomes that the Commission 
has made use of the new possibility to immediately suspend payments and demands 
that suspension of payments continue to be used resolutely and consistently, making 
the  decisions  taken  and  the  reasons  for  them  clear  to  Parliament;  calls  on  the 
Commission  to  develop  a  system  which  will  punish  underperformers,  and  reward 
those who perform well, by reducing their administrative burden 

Commission's response: 

The  Commission  is  taking  the  requested  action  to  resolutely  and  consistently 
exercise its supervisory role. It intends to demonstrate measures taken to that effect 
in the 2011 Annual Activity Reports of the Directors General. 

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However, the Commission is not in the capacity to take measures with regard to the 
first  sentence  of  the  request.  The  reason  for  that  is  that  the  current  regulatory 
framework does not provide for sanctions of this type, but for financial corrections, 
as corrective measures to restore the regularity of expenditures and to protect the 
EU  budget.  Furthermore,  the  Commission  will  make  proposals  for  the  future 
regulations to encourage performance and to reduce administrative burden while 
ensuring continuous high control standards. 

The Commission exercised rigorously this supervisory role in 2010 by interrupting 
63  (49  ERDF  and  14  ESF)  payment  deadlines  and  adopting  six  suspension 
decisions  for  2007-2013  and  2000-2006  ESF  operational  programmes,  where 
serious  deficiencies  or  irregularities  have  been  detected  in  the  management  of 
Structural Funds. The Commission is pursuing this strict policy in 2011, with 54 
interruptions  of  payment  deadlines  decided  (40  for  ERDF  and14  for  ESF)  by  30 
June 2011. 

The possibility to interrupt payments and impose financial corrections also acts as 
an incentive for the Member State to improve the management and control systems 
and implement the necessary financial corrections. Indeed in case a Member State 
applies  the  financial  correction  itself,  it  has  the  incentive  to  act  fast,  because 
otherwise  it  penalises  itself  (outstanding  payments  are  still  blocked  and  risk 
automatic  de-commitment  under  the  N+2/3  rule).  Finally  if  the  correction  is 
imposed  by  the  Commission  through  a  formal  decision,  it  represents  a  net 
reduction of allocations available for the Member State. 

11. 

(European  Parliament,  §28)  Provide  Parliament  with  an  analysis  of  the  paying 
agencies' capacity to deliver reliable data based, in addition, on ex-ante declarations 
and  on-the-spot  checks,  comparing  those  declarations  and  those  checks  with  the 
information  given  by  the  Court  of  Auditors,  and  to  check  the  veracity  of  the 
information provided by these bodies in the last four years 

Commission's response: 

An  analysis  of  the  information  provided  by  paying  agencies  and  verified  by  the 
certification  bodies is provided in the AAR  on  an  annual  basis.  The  Commission 
wishes  to  point  out,  that  the  Court  of  Auditors  only  audits  a  small  part  of  the 
paying  agencies  every  year  and  does  not  provide  representative  control  statistics 
per Member State, so such a comparison is not possible to draw. 

12. 

(European  Parliament,  §32)  The  EP  asks  the  Commission  to  carefully  analyse  the 
Member States' reports on recoveries and, if necessary, carry out further training 

Commission's response: 

The Commission is taking the requested action. It intends to take measures to that 
effect  and  to  report  results  in  the  2011  and  2012  Annual  Activity  Reports  of  the 
Directors General. 

The  Commission  has  planned  an  audit  enquiry  on  recoveries  in  the  area  of 
Structural Funds as from the second semester of 2011, to review for all Funds the 
corrective mechanism systems put in place by  certifying authorities and to assess 

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the assurance the Commission can place on the reported figures, for a sample of 
programmes  and  Member  States  selected  on  the  basis  of  a  risk  analysis.  The 
results  of  this  enquiry  will  be  reported  in  the  2011  and  2012  Annual  Activity 
Reports of the Directors General of the concerned services. Audit findings will be 
communicated  to  the  concerned  Member  States  and  additional  guidance  and 
training will be provided, if necessary. 

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Member State responsibility and transparency 

13. 

(European  Parliament,  §33)  The  EP  notes  with  concern  the  slow  pace  of 
improvements  to  the  financial  management of  Union  funds;  at  the  same  time  takes 
note of the repeated opinions of both the Court of Auditors and the Commission that 
the quality of management and control systems differs widely between the Member 
States  and  between  the  different  programmes;  calls  on  the  Commission  to 
systematically account for these differences in control systems and to make available 
clear  evaluations  of  efforts  by  the  Member  States  to  detect  irregularities  so  as  to 
make  sure  that  those  Member  States  detecting  higher  irregularities  due  to  more 
onerous control systems are not discredited at any point 

Commission's response: 

The Commission has taken the requested action. 

The audit efforts of the different Member States and programmes' audit authorities 
are  thoroughly  analysed  and  have  been  for  the  first  time  disclosed  in  the  2011 
Annual Activity Reports of the Directors General. The Commission also takes into 
account the national audit efforts and actions taken by Member States to follow-up 
such efforts for its follow-up of reported irregularities and error rates. The annual 
report  on  the  protection  of  the  financial  interests  of  the  Union  also  takes  into 
account such considerations. 

14. 

(European  Parliament,  §35)  The  EP  Invites  the  Commission  to  publish  in  the 
Synthesis  Report  an  assessment  of  the  strengths  and  weaknesses  of  individual 
Member  States'  management  and  control  systems  on  the  basis  of  the  audit  work  it 
already  performs  as  well as other relevant available information; further invites the 
Commission  to  include  a  progress  report  on  the  improvements  in  the  discharge 
information;  calls  on  the  Commission  to  establish  a  ‘scoreboard’  on  the  quality  of 
controls per Member State and policy area according to a matrix model per Member 
State 

Commission's response: 

The  Commission  is  of  the  view  that  it  already  reports  extensively  on  the 
effectiveness of management and control systems in the respective Annual Activity 
Reports  of  the  Directors  General.  The  Annual  activity  reports  for  2010  provide 
extensive information per Member state, per policy area and programming period. 
The  Commission  has  instructed  the  DGs  concerned  to  systematically  provide  in 
their Annual Activity Reports additional and detailed information on the financial 
management  by  Member  States,  including  information  on  financial  corrections 
and  the  assessment  of  the  national  control  systems  by  operating  programme  and 
Member State. 

However, the Commission does not agree with the suggestion that this information 
should also be presented in the synthesis report, as it would be technically complex 
to consolidate information from different  policy areas  and this would  burden the 
report with significantly technical data. 

EN 

14 

   EN 

 
15. 

(European Parliament, §36) The EP urges the Commission on the basis of concrete 
data  per  Member  State  and  per  policy  area,  to  report  to  Parliament  on  the 
effectiveness  of  management  and  control  mechanisms  and  to  implement,  together 
with  the  European  Anti-Fraud  Office  (OLAF),  stricter  control  on  the  spending  of 
Union money 

Commission's response: 

The  Commission  has  instructed  the  DGs  concerned  to  systematically  provide  in 
their  Annual  Activity  Reports  detailed  information  on  the  financial  management 
by  Member  States,  including  information  on  financial  corrections  and  the 
assessment of the national control systems by operating programme and Member 
State. Therefore, the Commission is of the view that the Directors General of the 
concerned Services already reports extensively on the effectiveness of management 
and control systems in the respective Annual Activity Reports. 

The  Commission  will  continue  to  rigorously  exercise  its  supervisory  role  by 
pressing Member States to address the  deficiencies detected in their management 
and  control  systems  and  also  by  applying  interruptions  and  suspensions  of 
payments,  as  well  as  financial  corrections  whenever  necessary.  Interruptions  of 
payments  have  been  increasingly  used  as  this  became  a  new  legal  tool,  available 
for  the  2007-2013  programming  period.  The  more  rigorous  policy  towards 
financial  corrections  when  serious  weaknesses  are  detected,  is  demonstrated 
through the increase in the overall figure for financial corrections in 2008, 2009 
and 2010 compared to the years before the 2008 Structural funds Action Plan. 

The  cooperation  with  OLAF  has  been  reinforced  with  the  updated  "Joint  Fraud 
Prevention  Strategy  for  ERDF,  ESF,  CF  and  EFF  2010-2011"  adopted  by  the 
Structural Funds DGs and OLAF in July 2010. The objective of the strategy is to 
reinforce  fraud  risk  assessment;  to  provide  more  proactive  guidance  and  support 
for Member States in fraud prevention and fraud detection work and to raise the 
level of fraud awareness in the Services and in the Member States. 

16. 

(European  Parliament,  §40)  The  EP  believes  that  a  ‘scoreboard’  on  the  quality  of 
controls  per  Member  State  and  policy  area  as  requested  would  be  an  important 
element in such an analysis and invites the Commission to follow-up on this request 
starting  with  its  Synthesis  Report  on  2011  and  in  time  for  the  2010  discharge 
procedure 

Commission's response: 

The  Commission  is  of  the  view  that  it  already  reports  extensively  on  the 
effectiveness of management and control systems in the respective Annual Activity 
Reports  of  the  Directors  General.  The  Annual  activity  reports  for  2010  provide 
extensive information per Member State, per policy area and programming period. 
The  Commission  has  instructed  the  DGs  concerned  to  systematically  provide  in 
their Annual Activity Reports additional and detailed information on the financial 
management  by  Member  States,  including  information  on  financial  corrections 
and  the  assessment  of  the  national  control  systems  by  operating  programme  and 
Member State. 

EN 

15 

   EN 

 
However, the Commission does not agree with the suggestion that this information 
should also be presented in the synthesis report, as it would be technically complex 
to consolidate information from different  policy areas  and this would  burden the 
report with significantly technical data. 

17. 

(European  Parliament,  §42)  The  EP  invites  the  Commission  to  publish  in  the 
Synthesis Report clear and unequivocal information on the value of recovery orders 
made  against  individual  Member  States  as  well  as  a  systematic  presentation  of  the 
results of recovery and correction mechanisms 

Commission's response: 

In  February  2011  the  Commission  instructed  the  services  operating  in  shared 
management  to  report  in  their  Annual  Activity  Reports  information  on  financial 
corrections split by Member State, programming period and fund. From now  on, 
this information will be provided annually in the AARs. Whereas the Commission 
agrees to publish detailed information on financial corrections in the AARs, it does 
not consider the synthesis report to be an appropriate vehicle to present such data. 
Information  on financial  corrections per Member State and programming period 
is also disclosed in the notes to the annual accounts. 

18. 

(European Parliament, §46) The EP requests the Commission to make the Member 
States'  annual  summaries  publicly  available  as  part  of  next  year's  discharge 
procedure  and  upgrade  the  information  provided  in  these  summaries  to  present  a 
meaningful  picture  of  the  Member  States'  financial  management  performance; 
underlines  that  making  the  Member  States'  annual  summaries  publicly  available 
should be considered as a step towards NMDs 

Commission's response: 

The  decision  to  make  Annual  Summaries  public  is  for  the  Member  States 
concerned. The Commission is legally prevented from doing so unless the Member 
State concerned explicitly agrees.  

Yet, the Commission has instructed the DGs concerned to systematically provide in 
their  Annual  Activity  Reports  additional  and  detailed  information,  including 
information  on  financial  corrections  and  the  assessment  of  the  national  control 
systems by operating programme and Member State.  

This  information  significantly  increases  transparency  on  financial  management 
performance  by  the  Member  States  and  largely  contributes  to  meet  the  EP 
information request. 

EN 

16 

   EN 

 
Tolerable risk of errors 

19. 

(European  Parliament,  §48)  The  EP  reaffirms  that  the  Commission  must  pursue  a 
zero-tolerance approach to all cases of mismanagement and fraud 

Commission's response: 

The  Commission  does  pursue  a  zero-tolerance  approach  to  all  cases  of 
mismanagement and fraud. 

20. 

(European Parliament, §50) The EP invites the Commission to identify weaknesses 
in  present  management  and  control  systems  as  well  as  to  analyse  the  cost  and 
benefits of various possible changes; underlines that where it is difficult to obtain a 
sufficiently high level of compliance with scheme rules, a number of options such as: 
simplification  of  the  rules,  re-designing  the  programme,  tightening  controls,  or 
terminating the programme, are possible 

Commission's response: 

The  Commission  is  currently  preparing  the  proposals  for  sectoral  legislation  for 
the  2014-2020  programming  period.  It  is  considering  already  providing  in  the 
legislative  financial  statements  a  description  of  the  control  system  set  up, 
estimation  on  the  cost  and  benefits  of  controls  and  the  expected  risk  of  non-
compliance with applicable rules. 

21. 

(European Parliament, §52) The EP takes the view that a forward-looking approach 
to  a  possible  introduction  of  a  comprehensive  concept  of  ‘tolerable  risk  of  error’ 
would  include  in  the  Financial  Regulation  a  requirement  for  the  Commission  to 
match spending proposals with an assessment of the irregularity risks 

Commission's response: 

The  inter-institutional  discussion  on  the  revision  of  the  Financial  Regulation  is 
currently ongoing. The Commission supports the Parliament's suggestion that an 
assessment of the risk of irregularities should be considered at the time when new 
spending  proposals  are  put  forward.  In  the  framework  of  the  preparation  of  the 
new sectoral legislation for the 2014-2020 period, the Commission is considering 
already providing in the legislative financial statements a description of the control 
system set up, estimation on the cost and benefits of controls and the expected risk 
of non-compliance with applicable rules. 

22. 

(European Parliament, §53) The EP calls for a study of the distinction between the 
materiality threshold, which is associated with the holding of an audit and therefore 
subject to assessment by the Court of Auditors, and the acceptable error rate, which 
is a concept associated with internal audits for which the Commission is responsible 

EN 

17 

   EN 

 
Commission's response: 

In  the  Commission's  view  the  two  terms  are  already  clearly  defined  in  the  DAS 
methodology of the European Court of Auditors and in the Court's "single audit 
model" opinion of 2/2004, so that a study on the subject would not be required. 

The concept of materiality is recognised in the international auditing standards. It 
is  a  concept  that  acknowledges  that  underlying  transactions  can  rarely  be 
absolutely  error  free.  The  materiality  threshold  serves  as  an  important  factor  for 
auditors both in the calculation of sample sizes for substantive testing and in the 
interpretation  of  the  audit  results  achieved.  Errors  are  deemed  to  be  material  if 
they  may  affect  the  decisions  of  the  stakeholders.  The  Court  of  Auditors  is 
independent  in  establishing  its  materiality  level,  but  is  required  according  to 
international auditing standards to take account of stakeholders' expectations. 

The  tolerable  risk  of  error,  on  the  other  hand,  should  be  considered  to  be  a 
management  tool  which  takes  account  of  the  cost  and  benefits  of  controls.  The 
trade-off between the costs of controls against the benefits they bring is a critical 
aspect of a control strategy. 

EN 

18 

   EN 

 
Commission's Internal Audit Service 

23. 

(European Parliament, §55) The EP invites the Commission to carry out an external 
quality  review  of  all  the  IAC  in  the  Commission  and  to  inform  Parliament  of  the 
results 

Commission's response: 

An  external  quality  review  of  the  Internal  Audit  Capabilities  has  been  launched 
under the supervision of the Internal Audit Service. The correspondent results are 
expected by the end of 2011. 

24. 

(European  Parliament,  §56)  The  EP  requests  the  Commission  to  split  the 
hierarchical  power  between  people  with  accounting  responsibility  and  those 
responsible  for  transferring  funds  in  application  of  the  customary  rules  on  security 
and separation of powers for internal control in treasury management 

Commission's response: 

The  basic objective  of  the  segregation of duties between accounting and  treasury 
functions is to prevent the potential risk that inappropriate transactions be carried 
out by the treasurer, resulting in economic losses for the organisation that are then 
inappropriately  accounted  for  by  the  accountant  under  the  authority  of  the 
treasurer,  or  vice  versa.  In  the  Commission's  context  the  treasury  management 
activities that fall under the responsibility of the Accounting Officer are limited in 
scope  by  the  Financial  Regulation  and  its  Implementing  Rules.  In  particular  the 
Commission's  treasury  cannot  intervene  or  make  modifications  in  the  payment 
authorisation  or  accounting  process  (which  falls  under  the  responsibility  of  the 
Authorising Officers), and its responsibility is limited to the technical execution of 
payment  instructions  initiated  and  fully  authorised  by  the  relevant  spending 
departments. The only transfers of funds that can be initiated by the Commission's 
treasury are transfers between its own bank accounts (that are instructed for cash 
management  purposes).  The  possibility  therefore  does  not  exist  that  funds  be 
transferred  to  third  parties  on  the  initiative  of  the  Commission's  treasury 
department.  The  above  in  practice  leaves  the  Commission's  treasury  operations 
without responsibilities that could represent any significant potential conflict with 
those  of  its  Accountant.  At  the  same  time  within  the  Commission's  treasury 
department  there  is  a  full  segregation  of  duties  between  the  tasks  related  to  the 
reconciliation  of  the  bank  accounts,  and  the  payment  execution  tasks.  The  two 
profiles are incompatible in the Commission's system, so that officials authorised 
to work on the payment execution have no authorisation to post accounting entries 
and  vice  versa.  A  recent  audit  of  the  Court  of  Auditors  on  the  Commission's 
treasury management (special report 5/2009) has not revealed any weaknesses or 
potential risks in this area). 

25. 

(European Parliament, §57 and §58) The EP notes the Commission annual report to 
the discharge authority (COM(2010)0447) on internal audits carried out in 2009 and 
that the Commission's internal auditor is of the opinion that an overview at the level 
of the institution is necessary. The EP invites  the Commission to make appropriate 
bodies  responsible  for  obtaining  this  overview  and  for  making  appropriate 

EN 

19 

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recommendations  whilst 
the 
implementation  of  each  process;  recommends  that  the  Commission's  governance 
framework  be  adapted  to  allow  for  enhanced  institutional  overview;  would 
appreciate being informed in a timely manner about developments in this matter 

to  reduce  responsibility  for 

taking  care  not 

Commission's response: 

The  Commission  considers  that  the  current  governance  framework  provides  a 
sound  basis  for  improving  the  performance  of  the  financial  actors  within  the 
Commission.  According  to  the  Financial  Regulation  (Article  60)  the  operational 
implementation of the budget is delegated by the College to the Directors-General 
who, as Authorising Officers by Delegation, are responsible for the achievement of 
their specific policy objectives and for the management of the human and financial 
resources  entrusted  to  them.  The  Annual  Activity  Report  and  the  Declaration  of 
assurance are the main vehicles through which they give account to the College on 
the  performance  of  their  duties  and  ensure  transparency  to  the  discharge 
authorities.  These  management  representations  are  examined  annually  by  the 
Court  of  Auditors  and  are  made  public.  In  the  Commission's  view  the  Annual 
Activity  Reports  provide  an  unprecedented  level  of  institutional  overview  of  the 
management of the Commission Services. 

26. 

(European Parliament, §59) The EP invites the IAS to allocate part of its resources 
to an examination of whether the spending by the main DGs is efficient, economical 
and effective, thereby completing the current financial and compliance audits 

Commission's response: 

As  part  of  its  audit  programme  for  2011,  the  Internal  Audit  Service  (IAS)  has 
developed  its  practice  of  carrying  out  a  certain  number  of  performance  audits, 
focussing on the effectiveness, efficiency and economy of use of EU resources. The 
Commission agrees to invite the IAS to further develop these aspects in its future 
audit programmes. 

27. 

(European Parliament, §60) The EP invites the IAS to audit the methodology to be 
used for the production of the Article 318 TFEU evaluation report and to assess the 
work done 

Commission's response: 

As  part  of  its  audit  programme  for  2011,  the  Internal  Audit  Service  (IAS)  has 
developed  its  practice  of  carrying  out  a  certain  number  of  performance  audits, 
focussing on the effectiveness, efficiency and economy of use of EU resources. The 
Commission agrees to invite the IAS to further develop these aspects in its future 
audit programmes. 

EN 

20 

   EN 

 
Single audit 

28. 

(European Parliament, §61 and §62) The EP urges the introduction of a single audit 
model whereby audits are carried out, recorded and reported to a common standard - 
as proposed by the Court of Auditors in its Opinion 2/2004 and repeatedly supported 
by  Parliament  -  where  each  level  of  control  builds  on  the  proceeding  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; 
believes  that  internal  controls  should  provide  reasonable  assurance  on  the  legality 
and  regularity  of  transactions,  and  compliance  with  the  principles  of  economy, 
efficiency  and  effectiveness  and  underlines  that  controls  should  be  coordinated  to 
avoid unnecessary duplication. The EP invites the Commission to present a report on 
the  feasibility  of  introducing  a  single  audit  model  applicable  to  the  Union  budget 
putting  to  an  end  the  current  juxtaposition  of  national  and  Union  internal  control 
systems;  invites  the  Commission  to  adopt  a  risk-based  approach  for  the  auditing 
sampling rather than an approach based on statistical sampling 

Commission's response: 

The  Commission's  Action  Plan  Towards  an  Integrated  Internal  Control 
Framework  and  the  Structural  Funds  Action  Plan  took  account  of  the  multiple 
recommendations included in the Court's Opinion 2/2004. These recommendations 
covered  the  entire  control framework  and  were not limited to single audit,  as the 
Court  concluded  "there  is  no  single  recognised  definition  of  ‘single  audit’".  The 
Commission's framework now fulfils the requirement of the Court that there is "a 
chain  of  control  procedures,  with  each  level  having  specific  defined  objectives 
which take into account the work of the others". 

The structures in place therefore aim at avoiding unnecessary duplication, and do 
not put into question the Court's role as external auditor, or the independence of 
other  bodies  outside  the  internal  control  framework  such  as  SAIs  reporting  to 
national parliaments. 

The  Commission  is  already  conducting  ongoing  activity  with  Member  State 
administrations  including  the  annual  sharing  of  beneficiary  data,  in  order  to 
achieve the maximum level of coordination between national and Union systems. 
All  management  modes  foresee  a  coherent  interaction  between  institutions  at 
European,  national,  and  regional  level.  The  current  level  of  positive  cooperation 
between control and audit bodies across the budget will continue to be reinforced, 
but the work on the integrated control framework showed that there are limitations 
preventing  the  introduction  of  a  single  model  due  to  the  diverse  nature  of 
European level policies, management structures, and heterogeneous beneficiaries. 

Under  the  Commission's  governance  model,  it  is  the  responsibility  of  each 
Authorising  Officer  by  Delegation  to  decide  on  his/her  control  strategy.  This 
decision  encompasses  the  ex-post  "audits"  and  the  sampling  strategy  chosen. 
Furthermore, there is no universally preferable sampling strategy, as the decision 
depends on the objectives to be met in each given case. 

EN 

21 

   EN 

 
In  view  of  the  described  activities  which  already  take  into  account  the  Court's 
opinion  2/2004  on  the  single  audit  principle,  there  is  no  need  for  a  feasibility 
report. 

EN 

22 

   EN 

 
Transparency 

29. 

(European Parliament, §65 and §66) The EP calls on the Commission to follow up 
on  the  request  of  the  Court  of  Justice  (cases  C-92/09  and  C-93/09)  and  to  swiftly 
propose  criteria  where  the  public  interest  in  transparency  should  override  the 
protection  of  personal  data  of  Union  funds'  beneficiaries;  recalls  that  the  Court  of 
Justice has proposed criteria such as the periods during which natural persons have 
received  Union  funds,  the  frequency  of  such  aid  or  the  nature  and  amount  of  aid 
(Volker and Markus Schecke GbR, paragraph 89). The EP asks the Commission to 
define  the  criteria  mentioned  by  the  Court  of  Justice  in  the  Financial  Regulation, 
sectoral legislation or any other act in a way that allows a high level of transparency, 
ensuring that data on beneficiaries falling under these criteria can be published again; 
urges the Commission to monitor the Member States' obligation to publish the data 
correctly and in a timely manner and requests the Commission to present the results 
of its monitoring in the next Synthesis Report 

Commission's response: 

The Court of Justice confirmed the respect of the principle of proportionality and 
the legality of the publication relating to the data of legal persons. In its judgment 
the Court did not question or cast doubt on the legality of the publication of data of 
individuals benefiting from other EU funds. Moreover, the Court did not question 
the  validity  of  the  Financial  Regulation.  The  concerned  horizontal  legislation 
continues to apply and Member States have the obligation to implement it. 

The  Commission  will  analyse  and  propose  to  the  legislative  authority  the 
provisions  considered  necessary  to  maintain  the  requested  level  of  transparency 
and  foresee  publication  of  information  about  beneficiaries  of  EU  funds  while 
complying with the principle of proportionality in order to ensure the fair balance 
between on the one hand, the need to inform the general public on the use of the 
EU funds and, on the other hand, the right of the beneficiaries to privacy and to 
protection of personal data. It is foreseen to take account of the Court's judgment 
through  parliamentary  amendments  in  the  framework  of  the  review  of  the 
Financial Regulation. A meeting between the Commission, the EDPS and the EP 
was held to this effect. The Commission considers that the Synthesis Report is not 
the  correct  instrument  to  report  on  the  monitoring  of  this  type  of  actions,  which 
result  could  be  presented,  if  necessary,  in  the  Annual  Activity  Report  of  each 
service. 

30. 

(European  Parliament,  §67)  The  EP  recalls  its  request  from  its  resolution  on 
discharge for the financial year 2008 to standardise the structure and presentation of 
beneficiaries’  data  on  national,  regional  and  international  sites,  including  details  of 
recipients and their projects 

Commission's response: 

The Commission considers that it is fulfilling the requirements of transparency as 
defined  in  Article  30  of  the  Financial  Regulation  (FR).  It  directly  publishes 
information  related  to  beneficiaries  of  EU  funds  that  it  implements  under 

EN 

23 

   EN 

 
31. 

centralised  management.  This  information  is  available  through  the  Financial 
Transparency System (FTS), a central online search engine. 

As  for  EU  funds  implemented  in  a  non-centralised  management  mode  by  the 
Commission implementing partners (Member States, third countries, international 
organisations,  etc.),  the  transparency  requirements  constitute  a  pre-condition  for 
the delegation of  implementation of  EU funds. The  Commission  considers that it 
should  remain  so,  as  they  are  the  best  positioned  to  have  full  and  reliable 
information regarding the beneficiaries of the funds they manage. 

Finally, a project to publish from one central database, detailed and standardised 
information on beneficiaries of EU funds under all management modes would be 
extremely  complex  and  costly  to  conduct,  not  only  in  terms  of  budget  but  also  in 
terms of human resources. 

(European Parliament, §68 and §69) The EP reiterates its belief that transparency is 
one of the main instruments in achieving legal and regular expenditure and believes 
that the objective should be the creation of a single and comprehensive online system 
(a  central  database)  which  can  be  accessed  easily  by  any  individual  and  would 
therefore allow the public to have easy access to full and complete information about 
the  expenditure  of  the  Union  by  budget  line  and  by  beneficiary;  insists  that  the 
Commission collect data regarding the beneficiaries of funds in that central database 
and make the data collected easily accessible and user-friendly; further requests that 
the data be published in a comparable, machine-readable, searchable and open data 
format  in  one  of  the  official  languages  of  the  Union.  The  EP  proposes,  in  order  to 
increase  transparency,  that  the  central  database  regarding  the  beneficiaries  of  funds 
shall  make  it  possible  to  visualise  not  only  money  flows  in  figures  but  also  the 
connections between the different actors in a project at different levels, whilst always 
taking into account the protection of privacy. 

Commission's response: 

The Commission considers that it is fulfilling the requirements of transparency as 
defined in Article 30 of the Financial Regulation (FR) and draws attention to the 
fact  that  transparency  must  be  balanced  against  limitations  imposed  by  personal 
data protection. 

The  Commission  directly  publishes  information  related  to  beneficiaries  of  EU 
funds that it implements under direct management. This information is available 
through Financial Transparency System (FTS), a central online search engine. 

As  for  EU  funds  implemented  indirectly  by  our  implementing  partners  (Member 
States,  third  countries,  international  organisations,  etc.),  the  Commission  has 
issued  the  relevant  instructions  for  standardisation  of  the  information  to  be 
presented  by  the  various  management  authorities  involved.  For  implementing 
partners,  the  transparency  requirements  constitute  a  pre-condition  for  the 
delegation  of  implementation  of  EU  funds.  The  Commission  considers  that  it 
should  remain  so,  as  they  are  the  best  positioned  to  have  full  and  reliable 
information  regarding  the  beneficiaries  of  the  funds  they  manage.  This  is 
the  publication  of  beneficiaries  under  shared 
particularly  relevant 

for 

EN 

24 

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management,  which  is  clearly  the  responsibility  of  Member  States.  A  further 
coordinated initiative is not envisaged at this point. 

EN 

25 

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Evaluations 

32. 

