REPORT FROM THE COMMISSION ANNUAL REPORT ON THE COHESION FUND (2010)
Date: 2011-11-14
Institutions: European Commission
Subjects: Cohesion Fund, audit, financial year

EUROPEAN COMMISSION 

Brussels, 14.11.2011 
COM(2011) 741 final 

REPORT FROM THE COMMISSION 

ANNUAL REPORT ON THE COHESION FUND (2010) 

{SEC(2011) 1352 final} 

EN 

   EN 

 
 
 
 
  
 
 
TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

Financial execution of the 2000-2006 period in 2010 and closure of projects ............ 1 

Economic environment and conditionality .................................................................. 5 

Audits and financial corrections................................................................................... 6 

Irregularities notified by the Member States................................................................ 9 

Evaluation .................................................................................................................. 10 

Information and publicity........................................................................................... 11 

 
 
 
This  report  is  presented  in  conformity  with  Article  14(1)  of  Regulation  (EC)  No 1164/1994 
and  covers  the  implementation  during  2010  of  Cohesion  Fund  projects  adopted  under  the 
2000-2006  period  as  well  as  ex-ISPA  projects  in  the  Member  States  concerned,  including 
Bulgaria  and  Romania.  Information  provided  are  limited  to  the  2000-2006  period  as 
Regulation (EC) No 1084/2006 establishing a Cohesion Fund and repealing Regulation (EC) 
No 1164/1994 does not require the presentation of an annual report on the Cohesion Fund for 
the 2007-2013 period. 

As  a  consequence,  this  report  covers  Cohesion  Fund  operations  in  the  fifteen  beneficiary 
Member States - thirteen Member States as of end-2006, i.e. Greece, Spain, Portugal, Cyprus, 
Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia, 
as well as ex-ISPA projects adopted in the 2000-2006 period in Bulgaria and Romania which 
joined the European Union on 1 January 2007. It must be recalled that, as a result of economic 
growth, Ireland has not been eligible since 1 January 2004; nevertheless, on-going Cohesion 
Fund projects are still to be closed. 

Details  on  the  implementation  in  2010  of  projects  adopted  under  the  2000-2006  period  for 
each Member State are presented in the Commission Staff Working Document accompanying 
this report. 

1. 

FINANCIAL  EXECUTION  OF  THE  2000-2006  PERIOD  IN  2010  AND  CLOSURE  OF 
PROJECTS 

The Member States eligible for the Cohesion Fund support can be divided into three groups: a 
group  of  four  Member  States  eligible  from  the  beginning  of  the  programming  period  2000-
2006 (Greece, Spain, Ireland and Portugal), a second group of ten Member States that joined 
the  European  Union  in  May  2004  (Cyprus,  Czech  Republic,  Estonia,  Hungary,  Latvia, 
Lithuania, Malta, Poland, Slovakia, Slovenia), and the group of two Member States (Romania 
and Bulgaria) that joined the European Union in January 2007.  

1.1 

Extension of the final date of eligibility of expenditure 

The "Guidelines on the Closure of Cohesion Fund and Ex-ISPA projects 2000-2006"1 refers 
to the period of eligibility of expenditure which is set out in each individual decision granting 
financial assistance. In accordance with the principle of sound financial management, and the 
guidance sent on 9 March 2005 by the Directorate-General for Regional Policy to the Member 
States,  for  all  Cohesion  Fund  projects  the  Commission  set  the  final  eligibility  date,  as  a 
general rule, not beyond 31 December 2010.  