(European Parliament, §72) The EP calls on the Commission to review its systems 
for  evaluating  the  effectiveness  of  expenditure  programmes  to  assess  whether  they 
are adding value, delivering value for money, and achieving the objectives for which 
they  were  established;  insists  that  such  evaluations  should  be  both  conducted  and 
then  assessed  independently;  calls  therefore  for  independent  evaluations  to  be 
submitted to Parliament and its relevant committees for scrutiny 

Commission's response: 

The  Commission  has  a  comprehensive  framework  for  evaluation  of  EU  activities 
and  programmes.  In  this  framework,  evaluations  address  the  main  evaluation 
issues  including  effectiveness,  efficiency,  utility  and  EU  added  value.  Procedures 
target  full  transparency  and  objectivity.  These  include  the  generalised  use  of 
broadly composed steering groups and quality assessments, and the involvement of 
external consultants as well as external consultations, questionnaires and meetings 
of  stakeholders  as  a  regular  part  of  the  process.  Results  are  systematically 
disseminated  in  line  with  the  requirements  of  the  Financial  Regulation.  The 
Commission is committed to ensuring best practice in its evaluation activities. 

EN 

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Whistleblowers 

33. 

(European Parliament, §75) The EP calls on the Commission to review the briefing 
and training given to staff regarding 'Title II: Rights and Obligations of officials' of 
the Staff Regulations so as to ensure that all staff are fully conversant with its terms 
and  particularly  with  the  obligations  under  Article  22a(96)  (whistleblowing);  asks 
that  the  Commission  provide  details  to  Parliament's  competent  committee  of  the 
work undertaken in this area 

Commission's response: 

The Commission has instructed the external training contractor earlier this year to 
ensure  that  the  whistleblowing  rules  are  an  integral  part  of  the  "Ethics  and 
integrity" training given to newcomers. In addition, all newly recruited middle and 
senior  managers  are  given  a  briefing  concerning  the  obligations  incumbent  on 
staff, which includes the whistleblowing rules. 

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27 

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Reforms of the Staff Regulations of Officials of the EU 

34. 

(European Parliament, §79) The EP notes that the reputation of the Union is strongly 
influenced by the public perception of its civil service; notes that the last reform of 
the Staff Regulations did not adapt its provisions to a changed working environment 
nor lead to a remuneration policy that provides for equal pay for equal work; notes 
that  it  contains  out-dated  perks  and  benefits;  calls  on  the  Commission  to  present 
proposals for a comprehensive modernisation of the Staff Regulations, including the 
end of out-dated perks and benefits 

Commission's response: 

In  June  2011  the  Commission  took  note  of  a  draft  proposal  amending  the  Staff 
Regulations.  This  proposal  strikes  a  balance  between  the  necessary  drive  for 
efficiency and economies and the ability of the institutions to deliver their policies. 
This  proposal  foresees  the  adaptation  of  some  individuals  and  pecuniary  rights 
(retirement  age,  new  method  of  calculation  of  the  adjustment  of  salaries  and 
pensions,  the  annual  trip  home,  the  travel  days  and  travel  allowances,  etc).  In 
addition, this proposal also preserves the capacity of the Institutions to attract and 
retain  staff  of  the  highest  professional  competence  in  various  fields  of  expertise 
who are able to work in a multicultural and multilingual environment and who are 
ready to move and stay abroad with their families. 

This  proposal  complements  the  2004  civil  service  reform  that  made  the  EU  staff 
law  one  of  the  most  modern  of  its  time.  A  performance-oriented  and  merit-based 
new  career  structure,  a  new  contractual  status  for  personnel  fulfilling  non-core 
tasks,  a  reform  of  the  pension  system,  new  working  methods  and  family-friendly 
working conditions were just some of the numerous changes brought by the  first 
comprehensive reform of the European civil service law since 1968. 

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Agriculture and natural resources 

35. 

(European  Parliament,  §82)  The  EP  calls  upon  the  Commission  to  take  steps  to 
ensure that the reduction in the error rate becomes a trend that is maintained year-on-
year so as to ensure that the irregularities cease 

Commission's response: 

The  Commission  considers  that  the  reduction  in  the  error  rate  in  the  domain  of 
Agriculture can already be considered as a trend. In this sense, an error rate which 
over  the  recent  years  is  close  to  2%  confirms  the  overall  positive  assessment  of 
previous  years.  The  Commission  will  continue  its  efforts  to  reduce  the  error  rate 
below 2%. 

36. 

(European Parliament, §93) The EP expects the Commission’s evaluation report to 
consider the practice by MS of defining used farmland independently and illustrate it 
with examples 

Commission's response: 

Member  States  are  required  to  qualify  land  as  farmland  in  accordance  with  the 
relevant  EU  rules.  The  Commission  follows  up  cases  of  non  conformity  via  the 
clearance of accounts procedure. 

37. 

(European  Parliament,  §94)  The  EP  invites  the  Commission  to  improve  the 
reliability  and  completeness  of  the  data  recorded  in  the  Land  Parcel  Identification 
System and update regularly Parliament about the progress 

Commission's response: 

The requested action has been taken.  

The  Commission  is  on  a  continuing  basis  working,  together  with  the  Member 
States, on actions to improve the reliability of information in the LPIS-GIS. As of 
claim  year  2010,  Commission  Regulation  (EC)  No  146/2010  introduced  the 
requirement for Member States to perform a quality assessment of the LPIS-GIS 
on  an  annual  basis  according  to  pre-determined  procedures  and  to  report  on  the 
results and the actions envisaged to, where required, improve the situation. Whilst 
2010 is the first year, this exercise has already been helpful for Member States as 
regards identification of areas requiring attention. 

38. 

(European  Parliament,  §94)  The  EP  invites  the  Commission  to  take  proactive 
measures to ensure that all the IACS databases provide a reliable and full audit trail 
for  all  modifications  made,  paying  particular  attention  to  those  countries  known  to 
have a poor record  and update regularly Parliament about the progress 

Commission's response: 

The requested action has been taken.  

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Annex  I  to  Regulation  (EC)  No  885/2006,  as  part  of  the  accreditation  criteria, 
already  requires  that  information  regarding  documentary  evidence  of  the 
authorisation, accounting and payment of claims shall be available in the paying 
agency to ensure at all times a sufficiently detailed audit trail. These accreditation 
criteria are checked by the certification bodies on an annual basis. 

39. 

(European  Parliament,  §94)  The  EP  invites  the  Commission  to  clarify  and  further 
enforce the rules so that Union direct aid is not paid to claimants who have neither 
used the land for farming nor maintained it in Good Agricultural and Environmental 
Conditions  and update regularly Parliament about the progress 

Commission's response: 

The Commission is taking the requested action. 

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

In order to be eligible for SPS payments, areas should be used for an agricultural 
activity as defined in Regulation (EC) No 73/2009 which at least implies that they 
should  be  maintained  in  Good  agricultural  and  Environmental  condition.  The 
issue of maintenance of the areas is being looked into with a view to the reform of 
the  CAP  post  2013  as  stipulated  in  the  Commission  Communication  "The  CAP 
towards 2020: meeting the food, natural resources and territorial challenges of the 
future". 

40. 

(European Parliament, §94) The EP invites the Commission to review and improve 
the  guidelines  as  regards  the  work  to  be  performed  by  certification  bodies,  in 
particular  the  work  related  to  the  validation  of  the  Member  States'  control  and 
inspection statistics, and to provide Parliament with the number and an assessment of 
the soundness of the existing paying agencies  and update regularly Parliament about 
the progress 

Commission's response: 

The requested action has been taken. 

The Commission considers the overall structure and reporting requirements of the 
certification bodies to be appropriate. An assessment of paying agencies is already 
provided in DG AGRI's AAR on an annual basis. With regard to the work related 
to the control and inspection statistics, the Commission has already put forward a 
system  by  which  Member  States  can  reinforce  the  overall  framework  for  gaining 
reasonable assurance as to the legality and regularity of transactions at the level of 
the final beneficiary. 

41. 

(European  Parliament,  §94)  The  EP  invites  the  Commission  to  further  reduce 
bureaucracy, to simplify procedures and to avoid adverse effects on farmers arising 

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from  the  plethora  of  rules,  which  in  some  cases  conflict  and  update  regularly 
Parliament about the progress 

Commission's response: 

The Commission is taking the requested action.  

As of October 2010, a number of simplification related activities have been carried 
out. 

However,  the  Commission  will  continue  its  efforts  to  further  reduce  the 
administrative  burden  and  simplify  the  CAP.  This  objective  will  be  particularly 
pursued in the framework of the discussion on the CAP post-2013. 

42. 

(European Parliament, §95) The EP is of the opinion that the tripartite meetings of 
the Court of Auditors, the Commission and national authorities should be extended to 
the policy area of agriculture and natural resources in order to facilitate a harmonised 
interpretation and application of the rules regarding the management and control of 
expenditure,  as  well  as  a  coordinated  approach  between  the  Commission  and  the 
Court of Auditors 

Commission's response: 

The Commission is taking the requested action. 

DG AGRI will propose tripartite meetings when they are expected to facilitate the 
handling  of  individual  DAS  cases.  However,  the  realisation  of  such  meetings 
depends on the willingness of all parties involved. 

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31 

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Cohesion 

43. 

(European  Parliament,  §98)  The  EP  asks  the  Commission  to  work  decisively  to 
improve and overcome temporary flaws in the management and control systems 

Commission's response: 

The  Commission  is  continuously  taking  the  requested  action.  It  intends  to  take 
measures  to  that  effect  and  report  thereof  by  31/03/2013  in  the  next  Annual 
Activity Reports of the Directors General. 

The Commission focuses its audits on high risk programmes and takes appropriate 
actions, including interruptions and, if necessary, suspension of payments and/or 
financial corrections. Figures provided to the European Parliament show that the 
majority  of  corrections  are  concentrated  on  few  Member  States.  Furthermore,  it 
puts in place national remedial action plans aiming at improving the effectiveness 
of  systems  and  remedying  the  causes  of  low  performance  for  those  programmes 
and Member States which are concerned. 

As  indicated  in  the  Annual  Activity  Reports  for  2010,  the  emphasis  of  the 
reservations  lies  on  some  programmes  in  Member  States  (and  in  particular  in 
Spain and Italy as in a number of preceding exercises). Based on an analysis on 
the main reasons behind the problems in these Member States, a pilot programme 
with the Spanish authorities has been initiated for the ESF in March 2011 in order 
to endeavour to identify root causes and implement effective mitigating actions. In 
case  this  pilot  project  is  successful,  the  actions  may  be  extended  to  the  relevant 
programmes in Italy, too. 

44. 

(European  Parliament,  §105)  The  EP  asks  the  Commission  and  the  Court  of 
Auditors to set up a platform for the consultation process on methodology used with 
regard to the seriousness of the infringements detected in public procurement domain 

Commission's response: 

The Commission has taken the requested action. 

The  Commission  and  its  services  have  invited  the  Court  to  launch  such  a 
discussion on the quantification of errors in public procurement since 2010. While 
the assessment of errors in this area is usually the same between both institutions, 
the Court explained that its quantification of errors linked to public procurement is 
and will remain distinct from the quantification made by the Commission and the 
Member States to establish the necessary, appropriate and proportionate financial 
correction linked to such reported errors. 

45. 

(European Parliament, §107) The EP asks the Commission to analyse the reasons for 
infringements  of  public  procurement  rules  and  to  cooperate  decisively  with  the 
Member States to overcome the difficulties identified 

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32 

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Commission's response: 

The Commission is taking the requested action. It intends to take measures to that 
effect before 31/12/2012. 

In  the  Single  Market  Act  the  Commission  has  undertaken  to  put  forward 
proposals, by 2011. 

Simplification  will  be  one  of  the  main  drivers  of  the  forthcoming  revision  of  the 
Directives.  The  Commission  is  planning  to  issue  its  proposal  by  end-2011. 
Stakeholders  and  interested  parties  have  had  opportunity  to  contribute  to  this 
process  through  the  consultation  process  launched  with  the  Green  Paper  on  the 
modernization of EU public procurement policy.  

Moreover, the Commission has issued and discussed with the Member States in the 
Advisory Committee  on Public Procurement a report on more frequent errors on 
public procurement identified through EC audits and reasons for taking financial 
correction decisions linked to public procurement procedures (May 2011). Member 
States  were  alerted  about  these  recurrent  audit  findings  and  asked  to  share  good 
practices  and  proposals  to  overcome  such  recurrent  deficiencies.  This  initiative 
intends also to feed into the ongoing consultation on the simplification/revision of 
the Directives. 

46. 

(European  Parliament,  §108)  The  EP  calls  on  the  Council  and  the  Commission  to 
finalise  the  adoption  of  the  reform  of  the  basic  Union  public  procurement  rules 
(Directives 2004/17/EC and 2004/18/EC) by 2012 

Commission's response: 

Following the consultation launched with the Green Paper on the modernisation 
of EU public procurement policy, the Commission will make legislative proposals 
by  the  end  of  the  year,  with  a  view  to  simplifying  and  updating  the  European 
public procurement legislation. 

47. 

(European Parliament, §115) The EP calls on Commission DGs to further improve 
their guidance to the Member States and developing good practices among national 
bodies 

Commission's response: 

The Commission is taking the requested action. It intends to take measures to that 
effect and will report on actions taken in the 2011 Annual Activity Reports of the 
Directors General. 

For  the  2007-2013  period  the  Commission  has  made  a  significant  upfront 
investment  in  terms  of  guidance  (45  guidance  notes  have  been  discussed  and 
agreed with Member States), preventive training and support to the Member States. 
It will maintain its efforts in this respect, for example through the preparation of 
complementary guidance on annual control reports for the audit authorities, and 
takes note of the Parliament's request to intensify its efforts. It has also completed 
its guidance on financial engineering instruments in 2011. 

EN 

33 

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Nonetheless,  it  recalls  that  technical  assistance  monies  are  also  provided  to 
Member States for them to develop their administrative capacity. 

48. 

(European  Parliament,  §117)  The  EP  requests  the  Commission  to  identify  and 
spread  best  practices  amongst  the  Member  States  in  order  to  allow  an  increased 
absorption  of  funds  and  improved  beneficiary  cash-flow  by  amending  and 
simplifying the Structural Funds implementing regulations at national level 

Commission's response: 

The  Commission  is  continuously  taking  the  requested  action.  It  intends  to  report 
on  the  measures  taken  to  that  effect  in  the  next  Annual  Activity  Report  of  the 
Directors General. 

The Commission regularly organises meetings with Member States authorities for 
example  the  Committee  on  the  Coordination  of  structural  Funds  (COCOF)  or  at 
technical level like in the ESF Technical Working Group (TWG). The exchange of 
best practices on simplification measures and the implementation of the Funds are 
an essential part of those meetings. 

49. 

(European Parliament, §118) The EP calls on all stakeholders in the Member States 
and in the Union institutions to work together closely to deal with the phenomenon 
of organised and planned frauds in the Structural Funds 

Commission's response: 

The Commission is taking the requested action. It intends to take measures to that 
effect and to report in the next Annual Activity Reports of the Directors General. 

The  level  of  suspected  fraud  in  structural  funds  is  only  0,23%  of  the  Cohesion 
Policy budget. 

In  the  framework  of  their  Mutual  Understanding  agreement  DG  REGIO,  DG 
EMPL  and  OLAF  set  up  in  2008    a  Joint  Fraud  Prevention  Strategy  for  the 
European  Regional  Development  Fund  (ERDF),  the  European  Social  Fund 
(ESF), the Cohesion Fund (CF).The updated Strategy for 2010-2011 was adopted 
in  July  2010  by  DGs  REGIO,  EMPL,  MARE  and  OLAF.  It  foresees  several 
actions aimed at strengthening the capacity of these services to prevent fraud and 
to  deal  with  potential  cases  of  fraud  and  also  to  perform  analysis  of  fraud  types, 
root  causes  of  fraud  and  modus  operandi  of  fraudsters.  OLAF  established  a 
Regional  Risk  Assessment  for  one  Italian  region  falling  within  the  convergence 
objectives  and  carried  out  an  analysis  of  modus  operandi  of  fraudsters  in 
Structural  Funds  reflected  in  document  "Compendium  of  Common  cases  in  the 
field of Structural Funds". 

The  Strategy  document  is  reviewed  bi-annually.  Moreover,  the  Commission 
adopted  in  June  2011  an  anti-fraud  strategy  that  covers  the  whole  EU  budget 
(COM(2011) 376 final). The Commission intends to propose to Member States in 
the  next  programming  period  that  they  set  up  clear  frameworks  for  fraud 
prevention under cohesion policy, proportionate to the fraud risk assessments. 

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34 

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50. 

(European Parliament, §120) The EP invites the Commission to look, in connection 
with  the  revision  of  the  Financial  Regulation,  into  the  effectiveness  of  National 
Management  Declarations  as  incentives  and/or  deterrents  and  the  advantages  and 
improvements they could bring in terms of sound financial management 

Commission's response: 

The  Commission  services  have  issued  a  working  document  (SEC(2011)250) 
providing  an  analysis  of  national  declarations  in  the  assurance  process  on  the 
execution  of  the  EU  budget  in  shared  management.  The  study  contained  an 
evaluation of the national declarations currently issued by four Member States at 
political level and identified key criteria which could – if observed – add value to 
management  declarations.  The  management  declarations  of  assurance  proposed 
by  the  Commission  in  Art  56  of  its  proposal  for  the  triennial  revision  of  the 
Financial  Regulation,  adopted  in  May  2010  incorporate  these  criteria.  The 
Commission's proposal has been subject to inter-institutional discussion. 

In  the  Commission's  view,  the  management  declarations  proposed  would  provide 
the Commission with substantial additional assurance as to the use of EU funds by 
the 
Member  States  and  reinforce  cooperation  with  Member  States 
implementation  of  the  budget  by  underlining  their  control  and  audit  obligations 
stemming  from  the  Lisbon  Treaty  (Article  317  TFEU).  An  annual  management 
declaration  of  assurance  (complemented  by  and  subject  to  an  independent  audit 
opinion) signed by a senior national official would allow the relevant Commission 
managers to take full account of the underlying declarations in framing their own 
declarations of assurance in the DGs' Annual Activity Reports. This would result 
in  a  single  logical  assurance  chain  in  which  the  assurance  provided  is  derived 
directly  from  the  management  chain,  thereby  offering  greater  assurance.  A 
management declaration of assurance issued by local managers would also have a 
positive impact on the level of error as audit results show that the main causes of 
error can be traced to deficiencies in first level management verifications. 

in 

51. 

(European  Parliament,  §121)  The  EP  calls  upon  the  Commission  to  intensify  the 
contacts  with  the  Member  States’  administrations  for  the  purpose  of  a  mutual 
exchange of information to tackle pending questions without delay 

Commission's response: 

The Commission has taken the requested action. 

The  Commission  regularly  organizes  meetings  with  Member  States'  authorities 
such  as  the  Committee  on  the  Coordination  of  structural  Funds  (COCOF),  the 
ESF  Technical  Working  Group  (TWG)  or  regular  technical  meetings  of  audit 
authorities.  The  exchange  of  best  practices  on  simplification  measures,  sound 
financial management and the implementation of the Funds are an essential part 
of those meetings. The Commission services are in permanent, daily close contact 
with all programmes authorities. 

52. 

(European  Parliament,  §123)  The  EP  invites  the  Commission  to  include  in  the 
Financial Regulation a request for mandatory NMDs issued and signed at ministerial 

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level and duly audited by an independent auditor as a vital first step towards greater 
national accountability for Union expenditure 

Commission's response: 

The  Commission  has  proposed  the  introduction  of  mandatory  management 
declarations of assurance in Art 56 of its proposal for the triennial revision of the 
Financial  Regulation.  This  proposal  is  currently  subject  to  inter-institutional 
discussion. 

53. 

(European  Parliament,  §124)  The  EP  recalls  the  need  to  ensure  an  efficient 
implementation  of  regular,  tripartite  meetings  under  the  budgetary  procedure  as 
mentioned in Article 324 of the Treaty on the Functioning of the European Union 

Commission's response: 

The Commission, as it has done in the past, will continue to fully play its role as 
defined by Art 324 TFEU. 

54. 

(European Parliament, §125) The EP calls on the Commission to set up a working 
group  with  the  Member  States  to  prepare  uniform  auditing  standards  in  order  to 
further enhance the audit work of the certifying/auditing bodies 

Commission's response: 

The Commission has taken most of the requested action and will complete it by end 
2012 and report on its results in the 2011 Annual Activity Reports of the Directors 
General. 

The  Commission  prepared  and  discussed  with  the  Member  States  in  2008  a 
detailed and comprehensive guidance note on the certification function, providing 
practical information and best practice on the organisation and functioning of the 
certifying  authorities,  based  on  previous  experience.  Seminars  for  certifying 
authorities, based on this guidance note, were held in 2008, 2009 and 2010. 

The Commission notes that the certifying authorities are not audit bodies and are 
not functioning with auditing standards. The certification function does not aim at 
directly  auditing  expenditure  or  systems,  but  at  ensuring  that  only  legal,  regular 
and  eligible  expenditure  has  been  included  in  the  payment  claims  to  the 
Commission and to this view, that the underlying controls have been efficient. 

Moreover,  the  Commission  has  organised  a  technical  meeting  with  all  audit 
authorities  on  6  May  2011  as  a  follow-up  to  its  analysis  of  the  first  completed 
annual  control  reports  and  audit  opinions  for  2010.  Feedback  was  provided  on 
discrepancies in audit approaches and evaluation of audit results and reporting of 
error  rates.  Follow-up  will  be  provided  in  the  form  of  additional  guidance  to  be 
discussed again with audit authorities in October 2011 in the next meeting, on time 
for  the  next  annual  control  report  and  audit  opinion  to  be  issued  by  the  audit 
authorities  in  December  2011,  and  by  circulation  of  checklists  on  audits  on 
operations  used  by  the  Commission  to  help  and  enhance  the  methodology  of  the 
national audit authorities. 

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Finally,  individual  feedback  was  given  to  all  audit  authorities  through  the 
recommendations made by the Commission under the review of the most important 
audit  authorities,  and  in  the  2011  annual  control  coordination  meetings  with  all 
Member States and Funds. 

55. 

(European Parliament, §126) The EP calls on the Commission to provide Parliament 
with  the  number  and  an  assessment  of  the  soundness  of  the  existing  managing 
authorities 

Commission's response: 

The Commission has taken the requested action. 

The  number  of  existing  managing  authorities  for  Structural  and  Cohesion  Fund 
programmes/projects  for  the  2007-2013  programming  period  is  280.  Managing 
authorities are assisted by hundreds of intermediate bodies. 

The functioning of the managing authorities and of selected intermediate bodies is 
verified by Commission auditors in the framework of their audits on the national 
managing and control systems on a risk basis, and by national audit authorities on 
an  annual  basis.  This  is  reflected  in  the  Structural  Funds  DGs'  Annual  Activity 
Reports for 2010, where the disclosure of information on the  assurance  level per 
operational programme and per Member State has been significantly improved. 

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Research, energy and transport 

56. 

(European Parliament, §132) The EP recalls that FP6 beneficiaries' cost statements 
submitted for reimbursement shall be accompanied by an audit certificate issued by 
an independent auditor certifying reasonable assurance that the declared costs meet 
the  eligibility  requirements;  draws  attention  to  the  fact  that,  by  the  Commission’s 
own  admission,  the  acceptability  criteria  adopted  for  obtaining  certification  are  too 
restrictive 

Commission's response: 

This recommendation addresses two different issues. The "restrictive" criteria only 
concern the FP7 ex-ante cost methodology certification of average personnel costs 
while the issue of the 'audit certificate issued by an independent auditor certifying 
reasonable  assurance  that  the  declared  costs  meet  the  eligibility  requirements' 
relates to the FP6 ex-ante certification of cost claims. Further, the procedures are 
different for each exercise: under FP7 beneficiaries submit an application for cost 
methodology certification, which is subject to the Commission's approval. Once the 
certificate is accepted, it is valid for the whole programme. Ex-post audits, if any, 
will be aimed at verifying whether the certified methodology was used.  Under FP6, 
audit  certificates  were  requested  to  support  the  financial  statements  to  give 
reasonable assurance of the eligibility of the costs claims; ex-post audits will verify 
once more whether the costs claimed fulfilled the eligibility criteria. 

As regards the cost methodology certification, the Commission has recognised that 
the  acceptability  criteria  for  receiving  certification  of  the  costing  methodologies 
are too stringent for most beneficiaries. 

introduced  by 

However,  substantial  simplification  has  been  already 
the 
Commission to facilitate the use of average personnel costs by beneficiaries within 
the overall existing legal framework. In this respect, following the Communication 
on  simplifying  the  implementation  of  the  Research  Framework  Programmes 
(COM  (2010)  187  final  of  29.04.2010)  the  Commission  adopted  a  Decision  of  24 
January  2011  (C(2011)  174  final)  on  three  measures  for  simplifying  the 
implementation of the framework programme. This decision allows beneficiaries to 
apply their usual accounting methods when requesting reimbursement for average 
personnel costs. 

Furthermore,  the  experience  with  ex-ante  certification  of  cost  methodologies  will 
be  taken  into  account  in  the  preparation  of  the  rules  for  the  next  funding 
programme. 

57. 

(European Parliament, §136 part 1) The EP invites  the Commission to ensure that 
the  independent  auditors  who  have  incorrectly  certified  cost  statements  are  made 
aware of the eligibility criteria for declared costs and if applicable held accountable. 
The  EP  invites  the  Commission  to  review  the  operation  of  the  system  for  the 
certification of beneficiaries' costing methodologies 

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Commission's response: 

A  formal  feedback  process  is  in  place  to  urge  the  audited  beneficiaries  to  make 
their  certifying  auditors  aware  of  the  Commission's  audit  findings  and  also 
referring  them  to  the  relevant  information  where  the  eligibility  requirements  and 
interpretations are publicly available. 

The  decision  on  simplification  adopted  on  24  January  2011  has  simplified  the 
costing methodologies certification: in respect of average personnel costs, the new 
acceptability  criteria  may  accommodate  more  methodologies.  As  regards  the 
system for certification, the Commission's experience will be taken into account in 
the preparation of the rules for the next funding programme. 

58. 

(European  Parliament,  §136  part  2)  The  EP  invites  the  Commission  to  reduce  the 
backlog in recovering undue amounts paid and to impose sanctions where necessary 

Commission's response: 

The Commission is continuously monitoring the procedures for recovering undue 
amounts  paid.  In  this  respect,  the  Commission  has  considerably  improved  this 
aspect of the FP management. For example concerning FP6 in DG RTD - despite 
the completion of audits which added €13 millio n to the amount to be recovered in 
2010 - the percentage of total adjustments in favour of the EU effectively recovered 
has grown from 30,40% in 2008 to 55,61% in 2009 and to 67,87% by the end of 
2010. 

The communication on the simplification of the recovery process in the framework 
of  the  implementation  of  the  audit  strategy  adopted  on  15  December  2009  will 
contribute to a better management of outstanding recoverable amounts. 

The  Commission  has  continued  to  systematically  apply  liquidated  damages  on 
beneficiaries  which  had  over  declared  their  costs.  As  an  example,  by  the  end  of 
2010, RTD had considered the application of liquidated damages in a total of 584 
cases and had applied liquidated damages for a total of € 0,7 million. 

59. 

(European  Parliament,  §136  part  3)  The  EP  invites  the  Commission  to  further 
simplify  the  research  funding  rules,  to  significantly  improve  access  to  research 
funding  for  SMEs  and  to  ensure  full  accountability  for  the  proper  use  of  Union 
money 

Commission's response: 

The Commission is currently working on the preparation of the next Framework 
Programme  for  Research  and  Innovation.  In  this  context,  the  Commission  will 
present  to  the  European  Parliament  and  to  the  Council  a  proposal  where  the 
aspects highlighted by the Parliament will be addressed. 

Nevertheless, following the Communication on simplifying the implementation of 
the Research Framework Programmes (COM (2010) 187 final of 29.04.2010) the 
Commission adopted a Decision of 24 January 2011 (C(2011) 174 final)  on three 
measures for simplifying the implementation of the framework programme. One of 

EN 

39 

   EN 

 
them is related to the SMEs, (chapter two on financing of SMEs owners and other 
natural persons not receiving a salary). SMEs and natural persons participating in 
a  FP7  project  have  now  the  possibility  to  charge  personnel  costs  corresponding 
respectively  to  the  work  performed  by  a  SME-owner  or  natural  persons  not 
receiving a salary on the basis of a flat-rate. 

60. 

(European  Parliament,  §  137)  The  EP  reiterates  its  call  on  the  Commission  to 
provide  legal  certainty  by  refraining  from applying  a  stricter  definition  of  the  rules 
for participation retroactively and by refraining from asking recipients to recalculate 
financial  statements  already  approved  by  Commission  services,  hence  reducing  the 
need for ex-post audits and retroactive corrections; asks the Commission rapidly to 
resolve prior situations arising from inspections in progress, acting with discernment 
and  respect  for  the  principles  of  sound  financial  management;  recommends  that 
disputes regarding such prior situations be resolved by agreement between all parties, 
based for example on an independent re-audit and/or with the intervention of an ad-
hoc independent mediator 

Commission's response: 

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

This control strategy responds to the Parliament's concern that the annual DAS on 
research  spending  consistently  reveals  a  material  level  of  error  in  payments  to 
beneficiaries and in the Commission's supervisory and control systems, which do 
not  sufficiently  mitigate  the  inherent  risk  of  reimbursement  of  overstated  costs. 
The corrections proposed by the Commission do not result from the application of 
new  interpretations,  but  from  the  audit  of  cost  statements  submitted  by 
beneficiaries. Such audits merely verify compliance with the legal and regulatory 
framework.  Also  "refraining  from  making  any  retroactive  changes"  would  mean 
that  amounts  receivable  would  not  be  recovered.  Moreover,  the  possibility  of 
performing 
the  Commission 
Communication of 15 December 2009 - SEC(2009)1720. 

counter-audits 

independent 

exists 

since 

Further,  the  Commission  has  also  re-assessed  the  eligibility  of  several  taxes  or 
charges related to personnel costs, which gave rise to contestations. The additional 
eligibility criteria are also listed in the Communication of 15 December 2009, they 
are applicable to FP6 and FP7. 

Moreover,  the  decision  on  the  simplification  measures  will  have  a  significant 
impact on the acceptance of personnel costs since beneficiaries are now allowed to 
charge  average  personnel  costs  according  to  their  own  accounting  practices  and 
SME-owners and natural persons who do not receive a salary have the possibility 
to  charge  costs  on  the  project  on  the  basis  of  a  flat-rate.  Ex-post  audits  will  be 
carried out accordingly. 

EN 

40 

   EN 

 
61. 

(European Parliament, § 139) The EP invites the Commission to ensure that the IAS 
exercises  the  same  powers  over  the  bodies  set  up  by  the  Union  having  a  legal 
personality and receiving contributions from the budget (Joint Undertakings) as those 
which it exercises over Commission departments, in accordance with Article 185(3) 
of the Financial Regulation 

Commission's response: 

The  IAS  contacted  all  JUs  in  December  2010  to  inform  them  of  the  authority 
invested by article 185 of FR on the internal auditor of the Commission in relation 
to those entities. The IAS has sent all of them audit charters and carried out risk 
assessments. Actual audit engagements will start in 2012. 

62. 

(European  Parliament,  §140)  FP8  should  be  based  on  a  radical  change  of  view 
including  the  introduction  of  a  bonus  system  partially  replacing  the  current  upfront 
payment system and better access to venture capital in order to enhance efficiency 

Commission's response: 

The Commission is currently working on the preparation of the next Framework 
Programme  for  Research  and  Innovation.  In  this  context,  the  Commission  will 
present  to  the  European  Parliament  and  to  the  Council  a  proposal  where  the 
aspects highlighted by the Parliament will be properly addressed. 

This  proposal  will  also  include  future  financial  instruments  for  research  and 
innovation  aiming  at  improving  access  to  risk  capital  (Equity  and  Debt  finance). 
Furthermore,  an  integrated  support  scheme  might  be  proposed  aiming  at 
connecting  EU  grant  funding  with  risk  capital  finance  in  order  to  better  support 
the transfer of Research and Development results to the market. 

EN 

41 

   EN 

 
External aid, Development and Enlargement 

63. 

(European  Parliament,  §147,  §148  and  §149)  The  EP  asks  the  Commission  to 
cooperate  with  candidate  and  potential  candidate  countries  in  order  to  improve 
management and control systems, to promote best practices for fighting fraud, and to 
ensure that their practices are in conformity with all Union rules and standards. The 
EP  invites  the  Commission  to  provide  all  potential  candidate  countries  with  the 
necessary know-how and institutional knowledge to efficiently fight corruption and 
continue the reforms needed. 

The EP also invites the Commission and candidate countries to improve dialogue and 
ensure effective cooperation (in the framework of Commission's ex ante controls) 

Commission's response: 

Concerning the first part of the point, it has been considered for this reply that the 
concept  of  verification  mission  relates  to  the  activities  to  be  performed  in  the 
context of the conferral of management and the waiver of ex-ante controls in the 
candidate countries benefiting of the instrument of pre-accession assistance (IPA). 

DG  ELARG  has  harmonised  and  compiled  into  a  coherent  body  the  full  set  of 
instructions providing guidance for the process of conferral of management earlier 
published. 

instruction  clarifies 

This  global 
the  roles  and 
responsibilities  of  the  different  actors  and  the  steps  to  be  taken  at  the  different 
stages of the process. 

the  concepts,  describes 

It can be used both for the preparation of new conferral of management decisions 
as well for the monitoring of those currently in force. 

Concerning  the  necessary  know-how  and  the  institutional  knowledge  provided  to 
efficiently fight corruption, the contribution of the Commission, through CARDS- 
and IPA-funded projects has been the following: 

ALBANIA:  

A total number of 53 projects have been carried out under CARDS and IPA in the 
areas  of  justice  and  anti-corruption.  In  the  area  of  judicial  reform,  the  EU  has 
allocated  €  30,6  million  under  the  CARDS   programme  and  €  18,3  million  under 
IPA  2007-2010.  To  date,  €  28,2  million  has  be en  disbursed  under  CARDS  and  € 
2,5 million under IPA. Domestic co-financing is foreseen to amount € 1,5 million. 
The  EU  allocated  €  0,6  million  unde r  the  CARDS  programme  and  €  2  million 
under  IPA  2007-2010  in  the  area  of  preventing,  monitoring  and  combating 
corruption.  To  date,  €  0,5  million  has  been  disbursed  under  CARDS  and  €  1,2 
million under IPA. Domestic co-financing is foreseen to amount € 0,1 million. 

BOSNIA AND HERZEGOVINA: 

A total of 62 projects on judicial reform and fighting corruption have been carried 
out under CARDS and IPA. In the area of reform of the judicial systems, the EU 

EN 

42 

   EN 

 
 
has allocated € 30,2 million under the CARDS programme 2002-2006 and € 24,2 
million  under  IPA  2007-2010.  To  date,  €  28,9   million  has  been  disbursed  under 
CARDS and € 8,3 million under IPA. Domestic co-financing is foreseen to amount 
€ 6,45 million, which concerns the project "Support to the construction of a State 
high-security Prison in Bosnia and Herzegovina". The EU has allocated € 177.750 
under the CARDS programme 2002-2006 and € 3,9 million under IPA 2007-2010 
in  the  area  of  preventing,  monitoring  and  combating  corruption.  To  date, 
approximately € 134.000 has been disbursed under CARDS and € 635.000 under 
IPA. 

KOSOVO: 

A total number of 13 projects in the areas of justice and anti-corruption have been 
carried out under CARDS and IPA. In the area of reform of the judicial systems, 
the EU has allocated € 5,2 million under  the CARDS programme and € 39 million 
under  IPA  2007-2010.  To  date,  €  4,8  millio n  has  been  disbursed  under  CARDS 
and  €  4,1  million  under  IPA.  The  EU  a llocated € 1 million under the IPA 2007-
2010 in the area of preventing, monitoring and combating corruption. To date, € 
650.000  has  been  disbursed  under  IPA.  Domestic  co-financing  is  foreseen  to 
amount € 14,4 million. 

MONTENEGRO: 

A total of 10 projects on judicial reform and fighting corruption have been carried 
out  in  Montenegro  under  CARDS  and  IPA.  The  total  pre-accession  funds 
allocated to the projects in the area of judiciary reform in Montenegro amount to 
approximately € 412.000 under CARDS and € 
3,4 million under IPA. To date € 4,7 
million  has  been  disbursed  to  the  beneficiaries.  The  total  estimated  national  co-
financing to the projects in this area amounts to € 50.000. The projects in the area 
of  preventing,  monitoring  and  combating  corruption  in  Montenegro  amount  to  € 
2,6  million  under  IPA.  To  date,  €  1,7  million  has  been  disbursed  to  the 
beneficiaries in this area. The total estimated national co-financing to the projects 
in this area amounts to approximately € 131.900. 

SERBIA: 

A total of 23 projects on judicial reform and fighting corruption have been carried 
out  in  Serbia  under  CARDS  and  IPA.  In  the  area  of  judicial  reform,  the  EU 
allocated  €  5,3  million  under  the  CARDS  programme  and  €  19,5  million  under 
IPA  2007-2010.  To  date,  €  3,5  million  has  been  disbursed  under  IPA.  The  EU 
allocated € 1,3 million under the CARDS  programme and € 2,4 million under IPA 
2007-2010  in  the  area  of  preventing,  monitoring  and  combating  corruption.  No 
domestic co-financing is foreseen in these areas. 

MULTI-BENEFICIARY COUNTRIES: 

4 multi-beneficiaries projects on judicial reform and fighting corruption have been 
prepared / carried out under CARDS and IPA. The EU allocated 2,8 million EUR 
under the CARDS programme and 5 million EUR under IPA 2007-2010. To date, 
2,5  million  EUR  have  been  disbursed  under  CARDS.  Co-financing  by  the  grant 

EN 

43 

   EN 

 
beneficiary  /  contractor  for  the  three  CARDS  projects  is  foreseen  in  the  amount 
10%.  

Main projects carried out include the "Assessment of Corruption and Crime in the 
Western Balkan" project and the project "Strengthening the prosecutors' network 
in the fight against organised crime and corruption". 

64. 

(European  Parliament,  §151)  The  EP  invites  the  Commission  to  give  greater 
attention to and derive full benefit from the follow-up of weaknesses revealed by its 
audits on implementing partners and monitoring the extent of the use of humanitarian 
procurement centres 

Commission's response: 

The Commission is taking the requested action in respect of: 

- On the use of the Humanitarian Procurement Centres (HPC): The HPC is just a 
tool  offered  to  DG  ECHO  partners  to  ease  their  procurement.  For  the  2010 
reporting exercise, launched  in  November 2010, the letter to  HPC  requesting  the 
annual documentation also requested statistical information on the orders invoiced 
to  DG  ECHO  Partners  in  the  course  of  2009.  In  addition,  the  HPCs  have  been 
informed  of  the  Commission's  commitment  to  increase  monitoring  of  the  use  of 
HPCs  by  DG  ECHO's  Partners.  Finally,  DG  ECHO  has  initiated  measures  to 
better inform partners of the need to ensure that the reference number of the DG 
ECHO-funded Action appears on the invoice issued by the HPC and will continue 
enhancing  the  information  provided  to  partners  on  their  working  relations  with 
HPC, with an emphasis on early procurement planning. These actions will permit 
end  of  2011  to  have  first  indications,  quantitative  and  qualitative,  for  further 
follow-up. 

- DG ECHO ensures a systematic follow up of the audit recommendations at each 
next audit visit of a partner be it at field or HQ level (every 2 to 4 years). A further 
reinforcement of this  follow-up procedure will be a burdensome for our partners 
and of limited value. 

65. 

(European  Parliament,  §152)  The  EP  invites  the  successor  of  DG  RELEX  to 
complete 
related 
its  ex-post  control  methodology  and  promptly  address 
recommendations made by the internal auditor 

Commission's response: 

The  methodology  for  ex-post  controls  has  been  completed  and  will  be  further 
improved  throughout  2011  based  on  experience  gained  from  carrying  out  the 
controls. All related recommendations made by the internal auditor are considered 
to be implemented. 

66. 

(European  Parliament,  §153)  The  EP  invites  DG  ELARG  to  develop  and  put  in 
place  mechanisms  to  facilitate  the  analysis  and  follow-up  of  the  results  of  the 
verification  missions  and  to  devote  sufficient  resources  to  the  analysis  of  the 
outstanding  final  declarations  submitted  by  the  Member  States  that  have  recently 
joined the Union 

EN 

44 

   EN 

 
Commission's response: 

The concept of verification mission relates to the activities to be performed in the 
context of the conferral of management and the waiver of ex-ante controls in the 
candidate countries benefiting of the instrument of pre-accession assistance (IPA), 
not to the Cooperation and Verification Mechanism. 

DG  ELARG  has  harmonised  and  compiled  into  a  coherent  body  the  full  set  of 
instructions providing guidance for the process of conferral of management earlier 
published. 

instruction  clarifies 

This  global 
the  roles  and 
responsibilities  of  the  different  actors  and  the  steps  to  be  taken  at  the  different 
stages of the process. 

the  concepts,  describes 

It can be used both for the preparation of new conferral of management decisions 
as well for the monitoring of those currently in force. 

The analysis of final declarations remain a priority for DG ELARG, and the Court 
of  Auditors  has  already  noted  in  2009  significant  improvement  in  processing  the 
files, and the efforts have been continued since. 

67. 

(European Parliament, §154) The EP invites DG ECHO to improve the assessments 
of  the  proposals'  documentation  for  humanitarian  aid  actions  (such  as  the 
introduction of standardised evaluation reports) and to report on its experience with 
the implementation of the Food Facility in its Annual Activity Report for 2010 

Commission's response: 

The Commission is taking the requested action. It intends to take measures to that 
effect  before  the  31/12/2011.  The  Commission  has  launched  a  working  group  on 
the  assessment  of  humanitarian  aid  proposals  in  early  February  2011.  It  is 
harmonising  and  streamlining  the  documentation  of  the  assessment  process  by 
giving  a  better  overview  of  the  entire  process  throughout  a  dashboard  and 
establishing common assessment criterion. Its conclusions will be validated by the 
management and implemented as from 1 January 2012. 

Main  figures  on  the  implementation  of  the  Food  Facility  are  included  in  the 
Europe  Aid  Co-operation  Office  Annual  Activity  Report  for  2010.  More  detailed 
information  on  the  implementation  of  the  Food  Facility  is  available  in  the  2011 
Annual  Report  on  the  European  Union's  development  and  external  assistance 
policies on EuropeAid website:  

http://ec.europa.eu/europeaid/multimedia/publications/documents/annual-
reports/2011/europeaid_annual_report_2011_en.pdf. 

68. 

(European Parliament, §156) The EP asks the Commission to provide evidence that 
the money spent to support candidate countries has been used effectively and to state 
whether  improved  control  mechanisms  have  actually  led  to  increased  sanctions 
against corrupt actors, including in high-profile cases, whether laws are implemented 
fully and whether reforms are sustained 

EN 

45 

   EN 

 
Commission's response: 

Corruption,  conflicts  of  interest  and  other  bad  practices  are  now  being  tackled 
seriously but have not been eradicated yet and hence still must be considered to be 
a  problem,  but  overall,  it  can  be  considered  that  there  is  visible  and  steady 
progress. 

Generally,  the  legal  framework  has  progressively  been  put  in  place  and  the 
renewed  institutions  and  systems  established  and  becoming  operational.  Most  of 
the  legal,  judicial  and  administrative  structures  are  now  fully  tested  in  daily 
practice,  as  the  examples  underneath  will  show.  These  examples  indeed  indicate 
that  that  a  culture  of  political  accountability  is  emerging  through  recent  judicial 
initiatives taken in the beneficiary countries. 

In  the  Former  Yugoslavian  Republic  of  Macedonia  three  large-scale  police 
operations  were  carried  out  in  2010,  leading  to  the  arrest  of  numerous  border 
police  officers,  doctors  and  officials  from  the  Pension  and  Disability  Insurance 
Fund. Prison sentences were imposed on some of the defendants in first-instance 
court-decisions.  For  the  others  the  investigation  or  the  court  proceedings  are 
ongoing.  More  recently, the State Anti-Corruption Commission initiated criminal 
procedures against six current or former holders of public posts on suspicion that 
they  have  misused  their  positions.  One  of  them  is  the  former  director  of  the 
National Agency for European Educational Programmes and Mobility. Last year, 
the  European  Commission  stopped  all  programmes  that  the  Agency  was 
implementing  with  EU  funds  after  it  had  been  established  that  the  director 
distributed funds in a contentious manner. 

In  Croatia,  the  former  Prime  Minister  Sanader  was  arrested  on  suspicions  of 
corruption after USKOK, the local anti-corruption enforcement  service  requested 
Parliament to lift Sanader's immunity as MP so that he could be arrested and put 
in imprisonment while awaiting trial.  

In  Albania,  the  former  Prime  Minister  Meta  resigned  as  minister  of  Economy, 
Trade and Energy on 14 January 2011 following the publication of a video, filmed 
secretly  in  March  2010,  where  he  is  shown  pressuring  the  then  Minister  of 
Economy,  Trade  and  Energy,  Dritan  Prifti,  to  fix  the  tender  for  a  hydroelectric 
power  plant,  in  return  for  which  both  Prifti  and  Meta  would  benefit  financially. 
Meta actually resigned from his position of Deputy PM and Minister freely, to be 
able to address justice -as applicable - as an ordinary citizen. 

Last but not least, concerning Serbia, the arrest of former General Mladic and his 
transfer for trial to the ICT in The Hague, even if less linked to corruption facts, is 
worth being mentioned as well. 

These  examples  show  that  the  awareness  about  good  governance  is  now  well 
present  in  the  Candidate  Countries,  that  the  money  spent  to  support  candidate 
countries  has  been  used  effectively  and  that  improved  control  mechanisms  have 
actually led to increased sanctions against corrupt actors, including in high-profile 
cases, that laws are implemented fully and reforms sustained. 

EN 

46 

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69. 

(European Parliament, §157) The EP asks the Commission to report on all measures 
taken  to  address  the  weaknesses  identified  by  the  Court  of  Auditors  in  the 
decentralised  implementation  system  (DIS)  in  Croatia  and  Turkey;  and  to  provide 
estimates of the amount of expenditure at risk 

Commission's response: 

Concerning  Turkey  (and  to  a  similar  extent  Croatia)  the  Commission  considers 
that  it  has  fulfilled  the  recommendation  as  it  set  up  the  following  action  plan  in 
2010 to address the weaknesses identified by the Court: 

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

2. The Commission is taking steps to follow up the recommendations of last year’s 
IPA conference and the December 2010 Council conclusions on IPA to better link 
financial assistance to political priorities. 

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

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

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

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

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

Based  on  the  latest  discussions,  the  Commission  estimates  that  an  amount  of 
around 50 million euros is at serious risk in 2011 of not being contracted and paid 
in  time  before  the  expiry  of  deadlines,  which  would  mean  that  these  funds  are 
decommitted, i.e. no longer available to Turkey. 

Moreover, the Commission has just adopted at the Joint Monitoring Committee on 
5 July a comprehensive reform of the monitoring system in Turkey. 

70. 

(European Parliament, §158) The EP asks DG ELARG to step up its efforts to deal 
with the final declarations for the PHARE programme, the CARDS programme, and 
the transition facility and to proceed with the closure of these programmes prudently 
and in a timely manner 

EN 

47 

   EN 

 
Commission's response: 

In its draft report of 2010, the Court of Auditors has welcomed the efforts made by 
DG ELARG, however noting that the backlog has been reduced only partially. The 
Commission considers that the backlog has been further considerably reduced in 
2010, more then compensating the slight slowdown observed in 2009. 

71. 

(European Parliament, §161) The EP invites the Commission to inform international 
organisations that future Union assistance will be subject to the delivery of assurance 
evidence in the form of a statement of assurance 

Commission's response: 

The  Commission  already  has  a  satisfactory  assurance  mechanism  to  establish 
whether  international  organisations'  key  control  systems  meet  international 
the  Financial  Regulation,  International 
standards.  In  accordance  with 
Organisations  are  subject  to  a  compliance  assessment  prior  to  proceeding  with 
joint management. In addition, verification missions of projects are conducted on 
the basis of a risk analysis. As in practice a declaration of assurance would not be 
limited to EU fundings, it would not bring substantial added value. 

EN 

48 

   EN 

 
Education and Citizenship 

72. 

(European  Parliament,  §168)  The  EP  invites  the  Commission  to  continue  to 
reinforce the checks on closures to ensure that errors are detected and corrected and 
prevent the reoccurrence of previously identified errors 

Commission's response: 

As  mentioned  in  the  Commission's  reply  in  the  2009  ECA  Annual  Report:  the 
Commission considers that the supervisory and control systems put in place for the 
2007-2013 period provide for a sound framework. 

The  improvements  of  the  systems  in  the  area  of  Education  and  Culture  made  in 
2009  (updated  guidance  for  the  National  Authorities  and  reinforced  on  the  spot 
audit visits) are not reflected as the Court focussed on closure payments related to 
actions  from  the  previous  programme  generation  that  were  not  covered  by  the 
current  system  (notably  the  audited  actions  related  to  the  2004/5  and  2005/6 
academic years). 

The  Commission  emphasises  that  its  closure  in  2009  of  projects  from  2004/05  is 
normal procedure. The longest of these projects ended in 2008 and were submitted 
for  closure  by  the  National  Agencies  in  the  annual  report  2008,  which  the 
Commission received in 2009. 

EN 

49 

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Economic and Financial Affairs 

73. 

(European Parliament, §176) The EP invites the Commission to look at the existing 
arrangements for ex-ante verification, with a view to establishing how effective they 
are 

Commission's response: 

The  checklists,  accomplishing  each  transaction  in  DG  ENTR,  are  developed  and 
reviewed by the Authorising Officer by Delegation and embrace all the necessary 
checks corresponding to the level of risk. The weaknesses found by the Court (e.g. 
not, or incorrectly, ticked boxes on the checklists) have no negative impact on the 
effectiveness  of  the  supervisory  and  control  systems.  The  percentage  of  the 
incorrectly  ticked  boxes  is  extremely  small  on  the  basis  of  all  ticked  boxes.  This 
had no material impact on the payments. 

Nevertheless,  following  the  Court's  observations,  DG  ENTR  has  reviewed  and 
improved  all  its  checklists  for  ex-ante  control  of  interim  and  final  payments  and 
reminded  all  staff  participating  in  workflows  to  ensure  that  all  checklists  are 
comprehensibly filled after checks have been made. 

The Commission considers that the control systems in place are cost-efficient and 
proportional  to  ensure  consistent  application  of  the  financial  circuits  and  the 
legality and regularity of the transaction. 

74. 

(European  Parliament,  §176)  The  EP  invites  the  Commission  to  consider,  in  the 
light of experience, whether the use of certification by an external auditor appointed 
by  the  beneficiary  is  an  effective  control,  and  to  look  into  alternative  methods  of 
verification 

Commission's response: 

Ex-ante  certification  of  cost  claims  by  the  beneficiaries'  auditors  was  first 
introduced under FP6. Experience has shown that, although FP6 audit certificates 
did  not  provide  the  assurance  initially  expected,  this  ex-ante  control  made  a 
substantial contribution in reducing FP6 error rates compared with FP5 as it was 
recognised by the Court in previous reports. 

Further  to  the  observations  from  the  Court  and  the  past  requests  from  the 
Parliament and the Council the Commission has taken remedial action to improve 
the  quality  of  the  audit  certificates  in  FP7.  FP7  audit  certification  is  based  on 
"agreed  upon  procedures",  which  require  the  certifying  auditor  to  perform  pre-
defined procedures and report on that basis factual findings (as opposed to merely 
providing an opinion on the eligibility of cost claims as under FP6). This approach 
should lead to a reduction in errors of interpretation of the eligibility rules by the 
auditors.  Within  DG  Research  a  mid  term  review  of  this  novel  cost  claim 
certification  system  was  carried  out  recently  based  largely  on  a  survey  of  the 
authorizing  departments'  experience.  The  first  results  on  the  system  of  “agreed 
upon  procedures”  are  positive.  Although  to  date  take  up  rates  for  both  types  of 

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methodology  certificates  have  been  very  low,  a  similar  kind  of  review  is  being 
considered at the moment for the methodology certification system. 

The Commission is currently working on the preparation of the next Framework 
Programme  for  Research  and  Innovation.  A  key  enabler  to  improve  the 
effectiveness  of  audit  certification  is  to  simplify  the  rules  underpinning  the 
eligibility of cost claims submitted by beneficiaries. Simplification is catered for as 
a general concern for the future research and innovation programme. 

75. 

(European Parliament, §176) The EP invites the Commission to raise the certifying 
auditors'  awareness  of  expenditure  eligibility  rules  to  improve  the  reliability  of  the 
audit certificates they issue, and, if applicable, holding such auditors accountable. 

Commission's response: 

This  recommendation  largely  derives  from  the  Court's  findings  on  FP6  audit 
certificates. Further to the observations from the Court and the past requests from 
the  Parliament  and  the  Council  the  Commission  has  taken  remedial  action  to 
improve  the  quality  and  reliability  of  audit  certificates  in  FP7  by  introducing  an 
approach based "agreed upon procedures" (see reply to the previous request). The 
Commission has also implemented measures to reinforce the effectiveness of audit 
certificates  by  improving  support  to  certifying  entities  through  participation  in 
workshops  and  training  courses,  addressed  towards  beneficiaries  as  well  as 
operational  services  within  the  Commission.  Exhaustive  Guidance  Notes  for 
auditors and beneficiaries on FP7 audit certificates are available on CORDIS and 
regularly  updated  with  the  feedback  from  users.  Finally,  the  Commission's 
information approach is largely based on publication of guidance and information 
through CORDIS, the functioning of the "Research Enquiry Service" and the role 
of FP7 National Contact points for legal and financial issues. Moreover, a formal 
feedback  process  is  currently  in  place  to  urge  those  beneficiaries  who  have  been 
audited  by  the  Commission  to  make  their  certifying  auditors  aware  of  the 
Commission's  audit  findings  and  also  referring  them  to  the  relevant  information 
where  the  eligibility  requirements  and  interpretations  are  publicly  available.  The 
certifying auditors are accountable under prevailing professional obligations. 

76. 

(European Parliament, §176) The EP invites the Commission to further improve the 
quality  of  its  ex-ante  controls  on  the  procurement  procedures  and  interim/final 
payments  and  ensure  that  ex-post  controls  functions  are  covered  by  work 
programmes 

Commission's response: 

The weaknesses noted by the Court with regard to the interim and final payments 
were  related  to  the  design  and  filling  of  checklists.  DG  ENTR  has  reviewed  and 
improved all its checklists for procurement and ex-ante control of interim and final 
payments  and  reminded  to  all  staff  participating  in  workflows  to  ensure  that  all 
checklists are comprehensibly filled after checks have been made. 

The  recommendation  concerning  lack  of  work  programme  regarding  ex-post 
controls  relates  to  a  finding  of  the  Court  for  the  year  2009  in  policy  area  01-
Economic  and  Financial  Affairs.  The  delay  in  formalising  the  work  programme 

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for  2009  was  acknowledged  at  the  time.  However,  this  programme  was  largely 
defined and agreed by DG ECFIN's Internal Control Management Group (ICMG) 
in  February  2009  and  its  implementation  started  from  then.  The  programme  for 
the  following  year  was  agreed  by  the  ICMG  in  January  2010  and  formalised  in 
March 2010. 

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Comprehensive spending review 

77. 

(European  Parliament,  §177  and  §178)  The  EP  calls  on  the  Commission  to 
undertake  urgently  during  2011  a  comprehensive  spending  review  of  all  areas  of 
activity  to  ensure  all  expenditure  is  delivering  value  for  money  in  order  to  identify 
possible  savings  which  would  reduce  the  pressure  on  the  budget  in  this  period  of 
austerity. The EP believes that all demands for increased expenditure in key priority 
areas  can  be  met  by  savings  from  existing  programmes  and  that  greater  scrutiny 
should therefore be made of outdated or ineffectual programmes to allow funds to be 
reallocated 

Commission's response: 

In  the  context  of  the  preparation  of  the  2012  Draft  Budget  Commission  services 
proceeded  to  an  exhaustive  examination  of  spending  programmes  in  view  of 
identifying  areas  for  redeployment.  As  a  result,  the  Commission  proposed 
substantial margins within the various expenditure ceilings in view of serving new 
political priorities during the course of the Budget procedure. 

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Priority actions - general 

78. 

(European  Parliament,  §179)  The  EP  calls  on  the  Commission  to  present  to 
Parliament's competent committee a plan presenting the actions that it intends to take 
regarding  reform  of  the  current  discharge  procedure,  NMDs,  the  completion  of  the 
Commission's  governance  structure,  systematic  interruption  and  suspension  of 
payments  as  well  as  lifting  of  the  measure  and  the  improvement  of  the  corrective 
mechanisms 

Commission's response: 

The recommendation is partially accepted.  

An explanation on all the priority actions was transmitted to the budgetary control 
Committee by Commissioner Šemeta on 24 February 2011. 

On  National  Management  Declarations,  the  Commission's  proposal  in  the 
Financial Regulation (FR) for management declarations of assurance (Article 56 
of the proposal for a revised FR) was a first step towards meeting the Parliament's 
request  to  have  national  declarations  signed  at  political  level.  Such  management 
declarations would provide the Commission with substantial additional assurance 
as to the use of EU funds by Member States. Once approved and implemented by 
the Member States, the Commission is committed to assessing the added-value of 
these  management  declarations  after  a  reasonable  period.  On  this  basis  the 
Commission  could  envisage  proposing  the  political  endorsement  of  the  reporting 
and accountability process supporting and including the managerial declaration of 
assurance. 

The  Commission  does  not  commit  to  an  Action  Plan  on  how  to  make  National 
Management Declarations mandatory, but will implement the two steps approach. 

Regarding  the  interruption/suspension  of  payments  and  the  improvement  of  the 
corrective mechanisms, the Commission services are instructed to timely interrupt 
payment deadlines as soon as there is evidence to suggest a significant deficiency 
in the management and control system supported by an audit report, as requested 
in  the  legal  basis  (art.  91  Reg.  1083/2006).  The  systematic  policy  on  interruption 
and suspension of payments has already been illustrated in the examples brought 
to the Committee on Budgetary Control of the European Parliament, which clearly 
show  that  the  sequence  in  the  audit  and  legal  steps  triggering  interruptions  and 
suspensions is followed systematically and without disruption by the Commission. 

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Priority action - Reform of the current discharge procedure 

79. 

(European Parliament, §180) The EP calls on the Commission to organise an inter-
institutional  discussion  involving  at  the  initial  phase,  at  the  highest  level, 
representatives of the Council, of the Commission, of the Court of Auditors and of 
Parliament,  and  in  the  second  phase  representatives  from  the  Member  States,  from 
national parliaments and from supreme audit institutions, with a view to embarking 
on a comprehensive debate on the current discharge procedure system 

Commission's response: 

The rules applicable to the discharge procedure, and in particular the time limits, 
are  set  out  in  the  Financial  Regulation  (FR).  The  shortening  of  the  whole 
procedure  is  part  of  the  discussion  on  the  current  review  of  the  Financial 
Regulation. 

The Commission has already invited the Discharge Authority, the Council and the 
European Court of Auditors to set up a working group in order to elaborate on a 
comprehensive  reform  of  the  discharge  procedure,  aiming  at  a  shorter  timetable 
that leaves sufficient time for the institutions involved to prepare and present their 
respective  contributions.  A  conference  could  be  organised  to  discuss  the 
conclusions of this working group. 

80. 

(European  Parliament,  §181)  The  EP  calls  on  the  Commission  to  put  forward 
proposals for reducing the periods involved in the discharge process, so that the vote 
in  plenary  can  be  held  in  the  year  following  the  financial  year  under  review; 
encourages  the  Court  of  Auditors  and  all  institutions  to  shorten  and  strengthen  the 
discharge  procedure,  making  it  more  transparent  and  understandable  to  Union 
taxpayers 

Commission's response: 

The Commission has already invited the Discharge Authority, the Council and the 
European Court of Auditors to set up a working group in order to elaborate on a 
comprehensive  reform  of  the  discharge  procedure,  aiming  at  a  shorter  timetable 
that leaves sufficient time for the institutions involved to prepare and present their 
respective  contributions.  A  conference  could  be  organised  to  discuss  the 
conclusions of this working group. 

EN 

55 

   EN 

 
Priority action - National management declarations 

81. 

(European  Parliament,  §189)  The  EP  invites  the  Commission  to  present  a  formal 
proposal  for  the  introduction  of  mandatory  NMDs  duly  signed  by  each  national 
finance minister according to the following steps: 

–  an  analysis  of  the  quality,  completeness,  objectivity,  relevance  and  usefulness  of 
existing NMDs including an assessment of the added value of the information given 
as well as possible shortcomings in them, 

–  the  drawing  up  of  guidelines  on  the  definition  of  common  key  aspects  of  NMDs 
ensuring that they will be useful for both the Commission and the Court of Auditors, 

–  the  establishment  of  a  roadmap  indicating  the  date  at  which  the  Member  States 
shall have completed the main steps in the process of introducing NMDs, as well as 
the introduction in the Financial Regulation of mandatory NMDs by 1 January 2014, 
which marks the start of the new Financial Perspectives; 

and  proposes  that  the  substance  of  the  NMDs  should  comply  with  international 
auditing standards and should assist the audit by the Court of Auditors 

Commission's response: 

In  the  Commission's  view,  management  declarations,  audited  by  an  independent 
auditor, as currently already the case for Agriculture, would be more appropriate 
for  obtaining  assurance  from  Member  States  on  the  proper  management  of  EU 
Funds than any mandatory national declarations. For this reason, the Commission 
proposal  for  the  triennial  revision  of  the  Financial  Regulation  adopted  in  May 
2010  included  a  requirement  for  annual  management  declarations  of  assurance 
from  accredited  bodies  in  the  Member  States,  accompanied  by  an  independent 
audit opinion thereon. If a Member State has accredited more than one body per 
policy area, it should, in addition, provide the Commission with a synthesis report 
with  an  overview  at  national  level  of  all  management  declarations  of  assurance 
and  audit  opinions  thereon.  The  inter-institutional  discussion  on  the  revision  of 
the FR is currently ongoing. 

The  Commission  services  have  issued  a  working  document  (SEC(2011)250) 
providing an analysis of the assurance process on the execution of the EU budget 
in shared management, an evaluation of the national declarations issued by four 
Member States and guidance on how to add value to this assurance process. The 
study concluded that there is no evidence of the impact that national declarations 
had  on  the  improvement  of  accountability  at  national  level  and  that  the 
management declarations of assurance proposed for the revision of the Financial 
Regulation  are  much  more  appropriate  to  obtain  assurance  from  Member  States 
than the present voluntary national declarations. 

Once the revision of the Financial Regulation is approved and implemented by the 
Member  States,  the  Commission  intends  to  assess  the  added-value  of  these 
management declarations after a reasonable implementation period. On this basis, 
the  Commission  could  envisage  proposing  the  political  endorsement  of  the 

EN 

56 

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reporting  and  accountability  process  supporting  and  including  the  managerial 
declaration of assurance. 

EN 

57 

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Priority action - Completion of the Commission's governance structure 

82. 

(European  Parliament,  §191)  The  EP  invites  the  Commission  to  complete  its 
governance structure by adding the signature of the responsible Commissioner to the 
Director-General's  Annual  Activity  Report  and  by  having  the  Synthesis  Report  - 
which also shall include a "scoreboard" on the quality of controls per Member State 
and policy area - signed by the President of the European Commission 

Commission's response: 

The  Commission  considers  that  the  management  responsibility  assigned  to 
the 
Directors  General  should  not  be  diluted  by  adding  signatures  by 
Commissioners in the annual Activity Reports. Moreover, the standing instructions 
on  the  preparation  of  the  Annual  Activity  Reports  were  updated  so  that  the 
Director  General  clearly  confirms  that  the  main  elements  of  his/her  report  and 
assurance declaration, including the reservations envisaged, have been brought to 
the  attention  of  the  Commissioner.  The  Commission  considers  that  the  AODs 
analysis of the quality of Member States' management and control systems should 
be presented in their AARs. 

83. 

(European  Parliament,  §192)  The  EP  notes  that  in  order  to  complete  the 
Commission's  governance  structure  it  may  have  to  undertake  a  strengthening  of 
procedures  to  allow  the  College  to  adopt  the  Synthesis  Report  and  to  allow  the 
individual  Commissioners'  involvement  and  participation  in  the  preparation  of  the 
Director-General's  Annual  Activity  Report  which  includes  the  following  measures 
applicable for the financial year 2010: 

–  the  transmission  to  Parliament's  competent  committee  and  publication  of  the 
minutes from the meeting at which the College adopts the Synthesis Report, 

– the transmission to Parliament's competent committee of the declaration from the 
Director-General  about  his  meeting  with  the  responsible  Commissioner  explaining 
clearly  and  completely  the  content  of  their  deliberations  on  the  Annual  Activity 
Reports as well as any reservations 

Commission's response: 

The  Commission  transmitted  to  the  European  Parliament  the  minutes  of  the 
meeting (which are public) at which the College adopted the Synthesis Report. 

Moreover,  the  Commission  believes  that  all  Director-Generals  complied  with  the 
standing  instructions  on  the  preparation  of  the  AARs  and  clearly  confirmed  that 
the  main  elements  of  his/her  report  and  assurance  declaration,  including  the 
reservations envisaged, have been brought to the attention of the Commissioner. 

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Priority action - Systematic activation of interruption and suspension of payments as 
well as lifting of the measure 

84. 

(European  Parliament,  §194,  §195  and  §196)  The  EP  invites  the  Commission  to 
introduce  a  systematic  activation  of  interruptions  and  suspensions  of  payments  as 
soon as evidence suggests a significant deficiency in the functioning of the Member 
States' management and control systems (without a decision of the Commission). 

The EP believes that the process leading to this shall include: 

– the transmission to Parliament's committee of clear information on all interruptions 
and suspensions and the reasons, 

–  a  description  of  criteria  applicable  for  all  DGs  and  leaving  no  room  for 
interpretation  whereby  a  systematic  mechanism  without  prior  decision  on  political 
level shall be created, 

– the inclusion in the FR of the principle of systematic interruption and suspension of 
payments triggered by evidence of significant deficiencies in the functioning of the 
Member  States'  management  and  control  system  and 
the  development  of 
comprehensive guidelines in order to avoid misunderstandings, 

– the transmission by the Commission of a copy of any recovery letter and any letter 
announcing financial corrections to the national parliament and the national supreme 
audit institution of the Member State concerned as well as to Parliament's competent 
committee 

Commission's response: 

The  Commission  has  taken  the  requested  action  with  the  exception  of  the 
recommendation formulated in the last indent. Moreover suspensions will continue 
to require a decision by the Commission. 

Such information has already been transmitted to the COCOBU by Commissioner 
Šemeta letter of 24 February 2011. 

The Commission services have been instructed to proceed systematically and timely 
and  to  interrupt  payments  as  soon  as  there  is  relevant  evidence  suggesting  a 
significant  deficiency  in  the  management  and  control  systems.  Indeed,  the 
Commission exercised rigorously this supervisory role in 2010 by interrupting 63 
(49 ERDF and 14 ESF) payment deadlines and adopting six suspension decisions 
for 2000-2006 and 2007-2013 operational programmes, where serious deficiencies 
or irregularities have been detected. The Commission is pursuing this strict policy 
in 2011, with 54 interruptions of payment deadlines decided (40 for ERDF and14 
for ESF) by 30 June 2011. 

The  Annual  Activity  Reports  for  2010  of  DG  EMPL  and  REGIO  provide  for  the 
full  list  of  interruption  of  payments  adopted  in  2010  and  2011  until  the  date  of 
issuance of the AARs. 

EN 

59 

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The  Commission  has 
the  Parliament  (COCOBU)  detailed 
information on all actions undertaken in the framework of the 2008 Action Plan in 
structural  actions  and  in  particular  on  decisions  on  suspensions  and  financial 
corrections, and has satisfied all requests for information. 

transmitted 

to 

However,  the  Commission  will  not  be  taking  action  in  transmitting  copies  of  any 
recovery  letter  and  any  letter  announcing  financial  corrections  to  the  national 
parliaments  and  the  national  supreme  audit  institutions  of  the  Member  States 
concerned  due  to  the  heavy  additional  administrative  burden  this  entails.  The 
Commission  considers  that  it  is  up  to  the  National  Parliaments  and  National 
Supreme Audit Institutions to obtain the requested information from their national 
management  and  control  authorities  for  the  Structural  Funds  responsible 
administrations  who  implement  the  Funds  and  programmes,  in  their  supervising 
role. 

Finally, the conditions for any interruption or suspension of payments should be 
laid  down  in  the  sector  specific  rules  to  take  account  of  the  specificity  of  each 
policy  area.  This  principle  is  also  included  in  Article  56  of  the  Commission 
proposal for the triannual revision of the Financial Regulation. 

EN 

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Priority action - Improvement of corrective mechanisms 

85. 

(European Parliament, §197 and §198) The EP insists that the Commission improve 
the  corrective  mechanisms  ensuring  that  the  financial  consequences  of  incorrectly 
made payments are borne by the beneficiaries and not the taxpayers. 

This  shall  include  the  presentation  to  Parliament's  competent  committee  of  the 
following: 

–  a  full  list  of  all  financial  corrections  implemented  since  2000,  as  well  as 
information  on  whether  incorrectly  received  payments  have  been  recovered  or 
replaced  by  other  projects,  in  which  case  a  qualitative  assessment  of  these 
replacement projects shall also be presented, 

– the measures to be taken following the ECA conclusion that "the Commission does 
not always receive reliable information from Member States" (Annual Report 2009, 
point  1.49),  with  a  list  of  the  concerned  MS  and  the  amounts  as  well  as  with 
information  on  the  results  of  the  "standardized  procedure"(Commission's  reply  in 
Annual Report 2009, point 1.34) introduced for the 2007-2013 period, 

–  an  action  plan  on  how  to  better  integrate  and  reconcile  the  Court  of  Auditors' 
findings on annual error rates at the beneficiary level and the Commission's work on 
the  follow-up  of  those  findings  as  well  as  the  financial  corrections  and  recoveries 
made  over  the  whole  life-cycle  of  the  different  programmes  up  to  the  closure 
procedure and including the identification of payments that may be subject to further 
verification  and  clearance  of  accounts  procedures  and  a  better  follow-up  of  the 
Member States' recovery efforts 

Commission's response: 

The  Commission  has  instructed  the  services  operating  shared  management  to 
report in their Annual Activity Reports information on financial corrections, split 
by  Member  State.  Services  were  invited  to  provide  a  clear  split  by  Member  State, 
programming period and fund. Note N°6 to the accounts was complemented with 
the  inclusion  of  a  template  showing  cumulative  figures  at  the  end  of  2010, 
covering  all  Funds  under  shared  management  and  how  much  of  the  financial 
corrections were effectively recovered/implemented. 

Commission services were also instructed to focus their audits on the performance 
of MS systems for recovery (timing, ratio, amounts) so that serious weaknesses in 
this area will more effectively contribute to triggering the decision of interrupting 
payments. 

A  special  audit  module  will  be  created  to  specifically  cover  performance  for  MS 
systems for recoveries.  Audits will start in 2011 on a risk basis. 

For the next generation of programmes, proposals will be made in 2011 aiming at 
compelling Member States to recover from final beneficiaries financial corrections 
imposed  on  them  and  ensuring  they  have  the  legal  instruments  to  enforce  their 

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recovery  orders  and  that  the  Commission  has  the  legal  basis  to  check  this 
obligation. 

As  regards  cohesion  instrument,  the  Commission  started  to  take  action  under  its 
2008  Action  Plan  and  has  already  improved  the  reported  amounts  by  Member 
States. Moreover, the Commission is verifying the relevant data in the framework 
of closure for 2000-2006 programmes. In case of doubts or inconsistencies in these 
data, the Commission will suspend the final payment until it obtains complete and 
coherent information. 

The  Commission  has 
the  Parliament  (COCOBU)  detailed 
information on all actions undertaken in the framework of the 2008 Action Plan in 
structural  actions  and  in  particular  on  decisions  on  suspensions  and  financial 
corrections, and has satisfied all requests for information. 

transmitted 

to 

As  regards  Agriculture,  the  conformity  clearance  system  is  designed  to  exclude 
expenditure from EU financing which has not been executed in compliance with 
EU  rules  (financial  corrections).  In  contrast,  it  is  not  a  mechanism  by  which 
irregular payments to beneficiaries are recovered, which according to the principle 
of  shared  management  is  the  sole  responsibility  of  Member  States.  Where  undue 
payments  are  or  can  be  identified  as  a  result  of  the  conformity  clearance 
procedures,  Member  States  are  required  to  follow  them  up  by  recovery  actions 
against  the  final  beneficiaries.  However,  even  where  this  is  not  possible  because 
the  financial  corrections  only  relate  to  deficiencies  in  the  Member  States' 
management and control systems, financial corrections are an important means to 
improve  these  systems  and,  thus,  to  prevent  or  detect  and  recover  irregular 
payments  to  final  beneficiaries.  The  conformity  clearance  thereby  contributes  to 
the legality and regularity of the transactions at the level of the final beneficiaries. 
If  the  Commission  finds  that  a  Member  State  does  not  pursue  the  recovery  of 
irregular  payments  with  the  necessary  diligence,  it  may  decide,  and  already  has 
done  so,  to  exclude  the  amounts  at  stake  from  EU  financing.  Regular  audits  are 
carried out to verify whether Member States comply with their obligations in this 
respect. Finally, the Commission disagrees with the EP specific request to inform 
also the national parliaments and SAI as it considers that it is up to the national 
parliaments  and  national  supreme  audit  institutions  to  obtain  the  requested 
information  from  their  national  responsible  administrations  who  implement  the 
Funds and programmes, under their supervising role. 

In  the  area  of  Structural  Funds,  the  Commission  will  carry  out  in  the  second 
semester of 2011 a specific audit enquiry with the objective to determine whether 
the programmes certifying authorities have satisfactory arrangements in place for 
those  recoveries  and 
recovering 
appropriately reporting them to the Commission. 

irregular  amounts,  keeping  account  for 

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Priority action - Performance evaluator 

86. 

(European  Parliament,  §199  -  §201)  The  EP  invites  the  Commission  to  appoint  a 
"performance  evaluator"  with  responsibility  for  the  preparation  of  the  evaluation 
report  required  in  accordance  with  Article  318  of  the  Treaty  on  the  Functioning  of 
the  European  Union  to  be  endorsed  by  the  College  of  Commissioners  in  order  to 
establish a clear "ownership" of this report 

The  EP  believes  that  the  methodology  to  be  used  for  the  production  of  this  report 
should be audited by the IAS which should also assess the work done, and that the 
key  performance  indicators  used  by  all  departments  in  the  Commission  shall  be 
publicly available 

The  evaluation  report  should  be  presented  in  Plenary  during  a  debate  at  which  the 
Court of Auditors will also be invited to present its opinion 

Commission's response: 

The Commission is committed to present the evaluation report in full compliance 
with Article 318 of the Treaty on the Functioning of the European Union (TFEU). 
The Commission will use its established general working methods to produce this 
report along with all of the other policy statements and documents that it produces 
concerning  evaluation  issues.  The  Commission  notes  that  the  Internal  Audit 
Service  exercises  its  own  independent  authority  in  programming  its  audit  work. 
The  report  will  be  published  and  transmitted  to  the  EP  by  the  Commission 
according to established procedures. 

EN 

63 

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Priority action - Introduction of a new spending logic 

87. 

(European  Parliament,  §202)  The  EP  invites  the  Commission  to  introduce  a  new 
spending  logic  aimed  at  improving  the  quality  of  spending  and  ensuring  that  funds 
provided by Union taxpayers are spent both correctly and wisely, and including the 
following principles: 

–  establishing  the  Union  budget  on  the  basis  of  an  examination  of  the  proposed 
policies,  the  'delivery'  costs  for  the  bodies  involved  and  the  beneficiaries  and  the 
objectives which could be achieved with the available funds, 

– ensuring that schemes and programmes are realistic and as simple as possible, 

– ensuring full and agreed accountability for spending, 

and proposes that the Commission, in cooperation with the Court of Auditors, study a 
procedure  with  a  view  to  obtaining  an  overall  statement  of  assurance  for  each 
Financial  Perspective  and,  pending  a  legal  basis  to  make  such  a  procedure 
mandatory, that it apply it voluntarily 

Commission's response: 

As  outlined  in  'A  Budget  for  Europe  2020',  the  Commission  will  work  with  the 
legislative authority to ensure that the principles of simplification, sound financial 
management  and  accountability  are  fully  integrated  in  future  programming 
activity.  In  this  context,  the  Commission  has  already  proposed  comprehensive 
simplification measures in the proposed revision of the FR. The Commission will 
issue a dedicated Communication on simplification at the end of 2011 once all of 
its sector specific proposals have been tabled. 

The  Commission  considers  that  obtaining  an  overall  statement  of  assurance  for 
each Financial Perspective would not add value to the existing annual governance 
structure  under  which  a  full  and  agreed  accountability  process  for  spending  is 
already in place. 

EN 

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Observations from committee on development 

88. 

(European Parliament, §204) The EP urges DG ECHO to bolster its monitoring and 
follow-up capacity 

Commission's response: 

The requested action has been taken. The Commission ensures a systematic follow 
up of the audit recommendations at each next DG ECHO audit visit of a partner be 
it at field or HQ level (every 2 to 4 years) and critical observations are used for the 
partner's annual evaluation. 

89. 

(European  Parliament,  §205)  The  EP  calls  on  the  Commission  to  integrate 
environmental  aspects  more  comprehensively  into  development  projects,  including 
budget  support  programmes,  and  to  evaluate  environmental  mainstreaming  in 
development  cooperation;  regrets  that  these  shortcomings  may  be  due  to  staff 
shortages  and  looks  forward  to  progress  with  the  advent  of  the  European  External 
Action Service 

Commission's response: 

The  Commission  agrees  that  the  issue  of  environmental  integration  should  be 
given  high  priority.  Work  in  this  area  will  continue  in  close  coordination  and 
harmonisation with EU Member States, in support of the aid effectiveness agenda. 
It  shall  include  in  particular  the  following  steps,  which  are  mentioned  in 
EuropeAid's 2010 Annual Annual Report: 

-  further  work  on  indicators  to  monitor  the  effectiveness  of  a  new  environment 
strategy and to assess environmental integration in the Commission's operations; 

- overall evaluation of environmental mainstreaming in development cooperation; 

-  revised  Budget  Support  guidelines  including  new  guidance  on  cross-cutting 
issues; 

- adoption of an environment strategy integrating all the above elements. 

90. 

(European  Parliament,  §207)  The  EP  urges  the  Commission  to  help  partner 
countries  develop  parliamentary  control  and  audit  capacities  and  to  increase 
transparency and public access to information, in particular when aid is provided via 
budget  support,  in  line  with  the  provisions  of  Article  25(1),  point  (b),  of  the  DCI 
Regulation, and invites the Commission to report regularly on progress achieved 

Commission's response: 

The support to national oversight bodies (Parliaments and Court of Auditors) has 
considerably  increased  in  the  last  five  years.  There  have  been  three  new 
programmes  approved  in  the  last  two  years  in  DCI  countries  providing  technical 
assistance to improve  national  oversight bodies.  Reporting on these activities  will 
be improved. 

EN 

65 

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91. 

(European  Parliament,  §208)  The  EP  calls  once  again  on  the  Commission  to 
demonstrate  that  it  has  spent  at  least  20  %  of  development  aid  on  basic  and 
secondary education and basic health, including safe access to water and sanitation; 
further  suggests  that  impact  assessments  accounting  for  this  spending  should  be 
thoroughly  carried  out  in  order  to  maximise  the  effectiveness  of  the  programmes 
undertaken 

Commission's response: 

The Commissioner already sent the related statistics demonstrating the fulfilment 
of  the  20%  of  country  level  programmed  aid  under  the  DCI  for  basic  and 
secondary  education  and  basic  health  to  the  European  Parliament  (Note  CAB 
11/SS/tm devco.g.8(2011)473250 dated 03/05/2011) to the Chair of the Committee 
on Development; in this note the Commissioner also reported on programmed aid 
for water and sanitation, which, however, was not part of the initial programming 
benchmark of 20%. Impact assessment through appropriate results monitoring is a 
permanent task of the Commission's aid effectiveness monitoring; it has to happen 
at  the  beneficiary  country  level  and  data  quality  and  data  availability  as  well  as 
appropriate results reporting are permanent objectives of the sector policy dialogue 
with the partner countries. 

92. 

(European  Parliament,  §209)  The  EP  invites  the  Commission  to  place  greater 
emphasis  on  women's  health  in  developing  countries  in  general,  and  improving 
maternal health in particular, as this is the area where the Millennium Development 
Goals targets are furthest from being met 

Commission's response: 

The  Commission  has  substantially  increased  emphasis  on  women's  health, 
including maternal health. The Commission is part of the G8 Muskoka Initiative 
on Women's and Children's Health of June 2010 with a pledge of EUR 50 million 
additional funding (EDF). The Commission also fully supports the Global Strategy 
for  Women's  and  Children's  Health  for  accelerated  progress  towards  MDG  4  on 
children's  health  and  MDG  5  on  maternal  health  and  universal  access  to 
reproductive health, which was launched by the UN Secretary General at the MDG 
Summit  of  September  2010.  At  the  MDG  Summit  the  Commission  announced  a 
EUR  1  billion  MDG  Initiative  (EDF)  for  the  MDGs  most  lagging  behind, 
including  for  MDG  5.  In  addition  the  Commission  has  concluded  a  call  for 
proposals  on  sexual  and  reproductive  health  and  rights  and  is  preparing  for 
support  to  the  UNFPA  Global  Programme  on  reproductive  health  commodity 
security  under 
is 
emphasising the rights of women and girls in general and as part of the health and 
education agenda emphasising gender equality and women empowerment. 

in  People  Programme.  The  Commission 

the  Investing 

93. 

(European Parliament, §211) The EP calls on the Commission to implement a more 
transparent and objective process for selecting aid implementation channels 

Commission's response: 

DG  DEVCO  is  currently  updating  and  consolidating  its  three  core  operational 
guidance  (Project  Cycle  Management,  Sector  Policy  Support  Programme  and 

EN 

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Budget  Support)  into  one  overall  guidance  for  Project  and  Programme  Cycle 
Management which will include more structured guidance for context analysis at 
the  country  and  sector  level  that  will  feed  into  a  risk  management  framework 
allowing  authorising  officers  to  take  more  informed  decisions  on  the  most 
appropriate aid implementation modalities to achieve objectives. 

94. 

(European  Parliament,  §212)  The  EP  urges  the  Commission  to  ensure  better 
visibility for Union-funded activities overseas 

Commission's response: 

All  project  financed  by  the  EU  are  contractually  required  to  provide  adequate 
visibility  to  the  EU  and  to  respect  the  visibility  manual.  The  Commission  is 
monitoring the implementation of these requirements. 

EN 

67 

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Observations from committee on Employment and Social Affairs 

95. 

(European Parliament, §214) The EP calls for greater efforts to reduce, in particular, 
instances of the reimbursement of ineligible costs 

Commission's response: 

The  current  Structural  Fund  Regulation  provides  the  Commission  with  all 
corrective  tools  for  the  Commission  to  perform  its  supervisory  role  in  case  of 
serious  deficiency 
the  management  and  control  system  (and  risk  of 
reimbursement of ineligible expenditure): 

in 

- interruption of deadlines to proceed with interim payments without any delay by 
the Director General where there is evidence to suggest a significant deficiency in 
the management and control systems in a national or Commission audit report or 
where  it  is  necessary  to  carry  out  supplementary  verifications  in  relation  to  a 
serious irregularity in a payment claim not corrected by the Member State; 

-  suspension  of  interim  payments  by  Commission  decision  at  the  level  of  the 
operational  programme  or  the  priority  axis  in  case  of  a  serious  deficiency  in  the 
management and control systems or a serious irregularity in a payment claim or in 
case  of  a  serious  breach  of  the  Member  State's  obligations  in  relation  to 
management and control systems for reimbursement of irrecoverable amounts lost 
due to its fault or negligence; 

- implementation of financial corrections by Commission decision (in the course of 
ongoing operational programmes or at their closures). 

In  the  future  regulation  post  2013,  the  Commission  will  make  all  necessary 
proposals  to  maintain  and  strengthen  this  strict  approach  to  avoid  ineligible 
payments. The shift envisaged to a system of annual clearance of accounts for the 
programming  period  post-2013  is  intended  to  improve  the  assurance  in  the 
Structural Funds, combining an annual audit opinion and immediate corrections 
before certification to the Commission. 

96. 

(European  Parliament,  §215)  The  EP  calls  on  the  Commission  to  contribute  to 
improved  financial  management  by  continuing  the  action  programme  to  speed  up 
decision-making procedures in respect of financial corrections 

Commission's response: 

Thanks to the Action Plan adopted by the Commission to strengthen its supervisory 
role 
in  shared  management,  financial  correction  procedures  have  been 
implemented in a more rigorous way, taking into account the regulatory deadlines 
provided  to  Member  States  to  present  complementary  information.  The  level  of 
financial  corrections  shows  the  Commission's  response  to  the  detection  of 
significant systems deficiencies in Member States and the reinforced follow-up to 
all audit activity. 

EN 

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As  regards  the  reduction  of  loss  to  the  EU  budget  by  financial  corrections,  the 
implementation  of  the  Action  Plan  shows  clearly  that,  as  a  result  of  the  more 
stringent  financial correction procedures and targeted Commission audit activity, 
the  level  of  financial  corrections  for  both  1994/99  and  2000/06  periods  has 
increased, totalling EUR 3.678 billion for the two years since the Action Plan 2008 
and  2009,  compared  to  a  total  of  approximately  EUR  3.567  billion  for  the  years 
between 2000 and 2007. 

EN 

69 

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Observations from committee on Internal Market and Consumer Protection 

97. 

(European  Parliament,  §218)  The  EP  invites  the  Commission  to  Increase  the 
publicity  given  to  available  grants,  especially  as  concerns  the  joint  actions  in  the 
framework  of 
the  Consumer  Protection  Cooperation  Regulation,  where  no 
applications were received 

Commission's response: 

Since 2010, the Commission started to take the requested action and will continue 
with the measures to that effect in the coming years. 

The  Commission  makes  significant  efforts  to  encourage  CPC  authorities  to  take 
part  in  the  joint  actions  in  the  framework  of  the  CPC  Regulation.  The  call  for 
proposals being open for about five months (from March to July), participation is 
promoted by the Commission on numerous occasions such as at the CPN and CPC 
Committee  meetings.  The  Commission  also  makes  contacts  with  MS  via  e-mail 
and/or telephone to discuss potential topics of joint actions. However, participation 
involved 
in 
authorities and given the austerity measures taken on national level in response to 
the crisis, some Member States find it difficult to join. 

these  common  activities  requires  financial  contribution  from 

98. 

(European Parliament, §219) The EP asks the Commission to use the results of the 
Consumer Markets Scoreboard in its policy-making in all relevant areas 

Commission's response: 

The  Commission  started  to  take  the  requested  action  and  will  continue  with  the 
measures  to  that  effect  in  the  coming  years.  The  Consumer  Market  Scoreboards 
regularly  provides  data  on  the  functioning  of  markets  from  a  consumer 
perspective.  It  also  monitors  consumer  conditions  in  Member  States  and  the 
development  of  cross-border  e-commerce.  Subsequent  studies  are  carried  out  to 
analyse  markets  and  to  propose  solutions.  The  results  of  the  market  monitoring 
process have already been included in several initiatives in the fields of financial 
services, energy and redress. 

99. 

(European  Parliament,  §222)  The  EP  urges  the  Commission  to  analyse  the 
effectiveness  of  current  financing  programmes  for  SMEs  and  facilitate  their 
participation  in  Union  research  programmes  through  the  introduction  of  innovative 
financial instruments in the Union budget 

Commission's response: 

The Commission launches on a regular basis evaluation exercises according to the 
legal  provisions.  In  this  respect,  very  recently  the  Interim  Evaluation  of  the 
Seventh  Framework  Programme  and  the  Interim  Evaluation  of  Eurostars 
Programme have addressed the effectiveness of current financing programmes for 
SMEs. 

EN 

70 

   EN 

 
The Commission is currently working on the preparation of the next Framework 
Programme  for  Research  and  Innovation.  In  this  context,  it  will  present  to  the 
European Parliament and to the Council a proposal where the aspects highlighted 
by the Parliament will be addressed. 

100. 

(European Parliament, §223) The EP asks the Commission to report back as soon as 
possible  on  the  follow-up  given  to  the  relevant  judgments  of  the  Court  of  Justice 
(point  2.22  of  the  ECA  annual  report  on  goods  unlawfully  introduced  into  Union 
territory) 

Commission's response: 

The Commission has examined the rulings of the ECJ in Elshani (Case C-459/07) 
and Dansk Logistik (Case-C-230/08) and concluded that its current position can be 
maintained. 

101. 

(European  Parliament,  §224)  The  EP  asks  the  Commission  to  pay  particular 
attention  when  drafting  the  implementing  provisions  of  the  Modernised  Customs 
Code  to  the  performance  of  physical  checks  on  goods,  both  for  fiscal  and 
safety/security purposes 

Commission's response: 

Customs controls including physical control are based on risk analysis. This is to 
be  confirmed  in  the  Modernised  Customs  Code  Implementing  Provisions 
(MCCIP). 

Implementation of the MCC was envisaged for 24 June 2013. However, in order to 
ensure the development and deployment of electronic systems and the alignment of 
the MCC with the provisions of the Lisbon Treaty, the Commission intends to table 
the  date  of  application  and  
a  proposal 
implementation. 

suggesting  postponement  of 

102. 

(European  Parliament,  §224)  The  EP  asks  for  improvement  of  pre/post  audit 
controls in respect of simplified procedures and centralised clearance 

Commission's response: 

The Commission looks at this issue during monitoring visits in all Member States 
which  started  in  2010  and  which  will  end  in  2013.  The  Commission  reminds  the 
Member  States  to  carry  out  sufficient  controls  (pre-audits,  import  and  post  audit 
controls) in respect of simplified procedures and centralised clearance. 

EN 

71 

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Observations from committee on Transport and Tourism 

103. 

(European Parliament, §230) The EP calls on the Commission to intensify its efforts 
to further reduce the margin of error most probably between 2 and 5 % 

Commission's response: 

In  the  Commission's  opinion,  a  DAS  error  rate  around  the  middle  of  this  range 
would  be  acceptable  and  justified.  The  Commission  does  not  currently  intend  to 
further intensify controls. 

104. 

(European  Parliament,  §232)  The  EP  stresses  that  there  is  an  urgent  need  for 
regional  and  transport  policies  to  be  transparent  through  the  provision  of  proper 
information to taxpayers and budget authorities, and to be more closely coordinated, 
particularly  as  regards  TEN-T  funding,  as  at  present  only  cursory  consideration  is 
given to the potential European added value of projects and consequently funds are 
not  used  as  effectively  as  possible  to  eliminate  bottlenecks  and  problems  in 
connection with border crossings or inadequate connections 

Commission's response: 

The requested action has been taken. The White Paper adopted on 28 March 2011 
(COM(2011)144  final)  by  the  Commission  addresses  the  major  issues  raised  and 
advocates a new funding framework for transport infrastructure: 

- with sufficient conditionality to provide support for the completion of the TEN-T 
core  network  as  well  as  other  infrastructure  programmes,  encompassing  the 
investment  strategies  of  both  the  TEN-T  programmes  and  the  Cohesion  and 
Structural Funds, and considering revenues from transport activities; 

- by providing EU support for developing and deploying technologies that improve 
infrastructure use, efficiency and decarbonisation (new road network pricing and 
tolling systems, ITS and capacity improvement programs); 

- by linking  TEN-T funding to progress towards the completion of the TEN-T core 
network and on the pooling of national resources along corridors. 

105. 

(European  Parliament,  §233)  The  EP  insists  that  the  procedures  for  selecting  and 
approving  transport  projects  under  the  Cohesion  Policy  should  be  more  soundly 
based 

Commission's response: 

The Commission has taken the requested action. The procedures for selecting and 
approving projects are sound, particularly following the substantial overhaul of the 
Regulatory  framework  for  the  2007-2013  programming  period,  in  particular, 
through  the  application  of  the  principles  of  programming  for  Cohesion  Fund 
projects and the new rules on major projects. 

EN 

72 

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The  Commission  continues  to  work  on  the  improvement  of  procedures  and  is 
the 
investing  significant  resources 
improvement  of  project  preparation  and  appraisal.  It  should  be  recalled  that 
Member  States  have  the  main  responsibility  for  selecting  projects.  Only  projects 
above  the  €50  million  threshold,  i.e.  major  projects,  are  adopted  by  the 
Commission  after  their  appraisal  in  accordance  to  the  General  Regulation, 
1083/2006. 

through  JASPERS 

to  contribute 

to 

106. 

(European  Parliament,  §234)  The  EP  supports  the  ECA  recommendation  that  the 
Commission  should  consider  appointing  further  coordinators  for  the  other  priority 
projects 

Commission's response: 

The  requested  action  has  already  been  taken.  The  Court  carried  out  its 
performance  audit  in  2009  and  early  2010.  On  8  June  2010  the  Commission 
appointed three new coordinators. It has no plans to appoint further ones. 

EN 

73 

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Observations from committee on Civil liberties, Justice and Home affairs 

107. 

(European  Parliament,  §241)  The  EP  calls  on  the  Commission  to  publish  the  mid-
term evaluation reports on the different funds and programmes as soon as possible 

Commission's response: 

The requested action has been taken by DG Justice and DG Home Affairs for their 
respective programmes. 

Concerning  the  programmes  managed  by  DG  Justice,  all  mid-term  evaluation 
reports  were  adopted  and  published  as  follows:  "Drugs  prevention  and 
information"  and  "Fundamental  rights  and  citizenship"  programmes  on  5  May 
2011  (COM(2011)246  and  COM(2011)249  respectively),  "Fight  against  violence 
(Daphne  III)"  and  "Criminal  Justice"  programmes  on  11  May  2011 
(COM(2011)254 and COM(2011)255 respectively) and "Civil Justice" programme 
on 15 June 2011 (COM(2011)351). 

Concerning  the  programmes  managed  by  DG  Home  Affairs,  the  mid-term 
evaluation  report  for  the  programmes  "Prevention  and  fight  against  crime"  and 
"Prevention,  preparedness  and  consequence  management  of  terrorism  and  other 
security  related  risks"  was  adopted  and  published  on  16  June  2011 
(COM(2011)318).  The  mid-term  evaluations  for  the  External  Borders  Fund, 
European Return Fund and European Fund for the Integration of Third-country 
Nationals will be shortly launched in inter-service consultation and the reports are 
expected to be published in autumn 2011. 

EN 

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Observations from committee on Culture and Education 

108. 

(European  Parliament,  §245)  The  EP  urges  the  Commission  (and  the  Executive 
Agency  and  national  agencies)  to  continue  their  work  on  flexible  procedures  and 
further reducing payment delays 

Commission's response: 

The  Commission  accepts  the  request  and  it  has  already  been  addressed  in  the 
meantime. 

Payment  delays  are  regularly  reported  to  senior  management  and  closely 
monitored.  Appropriate  actions  are  taken  when  necessary.  This  has  resulted  in 
average payment delays in 2011 that are below 25 days. 

EN 

75 

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Observations from committee on Environment, Public Health and Food Safety 

109. 

(European  Parliament,  §253)  The  EP  urges  the  Commission  to  develop  further 
assistance  to  the  Member  States  in  the  estimation  process  as  concerns  emergency 
funds and funds related to the occurrence of disasters 

Commission's response: 

The Commission has taken the requested action. 

As  for  the  EU  Solidarity  Fund,  all  relevant  information  can  be  found  on  DG 
REGIO's website:  

http://ec.europa.eu/regional_policy/thefunds/solidarity/index_en.cfm.  

There, detailed guidance is given on how to apply for the fund. 

If  national  authorities  of  the  affected  Member  State  decide  to  submit  an 
application  (no  later  than  10  weeks  after  the  occurrence  of  the  first  damage)  the 
Commission  provides  on  request  the  necessary  legal  and  procedural  advice. 
Member  States  that  wish  to  apply  are  strongly  recommended  to  establish  early 
direct contacts with DG REGIO that can offer a range of advice that will help to 
speed  up  the  application  procedure  as  much  as  possible.  A  preparatory  meeting 
between the body preparing the application and the Commission can be set up. It 
needs  to  be  noted  that  the  estimation  of  total  direct  damages  lies  in  the 
responsibility of the national authorities and/or the body preparing the application. 
The Commission will do an assessment of the plausibility of the damage estimate 
that  is  presented  but  has  no  access  to  the  required  technical  details  that  would 
allow to provide assistance to the damage assessment itself. 

110. 

(European Parliament, §256) The EP calls on the Commission to continue its efforts 
to  improve  administrative  procedures  which  have  an  impact  on  the  implementation 
of commitment and payment appropriations 

Commission's response: 

DG ENV has revised its intranet on public procurement, developed new reference 
documents  and  intensified  awareness-raising  training  for  both  operational  and 
financial  officers.  Actions  agreed  in  the  detailed  management  plan  now  have  a 
target date for launching the appropriate procedure. Those target dates are closely 
monitored  and  a  monthly  subject  of  the  Directors'  Meeting.  Financing  decisions 
are  made  at  an  earlier  stage,  which  also  allows  for  earlier  publication.  It  is  the 
intention  to  have  a  first  financing  decision  for  2012,  covering  100%  of  the 
amounts  proposed  in  the  DB  (excluding  new  pilot  projects  and  preparatory 
actions) in order to allow launching the actions as soon as possible in the previous 
year. This will also improve payment implementation. 

111. 

(European  Parliament,  §258)  The  EP  encourages  all  parties  concerned  at  the 
agencies and in the Institutions to improve mutual communication and work harder 
at public relations 

EN 

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Commission's response: 

The  Commission  started  to  take  the  requested  action  and  will  continue  with 
measures to that effect in the coming years. 

The  measures  related  to  communication  with  agencies  include  regular  bilateral 
meetings  several  times  a  year,  mutual  participation  in  committees  and  networks, 
co-ordination of external communication as well as regular internal reporting. 

With  regard  to  public  relations,  DG  SANCO  drafted  a  Communication  Strategy 
including an action plan communicated to the Commissioner in November 2010. 

In  addition,  DG  SANCO  continues  its  efforts  per  programme  to  connect  with 
stakeholders: 

(1)  for  the  consumer  programme,  new  initiatives  are  e.g.  campaigns  like  the  one 
for the European Consumer Centre's Network which will take place between June 
and October 2011, awareness raising initiatives like the pan-European initiative in 
July 2011 concerning air passenger rights. 

(2)  for  the  public  health  programme,  the  enhanced  website  has  all  the  linguistic 
versions on-line; in 2010 it reached the top 20 of EUROPA's websites.  As a new 
initiative the crisis communication website was launched on 18 January 2011. 

Since  2010,  the  Executive  Agency  for  Health  and  Consumers  (EAHC)  is  in  a 
position to generate and disseminate the first available project based information 
on  the  public  health  programme  (2008-2013)  through  fact  sheets,  brochures  and 
thematic videos. 

112. 

(European  Parliament,  §259)  The  EP  urges  the  Commission  DG  SANCO  and  DG 
ENV  to  annually  report  to  Parliament's  respective  committees  within  the  discharge 
procedure  on  the  efficiency  and  effectiveness  of  the  projects  and  programmes 
implemented 

Commission's response: 

The  Commission  started  to  take  the  requested  action  and  will  continue  with  the 
measures to that effect in the coming years. 

For the public health programme, an annual report on its implementation in 2009 
is  currently  being  finalised  and  will  be  made  available  for  the  next  discharge 
procedure. 

However, as most actions of both the consumer and the public health programme 
have a multi-annual character, their efficiency and effectiveness are best evaluated 
over  a  number  of  years  rather  than  annually.  To  this  end,  mid-term  and  ex-post 
evaluations are regularly conducted and made available to the discharge authority. 

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Observations from committee on Foreign Affairs 

113. 

(European Parliament, §265) The EP invites DG ECHO to report on its experience 
with the implementation of the Food Facility in its Annual Activity Report for 2010 

Commission's response: 

Main figures on the implementation of the Food Facility are included in Europe 
Aid  Co-operation  Office  Annual  Activity  Report  for  2010.  More  detailed 
information  on  the  implementation  of  the  Food  Facility  is  available  in  the  2011 
Annual  Report  on  the  European  Union's  development  and  external  assistance 
policies on EuropeAid website:  

http://ec.europa.eu/europeaid/multimedia/publications/documents/annual-
reports/2011/europeaid_annual_report_2011_en.pdf. 

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Observations from committee on Regional Development 

114. 

(European Parliament, §266) The EP calls for greater rules simplification and more 
technical support to enable the Member States and regions to ensure more effective 
implementation;  points  out  that  regional  authorities  must  be  given  the  technical 
knowledge and skills by the Commission or  by the Member States that will enable 
them to improve the efficiency and effectiveness of the resources made available to 
them 

Commission's response: 

The Commission is taking the requested action. It intends to take measures to that 
effect  before  31  December  2012,  as  soon  as  the  need  for  additional  guidance  is 
identified with the Member States. 

The  Commission  intends  to  pursue  its  simplification  efforts  when  preparing  its 
proposal for the next regulatory framework applying to Structural Funds.  

For  the  2007-2013  period  the  Commission  has  made  a  significant  upfront 
investment  in  terms  of  guidance  (45  guidance  notes  have  been  discussed  and 
agreed with Member States), preventive training and support to the Member States. 
It will maintain its efforts in this respect, for example through the preparation of 
guidance  for  the  audit  authorities  and  guidance  on  financial  engineering 
instruments,  and  takes  note  of  the  Parliament's  request  to  intensify  its  efforts. 
Nonetheless,  it  recalls  that  technical  assistance  monies  are  also  provided  to 
Member States for them to develop their administrative capacity. 

115. 

(European Parliament, §267) The EP recommends the simplification and reduction 
of public procurement rules in order to reduce the overall incidence of errors 

Commission's response: 

Following the consultation launched with the Green Paper on the modernisation 
of EU public procurement policy, the Commission will make legislative proposals 
by  the  end  of  the  year,  with  a  view  to  simplifying  and  updating  the  European 
public procurement legislation. 

116. 

(European Parliament, §268) The EP asks for further details on missing information 
with regard to reimbursements in 2009 

Commission's response: 

The Commission has taken the requested action. 

The  Annual  Activity  Reports  for  2010  of  DG  EMPL  and  REGIO  provide  for  the 
full  list  of  interruption  of  payments  adopted  in  2010  and  2011  until  the  date  of 
issuance of the AARs as well as financial corrections for 2010 and cumulatively. 
Furthermore,  Note  6  to  the  Commission's  annual  accounts  includes  detailed 
information on all reimbursements, recoveries and financial corrections. 

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The  Commission  has  transmitted  to  the  Parliament  (CONT  Committee)  detailed 
information on all actions undertaken in the framework of the 2008 Action Plan in 
structural  actions  and  in  particular  on  decisions  on  suspensions  and  financial 
corrections, and has satisfied all requests for information. 

In addition, Commissioner Semeta has transmitted to the Parliament (CONT)  on 
24 February 2011 and in March 2011 additional requested information including 
a  memorandum  on  financial  corrections  and  recoveries  for  2009  and  previous 
years. 

117. 

(European  Parliament,  §268)  The  EP  asks  the  Commission  to  propose  a  penalty 
system  in  case  information  provided  does  not  allow  the  Commission  to  establish 
legality and regularity 

Commission's response: 

The Commission will not be taking the requested action. 

The reason for that is that the current regulatory framework does not provide for 
penalties,  but  for  financial  corrections,  as  corrective  measures  to  restore  the 
regularity of expenditures and to protect the EU budget. 

The possibility to interrupt payments and impose financial corrections also acts as 
an incentive for the Member State to improve the management and control systems 
and implement the necessary financial corrections. Indeed in case a Member State 
applies  the  financial  correction  itself,  it  has  the  incentive  to  act  fast,  because 
otherwise  it  penalises  itself  (outstanding  payments  are  still  blocked  and  risk 
automatic  de-commitment  under  the  N+2/3  rule).  Finally  if  the  correction  is 
imposed  by  the  Commission  through  a  formal  decision,  it  represents  a  net 
reduction of allocations available for the Member State. 

118. 

(European  Parliament,  §270)  In  the  context  of  the  revision  of  the  Financial 
Regulation, the EP stresses the need to clarify rules and management schemes under 
shared management, and in respect of cohesion policy that this clarification shall be 
to  the  maximum  extent  possible  in  order  to  avoid  contradictions  to  the  Financial 
Regulation 

Commission's response: 

The Commission's proposal for a revised Financial Regulation COM (2010) 815 of 
22/12/2010 included proposals to clarify and strengthen the provisions on shared 
management. The inter-institutional discussion is currently ongoing. 

119. 

(European  Parliament,  §271)  The  EP  calls  on  the  Commission  and  the  Member 
States to consider the advisability of developing the 'contract of confidence' principle 
so  as  to  be  able  to  scale  down  checks  on  systems  that  have  proved  their  worth  in 
combating errors and fraud 

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Commission's response: 

The  Commission  is  taking  the  requested  action.  It  intends  to  report  on  these 
measures in the next Annual Activity Reports of the Directors General. 

Through the single audit principle, the 2007-2013 regulatory framework intends to 
allow an enhanced co-operation between the Commission and the audit authorities 
of the Member States (Art. 73 of Regulation 1083/2006) in order to make the best 
use  possible  of  resources  and  to  avoid  unjustified  duplication  of  work.  As  the 
concept of single audit also implies the obligation of re-performance of audits of 
the  lower  level,  in  order  to  be  able  to  rely  on  it,  Commission  auditors  have 
effectively  re-performed  national  audits  on  operations  and  systems  in  the 
framework of their review of the Member States audit authorities since 2009. The 
preliminary  results  of  this  review  were  reported  in  the  2010  Annual  Activity 
Reports, and roadmaps to the implementation of Art. 73 (single auditing) presented 
and discussed with audit authorities in 2009 and 2010. 

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Part I - Special report N° 15/2009 on "EU assistance implemented through United 
Nations organisations: decision-making and monitoring" 

120. 

(European  Parliament,  Court  of  Auditors'  special  reports,  §7)  The  EP  calls  on  the 
Commission  to  draw  up  clear  selection  criteria  and  processes  which  guarantee  the 
choice of the most efficient and effective aid delivery mechanisms in every case 

Commission's response: 

DEVCO  is  currently  updating  and  consolidating  its  three  core  operational 
guidance  (PCM,  SPSP  and  BS)  into  one  overall  guidance  for  Project  and 
Programme  Cycle  Management  which  will  include  more  structured  guidance  for 
context  analysis  at  the  country  and  sector  level  that  will  feed  into  a  risk 
management  framework  allowing  authorising  officers  to  take  more  informed 
decisions  on  the  most  appropriate  aid  implementation  modalities  to  achieve 
objectives. 

121. 

(European  Parliament,  Court  of  Auditors'  special  reports,  §8)  The  EP  calls  on  the 
Commission to monitor more thoroughly UN-implemented aid projects to ascertain 
their actual impact and cost-effectiveness 

Commission's response: 

The  Commission  is  monitoring  UN-implemented  projects  in  a  number  of  ways. 
Result  oriented  monitoring  is  based  on  sampling,  with  the  coverage  varying 
depending  on  factors  such  as  project  size  and  accessibility  to  the  project  at  field 
level (due to security and other considerations). The coverage of projects may also 
vary  by  region.  The  Commission  has  also  initiated  the  development  of  joint 
monitoring methods which could be carried out with UN agencies. In addition, the 
EC succeeded in obtaining further assurance through audit work performed by the 
UN.  At  the  last  FAFA  Working  Group  (08/04/2011)  it  was  concluded  that,  in 
future the UN would inform the EC of internal and external audits undertaken or 
planned by the UN. During the meeting, UN entities were encouraged by their own 
members  to  share  summaries  of  the  internal  audit  reports  with  the  donors.  The 
actual  policy  of  the  UN  organisations  as  to  whether  such  summaries  could  be 
shared  with  the  donors  differs  widely  and  is  ultimately  a  decision  for  their 
respective  Governing  Boards.  UNDP's  Excecutive  Board  recently  took  a  decision 
in  this  direction,  opening  up  internal  audits  to  donors  and  not  only  to  UNDP 
Member  States.  The  Commission  believes  that  the  example  of  the  largest  EC 
partner  may  be  followed  by  other  UN  entities  in  the  future.  Some  audit  reports 
have already been received. 

122. 

(European  Parliament,  Court  of  Auditors'  special  reports,  §14)  The  EP  urges  the 
Commission  to  increase  the  amount  of  information  on  the  implementation  of  the 
EDF  at  national  and  regional  level  in  the  ACP  countries  and  to  ensure  better 
visibility for all Union-funded activities overseas 

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Commission's response: 

In the ACP countries, we will raise awareness on the implementation of the EDF 
through communication activities carried out at delegation level or from HQ e.g. 
through the EU-Africa partnership website. 

EN 

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Part II - Special report N° 17/2009 on "Vocational training actions for women co-
financed by the European Social Fund" 

123. 

(European  Parliament,  Court  of  Auditors'  special  reports,  SR  §20)  The  EP 
recommends  that,  in  future,  indicators  be  more  focussed  on  gender  equality,  that 
clear targets be established and that reliability of information be improved to ensure 
that  evaluations  can  be  carried  out  effectively  by  the  implementing  authorities,  the 
Member States and the Commission 

Commission's response: 

The  quality  of  indicators  is  constantly  improving.  This  has  been  one  of  the 
Commission's  major  concerns  for  the  2007–13  programmes.  Monitoring  of 
implementation  of  the  2007–13  programmes  is  enhanced  by  using  agreed 
indicators and the new SFC-2007 monitoring IT system. 

For the 2000-2006 programmes, the Commission launched a study to analyse the 
relevance  and  reliability  of  information  in  view  of  the  ex-post  evaluation  2000-
2006.  This  study  was  completed  in  July  2008  and  concluded  that  there  were 
important  information  gaps  in  view  of  the  ex-post  evaluation  of  the  ESF  (2000-
2006). 

The  provisions  of  the  General  Regulation,  and  of  the  "Indicative  Guidelines  on 
Evaluation  Methods:  Monitoring  and  Evaluation  indicators"  addressed  to  the 
Member  States  in  view  of  the  preparation  of  their  Operational  Programmes, 
appear to be in line with the recommendations of the ex-post evaluation of the ESF 
(2000-2006) which was finalised and published in December 2010. 

In  close  consultation  with  the  Member  States,  the  Commission  has  developed  a 
number of output and results indicators. This indicators list will be inserted either 
in  the  future  ESF  Regulation  or  in  the  Implementing  Regulation  as  common 
indicators, against which all Member States and all OP have to report. 

In a recent Commission evaluation study  on the ESF support to gender equality, 
an index on ESF policy efforts towards gender equality was developed and applied 
to each Member State. This index was compared to the Gender Equality Index for 
each  Member  State  and  provided  a  useful  analysis  by  comparing  the  state  of 
development of gender equality and the way ESF is supporting gender equality in 
each country. In  the follow-up  note on this evaluation  study, the  ESF  legislation 
and  policy  unit  indicated  that  this  analysis  could  be  useful  in  the  ongoing 
monitoring  of  the  current  programming  period  and  in  the  future  negotiations  of 
the OPs in 2013. 

124. 

(European Parliament, Court of Auditors' special reports, SR §21) The EP asks the 
Commission  to  continue  to  verify  the  establishment  by  the  Member  States  of 
appropriate  and  feasible  indicators  in  order  to  ensure  that  reliable  data  is  collected, 
thereby  allowing  meaningful  conclusions  to  be  drawn  on  the  efficiency  and 
effectiveness  of  co-financed  actions.  The  EP  asks  to  be  regularly  informed  of 
progress achieved 

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Commission's response: 

Art. 37(1) of the General Regulation stipulates that Operational Programmes shall 
set  out  a  limited  number  of  output  and  result  indicators  linked  with  quantified 
targets.  The  2007-2013  OPs  thus  include  output  and  result  indicators.  These 
indicators are set at the level of OP priority axes. On the basis of these indicators, 
if the provided data are sound and timely inserted in the IT system SFC2007, the 
Commission  measures  progress  in  relation  to  the  baseline  situation  and  the 
achievement of the targets of the priority axes. 

125. 

(European Parliament, Court of Auditors' special reports, SR §23) The EP calls on 
the  Commission  to  continue  to  promote  vocational  training  actions  specifically  for 
women 

Commission's response: 

In  line  with  the  Europe  2020  Strategy  and  the  Employment  Guidelines, 
investments in skills will be one of the main priority areas for ESF intervention in 
the Commission's proposals for the programming period post 2013. In accordance 
with  their  National  Reform  Programme  and  taking  into  account  their  country 
specific  recommendations,  Member  States  will  be  required  to  focus  their  ESF 
investments  on  these  policy  areas  where  the  needs  are.  This  can  include 
investments in vocational training actions for women. 

126. 

(European Parliament, Court of Auditors' special reports, SR §24) The EP urges the 
Commission  to  follow  up  on  the  situation  risen  by  the  ECA  in  the  Annual  Report 
concerning  undue  payments  in  the  implementation  of  the  Daphne  II  project;  and 
ensure proper implementation of the Daphne programme in the future 

Commission's response: 

The  case  mentioned  by  the  Court  in  its  2009  Annual  Report  concerns  certain 
unjustified reimbursements in favour of a beneficiary of a grant in the framework 
of the DAPHNE programme. These funds are being recovered by the Commission 
services. 

In  addition,  DG  JUST  has  adopted  and  is  putting  in  place  a  specific  action  plan 
aimed  at  reducing  the  errors  found  as  a  result  of  an  increased  number  of  audits 
during  the  years  2010  and  2011.  The  risk  of  error  is  further  reduced  by  better 
clarification of eligibility, management and payment rules for grants. 

The action plan is published under point 3.1.3 of the AAR of DG JUST and can be 
consulted via: 

http://ec.europa.eu/atwork/synthesis/aar/doc/justice_aar.pdf. 

127. 

(European Parliament, Court of Auditors' special reports, SR §25) The EP reiterates 
its  demand  to  the  Commission  and  the  Court  of  Auditors  that  the  information  on 
gender  mainstreaming  policies  and  gender-specific  data  be  included  in  the  budget 
discharge report 

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Commission's response: 

The Commission has taken the recommended action. 

The  Commission  has  presented  a  Strategy  for  equality  between  women  and  men 
(2010-2015) on 21 September 2010 (COM(2010) 491 final). 

Concerning  the  annual  budget,  the  Commission  has  already  taken  appropriate 
measures  ensuring  reporting  on  gender  issues,  when  available,  by  exploiting 
existing tools, structures and procedures. Starting from the preparation of the 2010 
Preliminary Draft Budget, Commission services have been instructed to integrate, 
when appropriate, gender-related information in the Activity Statements justifying 
the budget proposal. Related trainings have included specific guidelines as to how 
to introduce gender-related information in the budget proposal, namely as specific 
objectives  and/or  result  indicators.  As  a  result,  Commission  services  concerned 
have  produced  gender-specific  information  and  used  it  to  justify  the  relevant 
budget proposals. 

Considering that this practice has been maintained during the preparation of 2011 
and  2012  Draft  Budgets,  thus  for  a  third  year  running,  it  can  be  concluded  that 
gender  issues  are  now  integrated  in  the  budget  process  and  this  action  can  be 
considered as completed. 

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Part III - Special report N° 1/2010 on "Are simplified customs procedures for imports 
effectively controlled?" 

128. 

(European Parliament, Court of Auditors'  special reports, SR §28) The  EP  expects 
the  Commission  to  complete  its  guidelines  for  ex-post  audits  without  any  further 
delay and at the latest by the end of 2011 

Commission's response: 

The  Commission  is  taking  the  requested  action  and  continues  to  work  on  its 
guidelines  for  ex-post  audits,  in  particular  via  a  Customs  2013  Project  Group  on 
"Single Authorization for simplified procedures" with a view to complete them by 
end of 2011. 

129. 

(European Parliament, Court of Auditors' special reports, SR §29) The EP calls on 
the Commission to monitor thoroughly the implementation of the framework by the 
Member States 

Commission's response: 

Progress  will  be  monitored  through increased  monitoring  visits  in  all  Member 
States which have started in 2010 and will end in 2013. 

The Commission will examine the implementation of this framework in the course 
of its future inspections. 

130. 

(European Parliament, Court of Auditors' special reports, SR §30) The EP calls on 
the  Commission  to  further  investigate  the  effectiveness  of  controls  for  simplified 
procedures  in  the  Member  States,  and  in  particular  to  investigate  progress  in  the 
conduct by the Member States of ex-post audits, and to present the results of such an 
investigation  to  Parliament  by  the  end  of  2011  in  respect  of  at  least  half  of  the 
Member  States  and  by  the  end  of  2012  in  respect  of  the  remainder  of  the  Member 
States 

Commission's response: 

The Commission is taking the requested action and intends to present the results to 
the European Parliament within set deadlines. 

131. 

(European Parliament, Court of Auditors' special reports, SR §32) The EP calls on 
the  Commission  to  provide  Parliament  with  estimates  of  losses  in  Traditional  Own 
Resources as a result of the current ineffective controls for simplified procedures in 
the Member States 

Commission's response: 

The overall materiality and financial impact of the errors detected by the Court in 
the  9  audited  Member  States,  around  €900  000,  was  low.  In  addition,  the  final 
financial impact may be even lower as the traders concerned may yet provide the 

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supporting  documentation  that  was  missing  during  the  Court's  audit  (The 
Commission's follow-up of these cases is ongoing.) 

132. 

(European Parliament, Court of Auditors' special reports, SR §33) The EP calls on 
the Commission to analyse the Dutch idea for pre-authorisation audits, which were 
found by the Court of Auditors to fully correspond to the Court's control model, and 
to  recommend  the  use  of  that  model  in  other  Member  States  and  to  inform 
Parliament on progress made by September 2011 

Commission's response: 

The  Commission  has  taken  the  requested  action.  The  Dutch  approach  to  pre-
authorisation  audits  has  been  studied  during  the  monitoring  visit  to  the 
Netherlands,  which  took  place  from  27  to  29  October  2010.  The  monitoring  visit 
and the input provided by the Netherlands helped to clarify the main concepts of 
the  Dutch  approach  (a  risk  management  system  based  on  a  client  management 
approach,  a  pre-authorisation  audit, continuous  monitoring  actions,  a list  of  risk 
indicators,  statistical  sampling  methods,  monitoring  of  its  own  activities  by  the 
economic  operator  and  of  its  internal  control  measures  by  the  customs 
administration  and  an  audit  performed  by  third  parties,  post-clearance  audits).  
The salient ideas of the Dutch approach will be incorporated in the next version of 
the  guidelines  on  Simplified  procedures/Single  Authorisation  for  Simplified 
procedures 
6).  
The  Commission  has  informed  the  Parliament  of  its  findings  via  a  letter  of  13 
October 2011. 

(revision 

133. 

to 

investigate 

in  more  detail 

(European Parliament, Court of Auditors' special reports, SR §34) The EP urges the 
Commission 
issue  of  abuse  of  "super-
simplifications"  (notification  waivers)  and  to  provide  Parliament  with  detailed 
figures on the frequency of super-simplifications per Member State by the end of the 
discharge  procedure  for  2009.  The  EP  also  calls  on  the  Commission  to  define  in 
more  detail  the  special  circumstances  under  which  traders  may  benefit  from  the 
notification waivers 

the 

Commission's response: 

The  Commission  in  its  letter  of  5  May  2011  provided  the  Parliament  with  the 
information  on  the  number  of  customs  authorisations  for  simplified  procedures 
with a notification waiver granted in the Member States. 

Criteria 
the  Simplified 
Procedures/Single Authorisation for Simplified Procedures (SP/SASP) guidelines. 

the  notification  waiver  will  be  drafted 

for 

in 

134. 

(European Parliament, Court of Auditors' special reports, SR §35) The EP calls on 
the Commission to examine by February 2011 the cases of Belgium, France, Ireland, 
Sweden  and  United  Kingdom,  where  traders  were  unable  to  provide  the  requested 
customs documentation in the framework of ex-post audits, and to inform Parliament 
of actions taken by those Member States in order to remedy the situation before the 
end of the discharge procedure for 2009 

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Commission's response: 

All the findings observed by the Court in its report are currently being followed-up 
under  the  Commission's'  normal  follow-up  procedure  and  the  Commission  is 
prepared to inform the Parliament of the outcome of this follow-up. 

An interim report was sent to the Parliament in April 2011. 

135. 

(European Parliament, Court of Auditors' special reports, SR §36) The EP calls on 
the  Commission  to  inform  Parliament  as  to  the  steps  taken  to  remedy  a  coherent 
Union  policy  of  sanctions  to  be  imposed  by  Member  States  on  traders  who  act  in 
breach of the rules on the simplified procedures 

Commission's response: 

In  Article  21  of  the  Modernized  Customs  Code,  sanctions  are  prescribed  for 
operators that do not comply with the rules. In order to avoid trade diversion and 
unequal treatment, it would be desirable that the level of sanctions is equivalent in 
all Member States. 

The Commission is currently analysing the situation. A project group has assessed 
the current situation in the Member States of national customs penalty regimes in 
the field of criminal and non criminal offences and penalties in customs matters. It 
is  expected  to  complement  this  work  by  conducting  a  study  ("Study:  Data 
collection and comparative analysis concerning certain customs matters") and an 
in-depth analysis of the impact of the different sanction regimes. 

The  Commission  will  evaluate  the  need  for  action  on  the  basis  of  both  of  these 
documents.  In  order  to  anticipate  a  possible  need  for  action  it  has  included  a 
"Legislative  proposal  on  the  approximation  of  customs  infringements  and 
penalties  (2012)"  in  the  table  attached  to  the  Action  Plan  for  Stockholm 
Programme, under the title: "Developing a core of common minimum rules". 

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Part IV - Special report N° 2/2010 on "The effectiveness of the Design Studies and 
Construction of New Infrastructures support schemes under the Sixth Framework 
Programme for Research" 

136. 

(European Parliament, Court of Auditors' special reports, SR §40) The EP calls on 
the  Commission  to  further  clarify  the  objective  of  reaching  a  critical  mass  and  the 
way it was promoted for technological development related to infrastructures 

Commission's response: 

In a context of scientific global competitiveness, the necessary efforts in the field of 
research  infrastructures  are  beyond  the  capacities  of  individual  Member  States. 
The actions of the Commission have therefore been focussed on the integration of 
resources (existing and new) to allow attractiveness of Europe and its capacity to 
face the grand challenges. 

This has been achieved recently through e.g. the creation of a European network 
of  biobanks  (BBMRI),  the  European  contribution  to  understanding  the  oceans 
(e.g. EURO-ARGO), the monitoring of the ageing of population (SHARE), as well 
as  support  to  large-scale  facilities  of  global  relevance  (X-FEL,  European 
Spallation Source, FAIR). 

137. 

(European Parliament, Court of Auditors' special reports, SR §42) The EP calls on 
the  Commission  to  clarify  the  terms  "European  dimension"  and  "European  added 
value" further, in a specific and measurable manner and in this context, to clarify in 
which way the funds spent under the CNI scheme 

Commission's response: 

The  "European  dimension"  of  a  project  funded  under  the  CNI  scheme  was 
ensured by requesting a level of participation and interest beyond purely national 
or bilateral co-operations. 

The  "Work  Programme"  clearly  stated  that  "European  added  value  should  be 
demonstrated in terms of an improved attractiveness for, and/or improved services 
to, the research community in Europe (e.g. in terms of a wider accessibility of the 
proposed  infrastructure,  of  a  more  advanced  technology,  of  a  more  flexible 
adaptability  to  interdisciplinary  studies,  of  a  better  connectivity  to  the  research 
community)". 

138. 

(European Parliament, Court of Auditors' special reports, SR §45) The EP notes that 
there  is  a  need  for  practical  steps  to  be  taken  by  the  Commission  to  adequately 
administer the complementarity aspect, by carrying out inter alia checks for double 
financing or ineligible co-financing 

Commission's response: 

Research  Funds  (FP)  and  Structural  Funds  (SF)  are  used  by  the  research 
infrastructure  stakeholders  in  a  complementary  manner.  SFs  are  used  for  the 

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construction and upgrade of facilities whereas the EC research funds are used in 
the ex-ante phase and/or during the operational phase. 

Regular meetings are organised between the Commission services to inform them 
about  projects  recommended  for  funding.  This  process  ensures  necessary  cross-
checking to avoid any possible double financing. 

The  FP7  financial  guidelines  raise  awareness  of  the  beneficiaries  on  the 
compatibility of FP7 projects with other sources of EU funding. 

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Part V - Special report N° 3/2010 on "Impact Assessments in the EU institutions: do 
they support decision-making?" 

139. 

(European  Parliament,  Court  of  Auditors'  special  reports,  SR  §51)  The  EP 
encourages  the  Commission  to  establish  measures  aimed  at  enhancing  the 
transparency of the IA planning process and believes that the Commission should not 
only  explain  the  reasons  why  an  IA  is  needed,  but  also  make  public  the  reasons 
behind any decisions not to carry out an IA (in particular in cases where its Impact 
Assessment Board has identified the need to carry out an IA) 

Commission's response: 

The Commission already performs as recommended by the European Parliament. 
The  Commission  publishes  Roadmaps  for  all  its  legislative  proposals.  In  these 
Roadmaps  the  responsible  Commission  services  provide  adequate  arguments  to 
justify  the  need  to  perform  an  impact  assessment  or  not.  This  is  then  subject  to 
further scrutiny by the Secretariat-General/Impact Assessment Board. If the latter 
identifies the need to carry out an impact assessment, the services have to comply. 

140. 

(European Parliament, Court of Auditors' special reports, SR §52) The EP is of the 
opinion that the IAs should cover all legislative initiatives, including simplification 
and comitology measures and invites all the parties involved to redefine the scope of 
the IAs during the next inter-institutional talks 

Commission's response: 

All  legislative  proposals  with  significant  impacts  are  covered  by  the  Impact 
Assessment  requirement,  including  simplification  and  comitology  measures.  For 
reasons of efficient use of scarce resources a general obligation for all proposals 
would not be proportionate, and the effort has to be focused where it matters the 
most. 

141. 

(European Parliament, Court of Auditors' special reports, SR §53) The EP urges the 
Commission to involve stakeholders, not only in the preparatory work of the IAs, but 
also to consult the interested parties on draft IA reports, and, following the approach 
taken by some OECD countries, to make draft IAs public 

Commission's response: 

The 2009 Impact Assessment guidelines stipulate that Commission services should 
encourage stakeholders to examine roadmaps and give early feedback on the plans 
for impact assessments. The new guidelines also introduced the requirement that 
stakeholders should be able to comment on a clear problem definition, subsidiarity 
analysis,  description  of  the  possible  options  and  their  impacts.  The  Impact 
Assessment Board will continue to check systematically the quality of the reporting 
of  the  results  of  the  stakeholder  consultation.  The  proactive  use  of  roadmaps 
available  for  all 
the  strengthened 
requirements  for  consultation  together  provide  for  improved  transparency  and 
these 
stakeholder 

involvement.  The  Commission  considers 

important  Commission 

initiatives  and 

that  under 

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circumstances, a consultation on a draft version of the impact assessment report is 
superfluous. 

142. 

(European  Parliament,  Court  of  Auditors'  special  reports,  SR  §54)  The  EP 
encourages  the  Commission  to  improve  the  planning  of  the  IA  process  in  order  to 
provide sufficient time for IAB scrutiny 

Commission's response: 

The  Commission  has  already  expressed  its  awareness  that  further  efforts  by  the 
Commission services are necessary to ensure proper planning and sufficient time 
for  the  Impact  Assessment  Board  scrutiny  process.  The  2009  impact  assessment 
guidelines  have  introduced  new  requirements  on  this.  The  guidelines  also  make 
clear that sufficient time needs to be foreseen in case the Impact Assessment Board 
asks for further work or for the revised impact assessment to be resubmitted. In the 
communication  on  the  working  Methods  of  the  Commission  for  2010–14  it  is 
explicitly highlighted that the planning of adoptions should take full account of the 
need to complete the impact assessment process in good time and that in principle 
the  positive  assessment  of  the  Impact  Assessment  Board    is  required  before  an 
inter-service consultation can be launched. 

143. 

(European Parliament, Court of Auditors' special reports, SR §56) The EP notes the 
critical comments on the lengthy and technical nature of the IAs, as well as on the 
complexity  of  language  used  and  believes  that  improvement  in  those  areas  would 
enhance the usefulness of the IAs 

Commission's response: 

The Guidelines require Commission services to present their Impact Assessments 
in  an  accessible  way  to  non-expert  readers,  to  serve  as  an  adequate  support  for 
decision-making by the Institutions. This is subject of close scrutiny by the Impact 
Assessment  Board.  All  Impact  Assessments  are  accompanied  by  a  concise 
Executive  Summary  in  which  the  main  issues  of  relevance  in  the  impact 
assessment  are  presented  for  a  broader  public.  More  technical  background  is 
provided in Annexes that can also be accessed by interested parties. 

144. 

(European Parliament, Court of Auditors' special reports, SR §57) The EP notes that 
the independence of IAs as they are currently carried out is questionable due to the 
fact  that  the  members  of  the  Commission's  Impact  Assessment  Board  (IAB),  are 
appointed by, and subject to the instructions of, the Commission President 

Commission's response: 

The Impact Assessment Board is empowered by the Commission President to carry 
out an independent assessment of the quality of Commission impact assessments. 
It  receives  no  instructions  related  to  the  substance  of  the  cases  under  its  review 
from the President.  The special report of the European Court of Auditors found 
that  the  Impact  Assessment  Board  is  contributing  to  the  quality  of  the 
Commission's impact assessment. 

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145. 

(European Parliament, Court of Auditors' special reports, SR §59) The EP stresses 
that  IAs  should  not  take  place  only  before  the  adoption  of  a  legislative  text  but 
should  also  be  carried  out  after  its  adoption  in  order  to  evaluate  more  accurately 
whether the objectives of a law have actually been achieved and whether a legal act 
should be amended or retained 

Commission's response: 

The Commission identified the need to carry out ex-post evaluations for legislation 
in  its  communication  on  ‘Responding  to  strategic  needs:  reinforcing  the  use  of 
evaluation’  (SEC(2007)  213  of  21    February  2007).  Since  January  2009,  the 
Commission’s  impact  assessment  system  and  evaluation  system  have  been  placed 
together  under  the  same  "Better  Regulation  Directorate"  of  the  Secretariat-
General  to  ensure  that  the  strategic  and  operational  synergies  between  the  two 
systems are fully exploited. In the political guidelines for the new Commission of 
September 2009, President Barroso announced his intent to intensify efforts on ex-
post evaluation. The aim is to check whether the Commission’s proposals deliver 
what they promise and to enable the Commission to revise and correct them where 
they  fail  to  work  as  expected.  Links  between  impact  assessment  and  ex-post 
evaluations  will  be  reinforced.  The  evaluation  should  be  a  reality  check  for  the 
previous  impact  assessment.  Over  time  a  full  ex-post  evaluation  will  become  a 
requirement for the revision of important legislative acts. 

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Part VI - Special report N° 4/2010 on "Is the design and management of the mobility 
scheme of the Leonardo da Vinci Programme likely to lead to effective results?" 

146. 

(European  Parliament,  Court  of  Auditors'  special  reports,  SR  §64)  The  EP  is 
concerned by the Commission's inability to assess how the objectives are being met 
three years into the programme 

Commission's response: 

The  Commission's  revised  proposal  was  adopted  by  the  LLP  Committee  at  its 
meeting of 17 June 2010. On this basis, the relevant data will be matched with the 
now  established  indicators.  The  Commission  will  provide  a  first  report  on  these 
indicators to the Committee in the course of 2011. 

147. 

(European Parliament, Court of Auditors' special reports, SR §65) The EP calls on 
the Commission to inform them  of the progress in establishing  a new user-friendly 
and  effective  partner-search  tool  which  would  address  applicants'  difficulties  in 
finding host partners in other countries 

Commission's response: 

The  Commission  partly  accepts  the  request.  The  Commission  discontinued  its 
previous  partner  finding  database  due  to  quality  assurance  problems.  While 
alternative  solutions  to  partner  search  mechanisms  are  currently  being  analysed, 
the  Commission  emphasises  that  the  lack  of  a  partner  search  database  does  not 
interfere with the successful implementation of the programme, as the demand by 
far exceeds the budget available to support Leonardo mobility projects. 

No tool will be developed for the current programme generation but the possibility 
will be considered as part of the preparation of the new programme generation. 

148. 

(European Parliament, Court of Auditors' special reports, SR §66) The EP calls on 
the  Commission  to  ensure  correct  assessment  of  applications  by  further  developing 
the  assessment  handbook  for  evaluators  and  by  integrating,  into  its  quality  and 
impact monitoring visits to participating countries assessment checks of applications, 
should the analysis of the added value of such checks prove positive 

Commission's response: 

The  Commission  is  working  on  further  developing  the  assessment  handbook  for 
evaluators in connection with the new on-line application and revised assessment 
form.  The  review  of  the  assessment  handbook  for  evaluators  of  LdV  mobility 
projects (annexed to the Guide for National Agencies) will be concluded in autumn 
2011 and any necessary revisions introduced. 

The  Commission  will 
recommendation no later than end of June 2012. 

inform  about 

the  progress 

in 

implementing 

this 

149. 

(European Parliament, Court of Auditors' special reports, SR §67) The EP calls on 
the  Commission  to  establish  a  comprehensive  system  for  the  measurement  of  the 

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impact of the programme and to improve the system for reporting on the results and 
effects  of  the  programme  and,  in  particular,  to  finalise  the  LLPLink  software 
application for reporting on impact measurement without further delay, and to keep 
Parliament informed of progress in that respect 

Commission's response: 

The  Commission  accepts  the  request  and  will  inform  about  the  progress  in 
implementing this recommendation no later than end of June 2012. 

150. 

(European Parliament, Court of Auditors' special reports, SR §68) The EP calls on 
the  Commission  to  address  the  weaknesses  of  controls  identified  in  the  Court  of 
Auditors' special report 

Commission's response: 

The Commission accepts this overall request which refers to individual requests for 
which the expected completion date is December 2011 or December 2014. 

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Part VII - Special report N° 5/2010 on "Implementation of the Leader approach for 
rural development" 

151. 

(European  Parliament,  Court  of  Auditors'  special  reports,  SR  §72)  The  EP  invites 
the  Commission  and  the  Member  States  to  ensure  that  the  Financial  Regulation  is 
fully  applied  by  members  of  the  LAG's  project  assessment  and  decision  making 
committees 

Commission's response: 

The Commission has taken the requested action. 

The  implementing  regulation  (Commission  Reg.  (EC)  No.  1974/2006  2006  of  15 
December  2006  laying  down  detailed  rules  for  the  application  of  Council 
Regulation (EC) No 1698/2005 on support for rural development by the European 
Agricultural  Fund  for  Rural  Development  (EAFRD))  has  been  amended  and 
includes  a  new  provision  asking  for  the  application  of  appropriate  rules  to 
guarantee transparency and to avoid situations of conflicts of interest with regard 
to the decision-making process. The amendment of the regulation was adopted on 
14 July 2011. 

The  Commission  also  promotes  good  practice  through  the  "Guide  on  the 
application  of  the  Leader  axis"  in  the  sub-chapter  on  the  project  selection 
procedure.  This  guidance  document  has  been  recently  updated  and  presented  to 
the Member States at the Rural Development Committee on 8 December 2010. 

152. 

(European Parliament, Court of Auditors' special reports, SR §73) The EP calls on 
the  Commission  to  ensure  a  clear  definition  of  the  notion  of  "interest  in  a  project"  
and  takes  the  view  that  detailed  minutes  of  all  decision  making  meetings  should 
become  the  norm,  to  allay  concerns  about  unfairness  in  project  selection  and  to 
reinforce transparency and neutrality in decision making 

Commission's response: 

The Commission has taken the requested action. 

The  implementing  regulation  (Commission  Reg.  (EC)  No.  1974/2006  2006  of  15 
December  2006  laying  down  detailed  rules  for  the  application  of  Council 
Regulation (EC) No 1698/2005 on support for rural development by the European 
Agricultural  Fund  for  Rural  Development  (EAFRD))  has  been  amended  and 
includes  a  new  provision  asking  for  the  application  of  appropriate  rules  to 
guarantee transparency and to avoid situations of conflicts of interest with regard 
to the decision-making process. The amendment of the regulation was adopted on 
14 July 2011. 

The  Commission  also  promotes  good  practice  through  the  "Guide  on  the 
application  of  the  Leader  axis"  in  the  sub-chapter  on  the  project  selection 
procedure.  This  guidance  document  has  been  recently  updated  and  presented  to 
the Member States at the Rural Development Committee on 8 December 2010. 

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153. 

(European Parliament, Court of Auditors' special reports, SR §74) The EP believes 
that, to ensure the "value-added" element of Leader, the Commission should further 
encourage LAGs to undertake outreach work to identify local actors that are able to 
develop more strategic projects in areas, such as currently happens in Mecklenburg-
Vorpommern (Germany) and Ireland 

Commission's response: 

The requested action has been taken. 

This  possibility  already  exists  and  is  available  to  all  Member  States  (support  for 
'animating the territory' (stimulating local interest)). It will be further encouraged 
for the next programming period. 

154. 

(European Parliament, Court of Auditors' special reports, SR §75) The EP calls on 
the Commission to introduce, without delay, measures that increase the transparency 
of  project  selection,  using  the  examples  of  Mecklenburg-Vorpommern  (Germany) 
and  Pays de la Loire (France) and believes that a system under which LAGs publish 
minutes of project selection meetings on their websites should be introduced 

Commission's response: 

The Commission has taken the requested action. 

The  implementing  regulation  (Commission  Reg.  (EC)  No.  1974/2006  2006  of  15 
December  2006  laying  down  detailed  rules  for  the  application  of  Council 
Regulation (EC) No 1698/2005 on support for rural development by the European 
Agricultural  Fund  for  Rural  Development  (EAFRD))  has  been  amended  and 
includes  a  new  provision  asking  for  the  application  of  appropriate  rules  to 
guarantee transparency and to avoid situations of conflicts of interest with regard 
to the decision-making process. The amendment of the regulation was adopted on 
14 July 2011. 

The  Commission  also  promotes  good  practice  through  the  "Guide  on  the 
application  of  the  Leader  axis"  in  the  sub-chapter  on  the  project  selection 
procedure.  This  guidance  document  has  been  recently  updated  and  presented  to 
the Member States at the Rural Development Committee on 8 December 2010. 

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Part VIII - Special report N° 6/2010 on "Has the reform of the sugar market achieved its 
main objectives?" 

155. 

(European Parliament, Court of Auditors' special reports, SR §79) The EP asks the 
Commission  why  the  big  sugar  producers  who  have  renounced  their  quotas  by 
accepting compensation from the restructuring fund as a financial incentive to leave 
the  sector  were  not  asked  to  provide  information  on  the  way  that  they  used  that 
compensation 

Commission's response: 

The requested action has been taken. 

The principle of the reform was to leave the final decisions for keeping, reducing 
or  abandoning  production,  against  the  background  of  a  future  characterised  by 
substantially lower prices, to the individual sugar companies. 

Financial  compensation  was  provided  for  companies  that  voluntarily  decided  to 
surrender quota. Against this background, information on the current profitability 
and  prospects  of  every  individual  sugar  producer  in  the  EU  was  not  relevant  for 
the purpose of implementing the reform. 

Moreover,  such  data  would  concern  confidential  aspects  of  private  business,  and 
comparisons  between  companies  based  thereon  would  not  be  exempt  from 
controversy. 

As regards the effects of the reform, the gains in competitiveness of the EU sugar 
industry  are  incontestable.  EU  sugar  producers  are  now  operating  in  an 
environment  with  substantially  lower  institutional  prices  and  production  is  more 
concentrated in high profitability regions. 

156. 

(European Parliament, Court of Auditors' special reports, SR §82) The EP calls on 
the  Commission  to  examine  whether  funds  provided  for  the  restructuring  scheme 
were  used  for  relocation  of  some  Union  factories  to  third  countries  that  receive 
preferential treatment from the Union 

Commission's response: 

The Commission will not be taking the requested action. 

The  purpose  of  the  restructuring  aid  was  to  help  those  companies  that  did  not 
consider  themselves  competitive  in  the  future  to  close  down  their  factories 
adequately. This includes not only the dismantling of industrial facilities but also 
the redeployment of the workforce and the environmental restoration of the site.  

To  receive  restructuring  aid  the  operator  must  present  a  restructuring  plan 
containing  detailed,  concrete  measures  whose  implementation  is  enforced  by 
national  authorities.  Only  companies  that  have  satisfactorily  implemented  these 
measures are entitled to receive payments. 

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It is nevertheless not the intention of the Commission to restrict the ability of EU 
sugar companies to invest within the EU or everywhere else. 

157. 

(European  Parliament,  Court  of  Auditors'  special  reports,  SR  §83)  The  EP  queries 
whether  the  Commission  took  any  measures  or  initiatives  during,  or  within  the 
context  of,  the  sugar  reform  in  order  to  ensure  that  reductions  in  the  price  of  bulk 
sugar would be passed on to the final consumer 

Commission's response: 

The Commission is taking the requested action. 

The  Commission  highlights  that  it  was  precisely  in  the  wake  of  the  2006  reform 
that a sugar price monitoring system was put in place, providing the market with 
enhanced transparency. 

In  order  to  shed  more  light  on  this  issue,  the  Commission  will  shortly  launch  a 
study on price transmission in the sugar sector. The procurement procedure is now 
under  preparation  and  a  contract  for  the  study  is  expected  to  be  awarded  by  the 
end of 2011. 

158. 

(European Parliament, Court of Auditors' special reports, SR §86) The EP calls on 
the Commission to give an indication of the impact of the diversification aid on the 
regions affected 

Commission's response: 

The Commission will be taking the requested action. 

The  Evaluation  of  CAP  measures  applied  to  the  sugar  sector  should  provide 
information  on  the  impact  of  the  diversification  aid  in  the  regions  affected  by 
restructuring. 

The publication of the evaluation is foreseen for the first quarter of 2012. 

159. 

(European Parliament, Court of Auditors' special reports, SR §87) The Commission 
should  propose  a  series  of  measures  to  remove  the  rigidities  and  constraints  in  the 
current  quota  system  which  affect  adversely  the  competitiveness  of  growers  and 
producers 

Commission's response: 

The Commission is taking the requested action. 

In  its  Communication  on  the  CAP  towards  2020  (COM(2010)  672  final),  the 
Commission  notes  that  the  current  regime  expires  by  2014/15  and,  in  order  to 
bring  about  increased  efficiency,  undertakes  to  examine  various  options  for  the 
future, including a non-disruptive end of the quotas at the date to be defined. As 
co-legislator, the European Parliament will be fully involved in this process. 

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Part IX - Special report N° 8/2010 on "Improving transport performance on Trans-
European rail axes: Have EU rail infrastructure investments been effective?" 

160. 

(European Parliament, Court of Auditors' special reports, SR §90) The EP calls on 
the  Commission  to  determine  the  definition  of  Priority  Projects  according  to 
demonstrable needs in terms of existing and anticipated rail services 

Commission's response: 

The Commission is taking the requested action. It agrees that the definition of the 
Priority Projects has not been based on an analysis of the actual and anticipated 
traffic  flows.  It  is  important  to  note,  however,  that  while  such  studies  have  been 
carried out, both for individual projects and for the network, they have yet to lead 
to conclusive results and so could not be used as such. The Commission considers 
that  providing  a  definitive  description  of  the  main  trans-European  rail  axes  is 
likely to be particularly difficult, as they are in a constant state of flux depending 
on  migration,  trade  patterns  and  the  geopolitical  context.  The  Commission, 
however,  also  shares  the  view  that  the  definition  of  the  main  network  (core  and 
comprehensive)  should  be  based  on  objective  criteria.  Therefore,  in  the  future, 
Priority  Projects  should  continue  to  be  based  on  political  agreement  between  the 
Council  and  European  Parliament,  but  relying  even  more  on  the  best  available 
evidence (e.g. the Trans-European Network for Transports Technical Database – 
TENtec  -  that  intends  to  establish  a  common  working  framework  for  the 
Commission,  the  TEN-T  Executive  Agency  and  the  Member  States,  as  well  as 
provides a common knowledge base for the TEN-T network). The TEN-T revision 
includes  an  examination  of  the  methodology  for  defining  the  future  TEN-T 
network. Moreover, when planning the future TEN-T network, all relevant aspects 
would  be  taken  into  account:  current  and  projected  traffic  flows,  economic  and 
social  cohesion  aspects.  The  European  infrastructure  policy  should  be  driven  by 
actual and future transport service needs and support the emergence of innovative 
infrastructure  development.  On  19  October  2011,  the  Commission  will  adopt  the 
proposal for new EU guidelines for the TEN-T. 

161. 

(European Parliament, Court of Auditors' special reports, SR §91) The EP calls on 
the  Commission  to  take  necessary  action  in  order  to  adapt  the  rail  infrastructure  to 
cater  for  trans-European  services  while  creating  missing  links  at  cross-border 
locations,  removing  bottlenecks  on  important  junctions  and  replacing  or  upgrading 
the old rail infrastructure 

Commission's response: 

The  Commission  is  taking  the  requested  action.  It  is  constantly  working  towards 
this  goal.  It  recognises  that  major  discrepancies  remain,  especially  between 
Western and Eastern Member States, and bottlenecks and missing links will have 
to  be  overcome  in  order  to  accomplish  an  efficient  rail  network  at  EU  level.  The 
ongoing  TEN-T  policy  revision  is  an  opportunity  for  unifying  the  continent  by 
developing effective links so that all Member States enjoy full access to the internal 
market. The future network will include projects which offer the highest European 
added  value  –  removing  bottlenecks,  tackling  the  missing  links  between  national 
networks – as well as innovative and intelligent projects. 

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The  Commission  also  concentrated  in  its  yearly  reporting  on  the  bottlenecks  and 
missing links (latest report: Priority Projects 2010 – A Detailed Analysis, available 
online at:  

http://ec.europa.eu/transport/infrastructure/european_coordinators/doc/progress_r
eport_longer_version_18jan2011_final2.pdf.  

The completion date is 2030. 

162. 

(European Parliament, Court of Auditors' special reports, SR §92) The Commission 
should  further  improve  cooperation  with  the  Member  States  in  order  for  legislative 
measures  regarding  rail  safety  and  passenger  rights,  market  opening  and 
interoperability  at  the  Union  level  to  be  successfully  transposed  into  national 
legislation 

Commission's response: 

The requested action has been taken. The Commission is already co-operating with 
the  Member  States  in  order  that  legislative  measures  regarding  rail  safety  and 
passenger  rights,  market  opening  and  interoperability  at  the  Union  level  are 
successfully transposed into national legislation. 

163. 

(European Parliament, Court of Auditors' special reports, SR §94) The EP urges the 
Commission to consult external rail infrastructure experts in order to better evaluate 
the technical aspects of proposed projects prior to their approval under the Cohesion 
Fund 

Commission's response: 

The  requested action  has  been  taken. In the 2007-2013 programming period,  the 
Commission  has  established  JASPERS,  together  with  the  EIB,  which  provides 
technical  assistance  to  the  new  Member  States  in  order  to  contribute  to  the 
improvement of the quality of projects at an early stage. It also has contracts with 
outside experts for technical advice in the appraisal of major projects. 

164. 

(European Parliament, Court of Auditors' special reports, SR §95) The EP stresses 
the need to promote better preparation of projects in order to reduce the risk of cost 
escalations  of  future  projects  influenced  by  unforeseeable  factors,  such  as 
unexpectedly  difficult  geographical  conditions,  and  environmental  protection 
requirements 

Commission's response: 

The  requested  action  has  been  taken.  The  Commission  agrees  on  the  benefits  of 
thorough  and  detailed  project  preparation.  The  Commission  would  like  to 
underline that, according to the new model of financing decisions for the TEN-T 
budget line for the period 2007-2013, the beneficiaries and project promoters have 
had  to  submit  a  Strategic  Action  Plan  (SAP)  detailing  how  the  project  will  be 
implemented,  including  in  terms  of  project  planning,  the  risk  management  plan 
and  project  governance  since  2009.  The  TEN-T  Executive  Agency  has  already 

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developed  guidelines  on  this  issue  and  is  working  on  the  exchange  of  good 
practices between beneficiaries. 

165. 

(European Parliament, Court of Auditors' special reports, SR §96) The EP asks the 
Commission to cooperate more closely with the Member States in order to make the 
necessary  improvements  in  future  planning  in  order  to  avoid  delays  before 
infrastructure becomes available for use 

Commission's response: 

The  requested  action  has  been  taken.  The  Member  States’  firm  commitment  is 
essential to deliver the key Priority Projects and they have been at the centre of the 
European  Union's  efforts  -  both  financially  and  in  terms  of  coordination.  The 
Commission  is  already  cooperating  closely  with  Member  States  to  make  the 
necessary  improvements  in  future  planning  and  in  particular,  identify  mature 
projects  which  can  be  implemented  without  delays.  Thus,  Member  States  are 
associated  and  their  opinions  taken  into  account  at  different  stages.  The 
Commission counts on the strong support from Member States in the policy review 
process  –  the  actual  network  planning,  the  drafting  of  the  Guidelines  and  the 
designing of the implementation tools. The Commission MFF proposal presented 
on 29 June 2011 contains a detailed list of projects, elaborated in close cooperation 
with Member states. 

166. 

(European Parliament, Court of Auditors' special reports, SR §98) The EP asks the 
Commission  to  better  assist  the  Member  States  in  making  progress  to  alleviate 
complications  which  would  facilitate  improvements  in  developing  trans-European 
transport  links  and  points  out  that  the  Union  needs  to  play  an  important  role  in 
promoting  the  interoperability  of  national  networks  along  with  efficient  financial 
support 

Commission's response: 

The requested action has been taken. The Commission is already assisting Member 
States  but  acknowledges  that  progress  towards  interoperability  is  slow.  Radical 
harmonisation is not possible, given that rail infrastructure and rolling stock have 
long lifetimes and the sector's investment costs need to remain realistic. 

Nevertheless,  the  amount  of  interoperable  infrastructure  and  rolling  stock  is 
increasing  and  the  number  of  derogations  requested  by  Member  States  from  the 
Commission's  implementing  legislation  setting  out  Technical  Specifications  for 
Interoperability  (TSI)  is  limited.  This  shows  that  the  existing  TSIs  are  being 
implemented  successfully.  This  will  benefit  both  TEN-T  and  Cohesion  policy 
funded projects. 

The Commission will continue to concentrate on the implementation of TSIs that 
will deliver significant benefits in the short and medium term, such as telematics 
applications  in  signalling,  freight  and  passenger  transport.  It  has  also  set  up 
corridor  organisations  to  identify  and  tackle  all  issues  that  hamper  the 
competitiveness of rail freight along axes. 

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167. 

(European Parliament, Court of Auditors' special reports, SR §99) The EP calls on 
the  Commission  to  maintain  the  role  currently  played  by  the  coordinators  and  to 
evaluate  the  possibility  of  appointing  more  coordinators  in  the  sections  of  Priority 
Projects that face significant complications 

Commission's response: 

The requested action has been taken. The Commission will maintain the existing 
coordinators  and  appointed  three  new  ones  on  8  June  2010,  thus  bringing  their 
number to nine. 

168. 

(European Parliament, Court of Auditors' special reports, SR §100) The EP Is of the 
opinion that the responsibilities of the TEN-T Executive Agency need to be extended 
in terms of an increase of effective control and the evaluation procedure in respect of 
the co-financing of Priority Projects 

Commission's response: 

The Commission is taking the requested action. It shares the Court's opinion that 
the TEN-T  Executive Agency’s delegation of powers has to meet the needs of an 
efficiently and effectively implemented TEN-T budget line. In January 2009 TEN-
T  EA  became  fully  responsible  for  the  management  of  all  open  TEN-T  projects 
from  both  the  2000-2006  and  2007-2013  Financial  Perspectives.  In  2011  a 
comprehensive review and evaluation of the Agency’s activities will be undertaken 
by  the  Commission.  The  results  of  the  evaluation  of  the  TEN-T  EA  are  expected 
mid 2012. 

169. 

(European Parliament, Court of Auditors' special reports, SR §101) The EP asks to 
improve the concentration of TEN-T co-financing at cross-border in order to achieve 
the elimination of the bottlenecks and the filling-in of missing links 

Commission's response: 

The requested action has been taken. This has already been taken on board since 
June 2009 when the calls were launched. The Commission carried-out a mid-term 
review  of  the  TEN-T  programme  during  the  first  half  of  2011.  The  review 
confirmed  the  concentration  of  cross-border  and  bottlenecks  (60%  of  the  MAP). 
The  Mid-term  review  concluded  that  the  present  policy  should  be  continued  and 
reinforced. 

170. 

(European  Parliament,  Court  of  Auditors'  special  reports,  SR  §102)  The  EP 
emphasises  that  all  the  remaining  problems  and  issues  need  to  be  evaluated  while 
preparing for the review of the TEN-T guidelines 

Commission's response: 

The  Commission  is  taking  the  requested  action.  It  agrees  that  the  review  of  the 
TEN-T guidelines is the right moment to renew the trans-European network policy 
and  the  right  moment  to  take  stock  of  the  work  done  and  pave  the  way  ahead 
taking  into  account  all  the  remaining  problems.  The  core  network  will  identify 
projects that offer the highest European added value – removing bottlenecks and 

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tacking  missing  links  –  both  along  major  axis,  at  national  borders  and  at  the 
interconnection of modes – as well as intelligent and innovative projects. 

171. 

(European Parliament, Court of Auditors' special reports, SR §103) The EP calls on 
the Commission to review TEN-T policy in order to meet future challenges related to 
the  climate  change  objectives,  further  economic  growth,  and  social  and  economic 
cohesion 

Commission's response: 

The  Commission  is  taking  the  requested  action.  In  the  TEN-T  policy  revision,  it 
will  fully  take  into  account  all  relevant  aspects  related  to  current  and  future 
economic growth, economic and social cohesion and climate change objectives. 

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Part X - Special report N° 9/2010 on "Is EU Structural Measures spending on the supply 
of water for domestic consumption used to best effect?" 

172. 

(European Parliament, Court of Auditors' special reports, SR §106) The EP invites 
the Commission to further improve the use of guidance and checklists by providing 
clearer  criteria  for  assessing  the  grant  applications  in  order  to  enhance  the 
effectiveness and consistency of the procedures and their results, as well as to ensure 
proper follow-up action in cases of non-provision of required information or action 

Commission's response: 

The Commission is taking the recommended action. It intends to take measures to 
that effect before 31 March 2012. 

For the period 2007-13, the Commission has streamlined the internal appraisal of 
major  projects  (projects  in  this  sector  above  50  million  €),  and  without  fulfilling 
minimum  requirements,  projects  cannot  be  co-financed.  This  is  being  addressed 
through  the  use  of  checklists  and  specific  training.  The  internal  checklists  have 
also been made available to the relevant authorities in the Member States. 

The EU JASPERS facility provides technical assistance to the new Member States 
when they are preparing major projects for the submission to the Commission. 

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Part XI - Special report N° 10/2010 on "Specific measures for agriculture in favour of 
the outermost regions of the Union and the smaller Aegean islands" 

173. 

(European  Parliament,  Court  of  Auditors'  special  reports,  §113)  The  EP  requests 
that  when  measures  are  framed  at  national  level,  due  account  must  be  taken  of 
sustainable  objectives  with  a  view  to  ruling  out  any  overemphasis  on  superficial 
measures 

Commission's response: 

The requested action has been taken. 

The Commission, in the context of the report on the impact of the POSEI reform 
adopted  in  September  2010,  has  recommended  Member  States  to  adopt  a  more 
strategic  approach  when  defining  and  proposing  modifications 
their 
programmes. Due priority should be given to measures which would have a more 
structural, long-lasting impact in the concerned regions. 

to 

174. 

(European  Parliament,  Court  of  Auditors'  special  reports,  §113)  The  EP  calls  for 
sustainable  approaches  to  be  developed  with  a  view  to  guaranteeing  the  future 
viability of farming in the regions concerned 

Commission's response: 

The requested action has been taken. 

The Commission, in the context of the report on the impact of the POSEI reform 
adopted  in  September  2010,  has  recommended  Member  States  to  adopt  a  more 
strategic  approach  when  defining  and  proposing  modifications 
their 
programmes. Due priority should be given to measures which would have a more 
structural, long-lasting impact in the concerned regions. 

to 

175. 

(European Parliament, Court of Auditors' special reports, SR §115) The EP echoes 
the  Court  of  Auditors'  in  recommending  a  reduction  in  the  period  between 
assessments  from  five  years  to  one  year,  regardless  of  the  annual  implementation 
reports submitted by the Member States to the Commission 

Commission's response: 

The Commission will not be taking the requested action. 

The Commission insists that the nature of the POSEI and smaller Aegean islands 
programmes  does  not  allow  an  annual  in-depth  global  evaluation,  which  is 
regularly carried out on a 5-years basis, as requested by the basic regulations. 

However,  the  common  indicators  proposed  by  the  Commission  to  the  Member 
States will make for more effective annual monitoring of programme performance. 
The  first  annual  reports  on  the  implementation  of  the  POSEI  programs  with  the 
first  data  referred  to  the  common  indicators  requested  by  the  Commission  are 
expected  from  the  MS  by  31  July  2011  (30  June  from  GR).  At  that  point,  the 

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Commission's services will be able to provide more coherent data on the progress 
of the performance of the POSEI and PIME programs. 

176. 

(European Parliament, Court of Auditors' special reports, §115) The EP requests to 
establish  an  information  management  system  to  monitor  the  data  collected  by  the 
Member States on the basis of representative control indicators, making for a more 
effective and more sustainable use of financial aid 

Commission's response: 

The requested action has been taken. 

The Commission has proposed common indicators to the Member States that will 
allow  a  more  effective  annual  monitoring  of  the  programme  performance.  The 
first  annual  reports  on  the  implementation  of  the  POSEI  programs  with  the  first 
data referred to the common indicators requested by the Commission are expected 
from the MS by 31 July 2011 (30 June from GR). At that point, the Commission's 
services  will  be  able  to  provide  more  coherent  data  on  the  progress  of  the 
performance of the POSEI and PIME programs. 

177. 

(European  Parliament,  Court  of  Auditors'  special  reports,  §116)  Calls  on  the 
Commission to cooperate more effectively with the Member States 

Commission's response: 

The requested action has been taken. 

The Commission considers that the cooperation with Member States is already very 
close and fruitful. Efforts will be maintained and increasingly focused in assisting 
Member States improving the programmes' efficiency. 

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European Development Funds 

178. 

(European  Parliament,  European  Development  Funds,  §5)  The  EP  recalls  the 
Commission's  commitment  to  ensuring  that  a  benchmark  of  20  %  of  its  allocated 
assistance  under  the  Development  Cooperation  Instrument  (DCI)  is  dedicated  to 
basic  and  secondary  education  and  basic  health  and  calls  for  reporting  against  the 
same  benchmark  to  be  provided  for  the  EDFs.  The  EP  calls  on  the  Commission  to 
prioritise support to strengthen health systems by focusing especially on targeting the 
poorest  people,  to  improve  the  quality  of  learning  and  to  help  establish  a  policy 
framework  which  favours  the  poor  and  which  is  gender  responsive;  calls  on  the 
Commission to take full account of the recommendations by the Court of Auditors as 
formulated in its Special Reports No 10/2008 and 12/2010; calls on the Commission 
to increase this share to 25 % in the future; urges the Commission to place greater 
emphasis on maternal health and stresses the importance of education and awareness 
of sexual and reproductive health as an integral part of the women's health agenda 

Commission's response: 

The Commissioner already sent the related statistics demonstrating the fulfilment 
of  the  20%  of  country  level  programmed  aid  under  the  DCI  for  basic  and 
secondary  education  and  basic  health  to  the  European  Parliament  (Note  CAB 
11/SS/tm devco.g.8(2011)473250 dated 03/05/2011) to the Chair of the Committee 
on Development. Health systems strengthening and access by the poor through an 
equity-  and  rights  based  approach  are  enshrined  in  the  Commission's  Global 
Health Communication and are a regular feature of the Commission's programme 
design, sector policy dialogue and EU coordination activities. The Commission has 
taken  full  account  of  the  reports  of  the  European  Court  of  Auditors  (ECA)  on 
health and education and has shared its comments with the ECA and the EP.  The 
quality of learning and issues of gender equality have been extensively covered in 
the Commission's reply to the ECA SR 12/2010.  The Commission fully agrees with 
the importance  of  education and awareness of sexual and reproductive health as 
an  integral  part  of  the  women's  health  agenda.  As  such  it  is  not  only  part  of  its 
support  to  health  services  and  health  systems  strengthening,  but  also  to  gender 
equality  and  women  empowerment  and  to  the  protection  of  women  and  girls 
against any form of violence as also covered in the EU Gender Action Plan. 

179. 

(European  Parliament,  European  Development  Funds,  §7)  The  EP  calls  on  the 
Commission  to  make  merit-based  use  of  local-  and  European-based  NGOs,  in 
particular in cases where the management of projects and programmes by NGOs and 
international  organisations  (Multi-Donor  Trust  Funds)  is  more  efficient  and  cost-
effective  than  management  by  the  Commission  and  where  their  activity  generates 
projects that remain sustainable after the financial support has expired. The EP urges 
the Commission to provide Parliament with clear information on the composition of 
NGO's own resources for specific projects which are partly financed by the EDF and 
by the NGOs themselves 

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Commission's response: 

The EP has been always kept amply informed by the Commission about the EDF 
financing to local and European-based NGOs. EU support to NGOs is as a general 
rule provided through calls for proposals. This is a very competitive process based 
on  transparent  procedures  which  allows  the  selection  of  the  best  projects  and  is 
thus  by  definition  based  on  merit.  Sustainability  aspects  are  always  part  of  the 
project  assessment  done  by  the  evaluation  committee.  As  for  the  financial 
contribution  from  the  NGO  to  the  selected  project,  this  can  be  provided  through 
own  resources,  private  funds  or  other  public  funds  outside  the  EDF  or  the  EC 
budget. It is the responsibility of the NGO to demonstrate the availability of the co-
financing. 

180. 

(European Parliament, European Development Funds, §10) The EP underlines that 
the  Commission's  follow-up  of  observations  made  by  the  Court  of  Auditors  in  a 
number  of  cases  is  inadequate  and  calls  on  the  Commission  to  inform  Parliament's 
competent  committees  on  the  actions  it  has  taken  to  eliminate  the  shortcomings  as 
mentioned by the Court of Auditors 

Commission's response: 

The Commission gives the greatest priority to the follow-up of observations made 
by  the  Court  of  Auditors.  All  key  actions  taken  by  the  Commission  in  relation  to 
the  follow-up  of  the  Court  of  Auditors'  recommendations  for  the  EDF  are 
published  in  the  first  semester  of  year  N+1  in  the  EuropeAid  Annual  Activity 
Report  which  is  publicly  available  on  the  Commission's  Europa  website 
(http://ec.europa.eu/atwork/synthesis/aar/index_en.htm) 

181. 

(European  Parliament,  European  Development  Funds,  §11)  The  EP  urges  the 
Commission to pursue energetically and to broaden existing training programmes for 
staff working in Delegations and in the offices of national authorising officers 

Commission's response: 

The EDF trainings include 10 sessions per year (5 EN and 5 FR) for 25/27 persons 
per  session,  and  also  15  sessions  per  year  for  national  and  regional  authorising 
officers (each session also for 25/27 persons). Since the signature of the contract 
in 2009 and until end 2011, 33 of those authorising officers will have received the 
training.  Have  also  been  organised:  regional  trainings  on  financial  and 
contractual procedures, CRIS-EDF trainings in the delegations and a seminar in 
Brussels  in  March  2011  for  the  finance,  contract  and  audit  sectors  following  the 
revision of the Cotonou agreements. 

182. 

(European Parliament, European Development Funds, §13 and §14) The Parliament 
notes the Court of Auditors' remarks relating to an understatement of the amount of 
guarantees  received  in  respect  of  pre-financing  and  to  an  overstatement  of  the 
amount of retention guarantees disclosed in the notes to the financial statements and 
calls on the Commission to remedy these shortcomings without delay. The EP calls 
on  the  Commission  to  explain  on  a  case-by-case  basis  the  reasons  for  these  under-
and overstatements. 

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Commission's response: 

The Court's observation regarding the understatement of the ongoing value of pre-
financing  guarantees  was  based  on  a  single  error  noted  in  a  population  of  39 
contracts.  One  guarantee  of  €  3.5  millio n  was  not  recorded  in  the  accounting 
system. Similarly, the Court's observation regarding the retention guarantees was 
based on a single error identified in a sample of 10 contracts. The error identified 
was a guarantee which had expired but which was still recorded in the accounting 
system.  The  Authorising  Officer  has  recorded  the  necessary  corrections  in  2010. 
The  Commission  notes  that  neither  of  these  two  observations  has  any  impact  on 
the  net  assets  of  the  EDF,  but  only  on  the  disclosures  in  the  Annual  Accounts. 
Reinforced  accounting  quality  controls  meant  to  identify  and  correct  under-  and 
overstatement of guarantees are being carried since 2010. 

183. 

(European  Parliament,  European  Development  Funds,  §19)  The  EP  calls  on  the 
Commission  to  enhance  ex-ante  controls  to  prevent  this  type  of  error  and  possible 
losses as a result of non-compliance with the bank guarantee rules 

Commission's response: 

The  Financial  Regulation  (FR),  including  the  rules  on  bank  guarantees  are  at 
present under revision. In anticipation thereof, DG DEVCO has already set up a 
working group on the rules on bank guarantees with the aim of simplifying them. 
Commission  services  will  pay  particular  attention  to  the  issue  in  cases  where 
contract amendments imply also adjustments of the amounts of bank guarantees. 

184. 

(European  Parliament,  European  Development  Funds,  §20)  The  EP  invites 
EuropeAid to strengthen its efforts in the areas of financial procedures and controls 
of implementing organisations in future. The EP recalls also the recommendations of 
the  Court  of  Auditors  that  EuropeAid  should  continue  its  efforts  to  ensure  that  the 
Delegations record data in the CRIS Audit in a comprehensive and timely manner 

Commission's response: 

EuropeAid has published (at the end of 2010) a 'Financial Management Toolkit' 
specifically  written  to  help  implementing  organisations  strengthen  their  financial 
management  of  EU  funds.  Specific  actions  have  also  been  taken  to  improve  the 
comprehensive  and  timely  input  of  data  into  CRIS  (including  the  audit  module) 
including through the introduction of a CRIS/Web based reporting tool to replace 
traditional (external assistance management) reports in July 2011. 

185. 

(European  Parliament,  European  Development  Funds,  §21)  The  EP  calls  on  the 
Commission  to  address  without  delays  the  Court  of  Auditors'  finding  that  the 
monitoring and supervision by Delegations is only partially effective. It deplores the 
lack  of  capacity  of  most  NAOs  in  beneficiary  countries,  which  results  in  poorly 
documented  and  ineffective  checks,  as  well  as  the  shortcomings  in  the  financial 
procedures  and  controls  instituted  by  implementing  organisations  and  supervisors; 
shares  the  Court  of  Auditors'  view  that  Delegations  are  subject  to  resource 
constraints which often limit their capacity to perform certain activities 

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Commission's response: 

EuropeAid has published (at the end of 2010) a 'Financial Management Toolkit' 
specifically  written  to  help  implementing  organisations  strengthen  their  financial 
management of EU funds. In addition, the numerous training sessions organised 
for national and regional authorising officers, specific training on contractual and 
financial procedures, training in the handling of the CRIS data base and a specific 
seminar  for  finance,  contract  and  audit  sectors  in  delegations  in  March  2011 
should  all  contribute  to  a  better  handling  of  procedures  in  delegations.  The  new 
electronic standard reporting tool for the delegations' EAMR (external assistance 
management reports) should also improve consistency in procedures. 

186. 

(European  Parliament,  European  Development  Funds,  §22)  The  EP  stresses  its 
concern  at  the  lack  of  complementarity  between  the  Commission's  regional  and 
national  cooperation  strategies  and  emphasises  that  bringing  regional  and  national 
strategies in line with one another is essential to increase the effectiveness of the aid 
provided 

Commission's response: 

The  Commission  has  already  taken  steps  to  further  improve  coherence  and 
consistency  between  regional  and  national  strategies,  in  particular  through 
regional seminars. Complementarity will be a key element in the mid-term reviews 
of the 10th EDF national strategies that are taking place in 2011, in which special 
attention  will  be  given  to  ensuring  that  the  regional  integration  objectives 
supported by the Regional Indicative Programmes (RIP) will be integrated in the 
analysis of the National Indicative Programmes (NIP). 

187. 

(European  Parliament,  European  Development  Funds,  §23)  The  EP  urges  the 
Commission, during the mid-term review of the regional strategies foreseen for the 
first  half  of  2011,  to  take  account  of  the  regional  cooperation  situation  and  to  pay 
special attention to the possibility of revising the amounts allocated 

Commission's response: 

The  Mid  Term  Review  will  include  a  review  of  the  progress  and  problems  in 
implementation  and  lessons  learned  with  a  realistic  assessment  of  what  can  be 
implemented in the remaining period under the 10th EDF. In addition, the specific 
objectives  and  policy  dialogue  in  the  regional  context  will  be  considered  and  the 
strategic  goals  to  be  achieved  with  financial  support  at  regional  level  will  be 
determined.  Based  on  the  outcome  of  this  assessment,  different  changes  may  be 
made to the Regional Indicative Programmes, either related to the amounts of the 
regional  envelopes  (revising  the  global  amount  or  reallocation  among  focal 
sectors)  or  related  to  the  nature  of  the  financial  assistance  to  a  region  (revising 
priorities in intervention areas). 

188. 

(European  Parliament,  European  Development  Funds,  §26)  As  regards  all  issues 
addressed by the ECA in its Special Report 18/2009, the EP asks the Commission to 
inform Parliament about the measures being taken following the requests formulated 
by  Parliament  in  its  resolution  of  5  May  2010  accompanying  its  Decision  on 
discharge  to  the  Seventh,  Eighth,  Ninth  and  10th  EDFs,  before  the  start  of  the 

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discharge  procedure  2010.  The  EP  would  also  welcome  a  complete  overview 
showing which of these measures have been implemented effectively in the regions 
concerned 

Commission's response: 

The  Commission  has  provided  elaborate  replies 
the  comments  and 
recommendations by the CoA. Several steps and actions were undertaken to make 
improvements  in  specific  areas  identified  and  to  take  into  account  the  accepted 
recommendations.  The full overview of measures being taken following requests 
by Parliament can be found in the answers to the recommendations issued by the 
European Court of Auditors in RAD. 

to 

189. 

(European  Parliament,  European  Development  Funds,  §29)  The  EP  calls  on  the 
Commission to step up capacity-building for East African and West African regional 
economic  organisations  and  their  institutions,  including  support  for  national 
parliaments and local civil society, and to encourage convergence between regional 
blocs  with  a  view  to  eliminating  overlapping  membership  over  time,  whilst  taking 
care to respect partner countries' ownership of the process 

Commission's response: 

The  10th  EDF  regional  integration  programmes  that  are  under  preparation  all 
include a comprehensive capacity building component and a mechanism for better 
coordination between the Regional Organisations within the same region and with 
the States of the Region. 

190. 

(European  Parliament,  European  Development  Funds,  §30)  The  EP  calls  on  the 
Commission and the European External Action Service to allocate more resources in 
order  to  enable  Union  Delegations  to  manage  regional  integration  processes  more 
effectively 

Commission's response: 

The  Commission  is  aware  of  the  need  for  more  effective  management  and 
coordination  instruments:  redeployment  and  reinforcement  of  staff  have  been 
implemented  but  also  specific  operational  guidelines  have  been  developed  and 
issued for a more effective management and coordination of regional programmes. 

191. 

(European  Parliament,  European  Development  Funds,  §32)  The  EP  insists  that 
smaller states' fund allocation, especially for the least-developed countries, should be 
more focused on sustainable economic development, such as through wealth creation 
mechanisms, so as to reduce the dependency on regional economic 'giants', such as 
Nigeria in West Africa. The EP calls on the Commission to continue its funding for 
regional  programmes,  otherwise  known  as  Intra-ACP  Programmes,  which  cover 
several or all countries in a particular region 

Commission's response: 

The Commission agrees with the EP's call for putting emphasis in its cooperation 
with  LDCs  on  "wealth  creation".  The  EU  supports  the  existing  agendas  for 

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regional economic integration in the ACP region with the aim of creating regional 
markets.  Such  regional  markets  will  increase  competition  and  efficiency,  and 
attract more investment. Equally, regional markets will facilitate the integration of 
the ACP economy into the global market. The Economic Partnership Agreements 
(EPA)  between  the  EU  and  the  ACP  regions  will  contribute  to  this  process.  The 
existing regional programmes regularly cover a wide range of activities, including 
political  and  security  related  aspects,  but  they  also  address  economic  and  trade 
issues.  In  the  case  of  West  Africa  the  regional  programme  is  to  a  large  extent 
designed to support the implementation of the future EPA and to allow the region 
to  address  adaptation  and  adjustment  needs,  and  to  draw  maximum  benefit  from 
the trade liberalisation. The Commission continues indeed to implement the Intra-
ACP  cooperation  under  the  10th  EDF  (2008-2013)  with  a  financial  envelope  of 
EUR 2700 million. 

192. 

(European  Parliament,  European  Development  Funds,  §33)  The  EP  asks  the 
Commission  to  explain  what  the  policy  in  the  past  was  as  regards  accrued  interest 
and, if necessary, to make proposals to amend the regulation in force without delay 
in line with the principle that it should only be used for expenditure for projects 

Commission's response: 

The internal agreement stipulates in Article 1.6 that the interests generated by the 
EDF  funds  have  to  be  used  in  conformity  with  Article  6  of  the  same  internal 
agreement.  That  article  defines  the  administrative  expenditure  connected  with 
putting in place the EDF by the Commission. It is specified that these charges also 
include the expenditure relating to administrative support in the headquarters and 
in  delegations  for  actions  in  the  framework  of  the  ACP-EU  partnership  and  the 
association decision, not covered by the core tasks of the European Public service. 

This was already the case for previous EDFs. 

The Commission confirms that in conformity with this article, no permanent staff 
has been financed by the interests. This article is however the legal basis to finance 
non  permanent  staff  (contractual  agents,  local  agents  and  interim  staff)  at 
headquarters and in the delegations. 

On 5 decisions already taken for the 10th EDF, 3 include charges relating to staff 
(5 persons in total). The 2 decisions that are being finalised do not contain charges 
relating to staff. 

193. 

(European  Parliament,  European  Development  Funds,  §34)  The  EP  asks  the 
Commission to provide information concerning those cases in which the goals set for 
EU  budget  support  were  accomplished  and  in  which  recipient  countries'  specific 
problems were encountered 

Commission's response: 

The  Commission  has  strengthened  its  reporting  on  budget  support  with  specific 
country  fiches  in  the  context  of  the  2010  Annual  Report  on  External  Assistance. 
Those  reports  include  information  on  results  achieved  and  on  difficulties 
encountered. 

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194. 

(European  Parliament,  European  Development  Funds,  §36)  The  EP  calls  on  the 
Commission  to  continue  its  efforts  to  substantiate  its  decisions  concerning  the 
eligibility  of  budget  support  and  to  ensure  that  all  financing  agreements  provide  a 
comprehensive  and  clear  basis  for  the  assessment  of  compliance  with  payment 
conditions 

Commission's response: 

As  noted  by  the  European  Court  of  Auditors  in  the  2010  EDF  discharge,  the 
Commission  has  made  further  progress  towards  a  structured  and  formalised 
assessment  of  countries'  eligibility  for  budget  support,  noting  great  improvement 
for commitments in the framework of the 10th EDF. 

195. 

(European  Parliament,  European  Development  Funds,  §37)  As  regards  budget 
support  payments,  the  EP  calls  on  the  Commission  to  intensify  audits  and 
supervisory  and  control  systems  and  to  monitor  and  report  back  on  the  extent  to 
which  these  criteria  are  being  met,  in  line  with  the  provisions  of  Article  25(1)(b) 
Regulation (EC) No 1905/2006 

Commission's response: 

The  Commission  scrutinises  rigorously  the  disbursement  conditions  of  each 
payment  file  before  taking  any  disbursement  decision.  A  new  format  for 
Delegation’s Public Finance Management Annual Monitoring Reports, including 
a new assessment scheme for PFM reform progress was introduced in June 2010. 
The comparison of achievements with clear and realistic priority objectives for the 
short  (next  12  months)  and  medium  term  (next  three  years)  by  the  recipient 
government  promotes  structured  and  formalised  assessment.  It  should  be  noted 
that  disbursements  can  be  withheld  until  all  conditions  have  been  met.  In  2010 
alone several budget support disbursements were withheld when progress towards 
objectives had been considered insufficient and conditions remained unmet. Once 
disbursed the EC budget support funds become part of the partner country's global 
resources  or  budget  and  are  used  in  accordance  with  partner  countries'  public 
finance management systems. The country's authorities and more specifically their 
Supreme  Audit  Institutions  are  responsible  for  the  supervision,  control  and 
auditing of their public funds and accounts. The Commission is supporting those 
institutions as part of the public finance management reforms efforts. 

196. 

(European  Parliament,  European  Development  Funds,  §40)  The  EP  expects  the 
Commission  to  strengthen  the  monitoring  and  annual  reporting  on  the  compliance 
with the eligibility criteria; recalls that capacity building projects within the scope of 
budgetary support operations are subject to the same supervisory and control system 
as any other project, which includes audits 

Commission's response: 

The  Commission  scrutinises  rigorously  the  disbursement  conditions  of  each 
payment  file  before  taking  any  disbursement  decision.  A  new  format  for 
Delegation’s Public Finance Management Annual Monitoring Reports, including 
a new assessment scheme for PFM reform progress was introduced in June 2010. 
The comparison of achievements with clear and realistic priority objectives for the 

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short  (next  12  months)  and  medium  term  (next  three  years)  by  the  recipient 
government  promotes  structured  and  formalised  assessment.  The  disbursements 
can be withheld until all conditions have been met. In 2010 alone several budget 
support  disbursements  were  withheld  when  progress  towards  objectives  had  been 
considered  insufficient  and  conditions  remained  unmet.  Audits  of  capacity 
building projects are undertaken as with other projects. 

197. 

(European  Parliament,  European  Development  Funds,  §42)  The  EP  urges  the 
Commission to evaluate the budget support payments with even greater rigour and to 
tighten up its payment procedures from now on 

Commission's response: 

The  Commission  scrutinises  rigorously  the  disbursement  conditions  of  each 
payment  file  before  taking  any  disbursement  decision.  A  new  format  for 
Delegation’s Public Finance Management Annual Monitoring Reports, including 
a new assessment scheme for PFM reform progress was introduced in June 2010. 
The  disbursements  can  be  withheld  until  all  conditions  have  been  met.  In  2010 
alone several budget support disbursements were withheld when progress towards 
objectives had been considered insufficient and conditions remained unmet. 

198. 

(European  Parliament,  European  Development  Funds,  §43)  The  EP  calls  on  the 
Commission  to  ensure  that  the  specific  conditions  for  performance-based  variable 
tranches clearly specify  the  indicators, targets, calculation methods and verification 
sources  and 
that  Delegations'  reports  provide  a  structured  and  formalised 
demonstration of public finance management progress 

Commission's response: 

The  Commission  scrutinises  rigorously  the  disbursement  conditions  of  each 
payment  file  before  taking  any  disbursement  decision.  A  new  format  for 
Delegation’s Public Finance Management Annual Monitoring Reports, including 
a new assessment scheme for PFM reform progress was introduced in June 2010 
providing the format for a structured assessment of PFM  reforms. All  10th  EDF 
Budget Support Financing Agreements audited in 2010 by the European Court of 
Auditors  specify  the  indicators,  targets,  calculation  methods  and  verification 
sources in a clear and unambiguous manner. 

199. 

(European  Parliament,  European  Development  Funds,  §44)  The  EP  calls  on  the 
Commission  to  take  all  necessary  measures  in  order  to  combat  corruption  in  the 
beneficiary states 

Commission's response: 

At country level, the Commission will continue to support specific interventions in 
key governance related areas which are essential for fighting corruption (support 
to  oversight,  control  and  anti-corruption  policies  and  institutions,  justice  and 
security reform, democratisation, public sector reform, public finance management 
reform). The Commission also intends to further mainstream governance and anti-
corruption  in  key  areas  of  its  cooperation,  such  as  health,  water,  education  and 
infrastructures, to ensure that governance is taken into account in all programmes. 

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It  is  currently  updating  and  consolidating  the  core  operational  guidance  (Project 
Cycle Management, Sector Policy Support Programmes and Budget Support) into 
one  overall  set  of  guidance  for  Project  and  Programme  Cycle  Management 
(PPCM).  This  guidance  aims  to  better  structure  country  and  sector  context 
analysis  and  will  introduce  political  economic  analysis  both  at  country  and  at 
sector  level  so  as  to  take  more  informed  decisions  on  objectives  and  expected 
results  of  its  cooperation.  The  Commission  is  carrying  out  a  first  test  of  its  new 
political  economy  approach  at  country  level  and  aims  to  finalise  a  draft  set  of 
guidance on political economy analysis by the end of 2011. The guidance will be 
disseminated  to  delegations  for  further  wider  scale  testing  and  feedback  during 
2012. As part of the PPCM exercise, the Commission also aims to better integrate 
governance  analysis  for  sector  programmes  under  the  PPCM  guidance.  In 
addition,  a  more  structured  approach  is  being  developed  for  improving  and 
supporting corruption assessment and monitoring systems. EuropeAid is currently 
working on the following: 

- A concept Paper on "Supporting Anti-Corruption Reform in Partner Countries: 
Concepts,  Tools  and  Areas  for  Action",  which  is  aimed  at  staff  EU  staff  in 
delegations  and  HQs  to  provide  concrete  tools  and  a  framework  to  analyse  and 
assess corruption. The concept paper is to be published and sent to EU delegations 
by end of 2011; 

-  The  Gateway  project  is  designed  for  analysing  corruption  and  monitoring  anti-
corruption reforms, with the aim of developing a web portal (including database), 
an  interactive  users'  manual,  training  modules  and  an  analytical  paper  for 
facilitating the access and providing guidance for using the various existing (anti-) 
corruption  assessment  and  monitoring  tools.  This  project  seeks  to  assist 
governance practitioners in their task of public policy reform and evidence-based 
advocacy by providing them with guidance on how to best use the ever-expanding 
variety  of  governance  and  (anti-)  corruption  assessment  tools.  The  public 
launching of the Gateway is foreseen for the end of January 2012. 

Finally,  by  continuing  to  use,  when  necessary,  anti-corruption  provisions  of  its 
development  and cooperation agreements (notably in the framework of article 97 
of  the  Cotonou  Agreement),  the  Commission  can  also  undertake  specific 
consultations and dialogue in case of serious corruption cases, which could lead to 
sanctions if appropriate measures are not put in place. This work is ongoing. 

200. 

(European  Parliament,  European  Development  Funds,  §45)  The  EP  reiterates  its 
opinion  that  the  involvement  of  national  parliaments,  civil  society  and  local 
authorities  in  partner  countries  is  indispensable  in  order  to  achieve  genuine 
ownership of the process and repeats its call on the Commission to make every effort 
in  order  to  improve  dialogue  with  these  bodies  at  all  the  different  stages  of  the 
programming process 

Commission's response: 

As signatory to the Paris Declaration (2005) and Accra Agenda for Action (2008)  
on  aid  effectiveness,  the  Commission  is  committed  to  the  principle  of  ownership 
namely to ensure that developing countries set their own development strategy. In 
this  regard,  the  Commission  is  holding  systematic  consultation  with  partners 

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countries  stakeholders  including  National  Parliaments,  Civil  Society  and  Local 
Authorities. Furthermore, one of the thematic action undertaken in the framework 
of  the  Development  Cooperation  Instrument,  targets  specifically  civil  society 
organisations  and local  authorities. This is a  continuous process that takes place 
both at the beginning of the programming phases and in case of mid-term reviews. 

201. 

(European  Parliament,  European  Development  Funds,  §46)  The  EP  urges  the 
Commission  to  help  partner  countries  develop  parliamentary  control  and  audit 
capacities and to involve national parliaments, as well as local civil society partners 

Commission's response: 

In line with its policy to foster Country Ownership and democratic governance, the 
Commission  encourages  and  supports  efforts  of  partner  countries  to  develop 
parliamentary control and audit capacities to oversee effectively the use of public 
funds. Thus, the Commission has been and is supporting many capacity building 
initiatives in this area and will report on this within its annual reports on external 
assistance.  A  study  on  the  support  to  parliaments  in  external  development  and 
cooperation  programmes  has  been  finalised  in  October  2010  and  includes  an 
assessment of EC support to Parliaments in the ACP region (covering 2000-2009) 
with  a  related  database  of  projects,  as  well  as  a  practical  guide  to  parliamentary 
support  for  EU  Delegation  and  HQ  staff  called  "Engaging  and  Supporting 
Parliaments Worldwide". A parliamentary support training module was piloted in 
September  2010  in  collaboration  with  the  EP's  Office  for  Promotion  of 
Parliamentary  Democracy  (OPPD).  Within  the  practical  guide  a  chapter  is 
dedicated to parliamentary oversight with a focus on budget control. The different 
results  of  the  study  have  been  made  public  and  can  be  accessed  on  the 
Development  Cooperation  EuropeAid  Internet  site.  Work  is  currently  ongoing  in 
reviewing  EC  support 
the 
to  parliaments  outside 
Neighbourhood,  Asia  and  Latin  America.  In  addition  the  Commission  has  done 
this  year  a  mapping  of  all  its  support  to  supreme  audit  institutions  and 
parliamentary control finding 79 projects in 48 countries. In the framework of the 
upcoming Budget Support Communication and the revision of the Budget Support 
Guidelines  an  increased  emphasis  will  be  put  on  strengthening  domestic 
accountability with a central role for parliamentary control. The Commission will 
continue to report on its work in this field on a regular basis. 

the  ACP  covering 

202. 

(European  Parliament,  European  Development  Funds,  §48)  The  EP  urges  the 
Commission to ensure better visibility for Union-funded activities overseas 

Commission's response: 

All  projects  financed  by  the  EU  are  contractually  required  to  provide  adequate 
visibility  to  the  EU  and  to  respect  the  visibility  manual.  We  are  monitoring  the 
implementation of these requirements. 

203. 

(European  Parliament,  European  Development  Funds,  §52)  EuropeAid  should 
develop  a  key  indicator  of  the  estimated  financial  impact  of  the  uncorrected  errors 
after  all  controls  have  been  implemented;  EuropeAid  should  assess  the  cost-
effectiveness  of  the  various  controls;  EuropeAid  should  ensure  that  the  specific 

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conditions  for  payments  are  clearly  defined  and  that  Delegations'  reports  provide  a 
formalised demonstration of progress achieved in public finance management 

Commission's response: 

In  2010  a  study  defined  a  methodology  to  measure  the  residual  error  rate  across 
DG DEVCO activities after all controls, checks and audits have been carried out. 
In  Q2/2011  a  pilot  study  was  launched  to  test  this  methodology  with  a  view  to  a 
subsequent full implementation. 

204. 

(European  Parliament,  European  Development  Funds,  §62)  The  EP  invites  the 
Commission  to  monitor  and  control  closely  the  implementation  of  the  Investment 
Facility with a view to guaranteeing that it fulfils its objective as a development tool, 
and to inform Parliament's Committee on Budgetary Control on a regular basis of its 
findings 

Commission's response: 

In  line  with  the  (revised)  EIB  External  Mandate,  Commission  Services  fully 
subscribe  to  the  need  to  align  the  IF  operations  with  the  EU  principles  on 
development and the aid effectiveness agenda. Following the recent restructuring 
of  EuropeAid  (1/6/2011),  the  creation  of  one  Unit  (DEVCO/C3)  with  overall 
reporting  responsibility  on  the  management  of  the  different  Facilities  is  an 
important  and  essential  step  in  this  direction.  The  discussion,  to  be  led  by  the 
Commission, on the "EU Platform" (report on its feasibility due for mid-2012) will 
also inform help determine the eventual definition of the appropriate framework. 
In  addition,  the  EIB  is  currently  developing  a  Monitoring  and  Reporting 
Framework that will be applicable as of 2012 to  all new projects, and  in parallel 
has  started  the  process  of  revising  the  Operational  Guidelines  of  the  IF, 
management  of  which  is  fully  entrusted  to  the  EIB.  Commission  Services  will 
strive  to  ensure,  in  the  context  of  their  IF  monitoring  tasks,  that  the  Reporting 
Framework  and  the revised the  Operational Guidelines of the IF  (end 2011) will 
provide  to  the  EIB  with  the  means  to  collect  and  report  the  appropriate 
information. 

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Requests to the Commission concerning the agencies 

205. 

(European  Parliament,  performance,  financial  management  and  control  of  EU 
agencies, §17) The EP asks the Commission to provide information on the existence 
and application of regulations with respect to the relevant duties and obligations of 
officials  provided  for  in  Article  16  of  the  Staff  Regulations  of  Officials  of  the 
European Union[1] ( so called "cooling-off periods") in all the agencies 

Commission's response: 

Article  16 Staff Regulation  (SR) concerns obligations that apply  to officials after 
leaving the service. Articles 11 and 81 of the Conditions of Employment of Other 
Servants (CEOS) extend the same obligations to temporary staff and contract staff.  

The  Commission  has  given  effect  to  these  provisions  by  Decision  85-2004  of  29 
June 2004. An update of such decision is currently under examination. 

In  accordance  with  Article  110  SR,  agencies  adopt  implementing  rules  giving 
effect  to  the  SR  or  CEOS  measures  in  agreement  with  the  Commission.  This 
implies  that  each  agency  is  bound  to  submit  to  the  Commission  any  draft  rule 
giving effect to the SR before its adoption. The Commission keeps track of all such 
rules  and  is  accordingly  in  a  position  to  inform  the  EP  at  any  time  of  the  rules 
submitted and subsequently adopted by the agencies. 

However in theory it cannot be excluded that an agency adopts a rule giving effect 
to  the  SR  without  seeking  the  agreement  Commission.  In  that  case,  the 
Commission would not be informed of the existence of that rule and, accordingly, 
the Commission would not be in a position to inform the EP. 

As  regards  Article  16  SR  in  practice,  all  the  rules  submitted  by  agencies  were 
aligned  onto  Commission  Decision  85-2004  referred  to  above.  To  date,  a  large 
majority of agencies have adopted the rules in question. And since the Commission 
considers that the rules on rights and obligations of officials (Title II of the Staff 
Regulations)  should  apply  by  analogy  the  staff  of  agencies,  the  Commission  will 
invite the agencies to update their rules as soon as the Commission has updated its 
own. 

However,  the  Commission  is  not  in  a  position  to  give  a  favourable  reply  to  the 
recommendation  insofar  as  it  concerns  the  application  of  the  rules  referred  to 
above in the agencies. 

According  to  the  Staff  Regulations  agencies  have  an  independent  status  and  the 
Appointing  Authority  powers  are  exercised  by  themselves.  As  this  includes  the 
application  of  statutory  provisions,  the  Commission  has  no  competence  to  review 
the legality of individual acts adopted by agencies, nor is it informed thereon. 

206. 

(European  Parliament,  performance,  financial  management  and  control  of  EU 
agencies, §20) The EP calls on the Commission to provide Parliament with a detailed 
overview of the criteria applied in order to ensure the independence of recruited staff, 

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in  particular  with  respect  to  possible  conflicts  of  interest,  and  to  apply  dissuasive 
sanctions where any irregularity is found 

Commission's response: 

A general overview of the criteria applied to ensure independence of staff can be 
provided. Such an overview would consist of the applicable provisions of the Staff 
Regulations (Title II). However, a more detailed overview would also need to take 
into account the details of the different ethics policies and other specificities that 
are  in  force  at  the  agencies.  Such  an  overview  would  require  a  disproportionate 
investment  on  the  part  of  the  Commission  and  is  not  likely  to  add  much  to  the 
general  overview.  The  amendment  also  calls  on  the  Commission  to  apply 
dissuasive measures in case of irregularities. In light of the fact that agencies are 
autonomous  entities  with  their  own  legal  personality,  the  Commission  is  not 
competent to apply such measures. 

207. 

(European  Parliament,  performance,  financial  management  and  control  of  EU 
agencies, §39) The EP notes that the large size of certain agencies' Governing Boards 
and the high turnover of their members could lead to an ineffective decision-making 
body;  calls,  accordingly,  on  the  Inter-institutional  Working  Group  on  Agencies  to 
address  this  issue;  suggests  also  that  consideration  be  given  to  the  possibility  of 
merging Governing Boards for agencies working in related fields to reduce amount 
spent on meetings 

Commission's response: 

The  Inter-institutional  Working  Group  on  Agencies  has  addressed  the  issue  of 
large-size  management  boards  and  high  turn-over  of  members  by  supporting  the 
introduction of a two-tier governance system, consisting of the Management Board 
on  the  one  hand  and  a  smaller  Executive  Bureau  on  the  other  hand.  The  latter 
would be composed of a limited number of Management Board members, with the 
presence of a Commission representative. It would be more closely involved in the 
running  and  monitoring  of  the  agency,  in  particular  with  a  view  to  reinforcing 
supervision of administrative and budgetary management. 

208. 

(European  Parliament,  performance,  financial  management  and  control  of  EU 
agencies, §43) The EP calls on the Commission to increase its efforts to provide all 
necessary  administrative  assistance  to  the  relatively  small  agencies,  in  particular 
those  that  were  established  recently  and  to  make  sure  that  all  agencies  work 
efficiently 

Commission's response: 

A substantial number of Commission services are already available to all agencies, 
including to the relatively small and recently established ones (e.g. free service of 
Help  Desk  for  financial  and  legal  aspects  related  to  the  Framework  Financial 
Regulation, Help Desk for HR issues, internal audit by the Internal Audit Service, 
certain  services  provided  by  the  Paymaster  Office  –  PMO,  training  courses 
provided  by  Directorate  General  Human  Resources,  advice  on  staff  selection 
procedures provided by EPSO, etc.). Also, it is  a standard practice to designate a 
Commission  official  as  interim  Director  and  to  second  (up  to  three)  Commission 

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officials to newly created agencies for a period of 1,5 years with a view to ensuring 
the agency start up. Moreover, the Inter-institutional Working Group on Agencies 
agreed  that  services  provided  by  the  Commission  could  be  extended  through 
adjustments of the current framework. 

209. 

(European  Parliament,  performance,  financial  management  and  control  of  EU 
agencies, §56) The EP requests the Inter-institutional Working Group on Agencies to 
come  up  with  an  analysis  and  general  advice  regarding  the  effectiveness  of  the 
current  agencies,  and  to  propose  plans  for  comprehensive  efficiency  improvements 
with regard to the type and the number of agencies 

Commission's response: 

The discussions within the Working Group aim at improving agencies' efficiency 
and  effectiveness  overall,  but  the  Group  will  not  decide  in  detail  on  the  specific 
actions  to  be  implemented.  Specific  actions  are  to  be  decided  upon  on  a  case  by 
case basis as a follow-up to the conclusions of the Group. 

210. 

(European  Parliament,  performance,  financial  management  and  control  of  EU 
agencies, §59) The EP calls for a moratorium on the creation of any further agencies 
at  least  until  the  questions  raised  by  the  Inter-institutional  Working  Group  on 
Agencies'  Common  Statement  and  the  discharge  resolution  of  5  May  2010  are 
satisfactorily resolved 

Commission's response: 

At present the Commission does not have the intention to propose to the legislative 
authority any constitutive act for a new regulatory agency. 

211. 

(European  Parliament,  performance,  financial  management  and  control  of  EU 
agencies, §61 and §66) The EP calls on the Commission to carry out an evaluation of 
all the Union agencies aimed at detecting occurrences of overlapping  activities  and 
analysing, if overlaps are identified, the possibility of a merger between the agencies 
involved and to provide Parliament with a report on the issue by 31 December 2011 

Commission's response: 

The  question  of  possible  overlaps  and  synergies  in  the  work  of  the  respective 
Agencies  has  already  been  addressed  in  the  2009  external  evaluation  of 
decentralised agencies commissioned by the Commission. 

The Inter-institutional Working Group on  Agencies (composed of  representatives 
of the European Parliament, Commission and Council) took into consideration the 
possibility of merging smaller agencies to achieve economies of scale. Any further 
concrete action would be undertaken as a follow-up to the conclusions of the Inter-
institutional Working Group. These conclusions will take the form of a Common 
Understanding  between  the  European  Parliament,  the  Commission  and  the 
Council. 

212. 

(European  Parliament,  performance,  financial  management  and  control  of  EU 
agencies, §62) The EP asks that the Inter-institutional Working Group on Agencies 

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consider grouping together some of the smaller agencies, which may not be suitable 
for outright merger, in the same city and indeed possibly the same building so they 
can benefit from common central resources to minimise the burden of overhead and 
other costs 

Commission's response: 

The  Inter-institutional  Working  Group  on  Agencies  already  took  these  questions 
into consideration (e.g. advising merging smaller agencies to achieve economies of 
scale  or,  when  such  an  option  is  not  suitable,  sharing  services  between  agencies, 
either  by  proximity  of  locations  or  by  policy  area).  Specific  actions  are  to  be 
decided upon as a follow-up to the conclusions of the Group. 

213. 

(European Parliament, §402) The EP recommends merging the College with Europol 
in the near future; is convinced that the merger will engender greater rationality and 
efficiency  in  expenditure;  is  convinced  that  the  cost  of  keeping  the  College  and 
Europol  separate  would  be  higher  than  the  cost  of  a  merger.  The  EP  reiterates  its 
request  to  the  Commission  to  examine  before  1  September  2011  the  possibility  of 
attaching the College to Europol. The EP calls on the Council and the Commission to 
provide the Parliament with a report on the merging of the College with Europol by 
the end of 2011 

Commission's response: 

As  already  agreed  in  the  Inter-Institutional  Working  Group  on  regulatory 
agencies,  merging  agencies  should  be  considered  in  cases  where  agencies' 
respective tasks are overlapping, in cases where synergies can be contemplated or 
when  agencies  will  be  more  efficient  and  impactful  if  inserted  in  a  bigger 
structure.  However  such  factors  must  be  considered  through  in-depth  analyses 
taking into account the specific situation of each agency. This is why, on the basis 
of a recent evaluation, the Commission has begun to assess the impact of options 
for revising Council Decision 2005/681/JHA and will present the outcome of this 
impact  assessment  in  the  course  of  2012.  The  objective  is  that  the  Commission 
presents to the European Parliament and to the Council a proposal which is sound 
and well thought-through and which delivers to our citizens a body better equipped 
to train law enforcement officials. 

2  

This  request  to  the  Commission  originates  from  the  specific  Discharge  resolution  as  regards  the 
European Police College: document reference P7_TA(2011)0164. 

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