In  April  2010,  the  Commission  adopted  as  one  of  the  measures  in  support  of  the  European 
Economic  Recovery  Plan,  the  "Amendment  of  the  Guidelines  on  the  closure  of  Cohesion 
Fund  and  ex-ISPA  projects  2000-2006"2.  This  amendment  stated  that  the  Commission  may 
under justified  circumstances decide  to extend the final date of eligibility.  The Commission 
took into account that projects first approved from 2004 onwards may have been particularly 
affected by issues of providing the required national public or private co-financing, or by the 
ability of beneficiaries to  respect the  original schedule  of  works. The  Commission reflected 

1 "Guidelines on the Closure of Cohesion Fund and Ex-ISPA projects 2000-2006", SEC(2008) 415 of 4 April 2008 
2  "Amendment  of  the  Guidelines  on  the  closure  of  Cohesion  Fund  and  ex-ISPA  projects  2000-2006",  SEC(2010)  0405  of 

19 April 2010 

- 1 - 

 
 
 
                                                 
that such projects were in the midst or even only at the start of their implementation when the 
crisis set in.  

For  projects  first  approved  by  Commission  decision  after  1  January  2004  the  Commission 
may decide, on the basis of a duly justified request, to extend the final date of eligibility to 
31 December 2011. If, moreover, it concerns a project with a Cohesion Fund contribution of 
at least EUR 100 million, the final date of eligibility may be extended to 31 December 2012.  

Exception for the extension of the final date of eligibility beyond the dates above is possible 
only  under  exceptional  and  duly  justified  circumstances  (i.e.  administrative  or  legal 
proceedings  having  suspensory  effects,  cases  of  force  majeure  which  have  serious 
repercussions  for  the  implementation  of  the  project  supported  by  the  Cohesion  Fund,  or 
manifest errors attributable to the Commission).  

The amendment of the guidelines on closure was welcomed by the respective Member States 
and the Commission believes it will contribute to more efficient and effective implementation 
of the 2000-2006 Cohesion Fund projects. As a consequence, a number of the Member States 
requested  extensions  of  the  final  date  of  eligibility  for  several  dozens  of  Cohesion  Fund 
projects in 2010 which would mean that implementation of these projects will continue to the 
end of 2011 or 2012. 

1.2 

Payments made in 2010 for projects adopted under the 2000-2006 period 

In general, there were fewer final payments for Cohesion Fund projects (and ex-ISPA) for the 
period 2000-2006 than initially expected. Closure payment claims require thorough analysis 
of  the  closure  documents  and,  depending  on  their  completeness  and  quality,  it  can  result  in 
final payments at later stage than initially foreseen. The 2010 initial budget for payments for 
the  2000-2006  Cohesion  Fund  projects  amounted  to  EUR  2,500  million.  The  transfer  of 
appropriations  resulted  in  a  final  budget  of  EUR 2,321  million.  In  order  to  close  the  gap 
between  the  available  resources  and  the  demand  for  payments,  transfers  have  been  made  to 
the  budget  line  related  to  the  2007-2013  Cohesion  Fund  programmes.  For  the  period  2000-
2006, the available appropriations of EUR 2,321 million were fully implemented by the end 
of 2010. This is a lower execution than in year 2009 (EUR 2,777 million) illustrating the fact 
that the Cohesion Fund project implementation cycle is reaching its final stage.  

As  far  as  the  ex-ISPA  budget  lines  are  concerned,  the  budget  initially  foreseen  for  2010 
amounted  to  EUR 560 million.  In  September  (during  the  Global  Transfer  procedure),  the 
appropriations  were  reduced  by  an  amount  of  EUR 184 million.  After  further  transfers  in 
December 2010, the final appropriations amounted to some EUR 368 million. The available 
appropriations were implemented in their entirety.  

Table  1  presents  the  overall  execution  of  payments  in  2010  (including  technical  assistance) 
for the Cohesion Fund and the ex-ISPA projects. 

- 2 - 

 
 
 
Table 1. Implementation of the Cohesion Fund and ex-ISPA payments in 2010 (in EUR) 

Payment 
appropriations 

Initial 

Movements 

Final Resources 

Outturn 

Cohesion Fund 

2 500 000 000 

-179 383 717 

2 320 616 283 

2 320 616 283 

Ex-ISPA 

TOTAL 

560 000 000 

-191 878 478 

368 121 522 

368 121 522 

3 060 000 000 

-371 262 195 

2 688 737 805 

2 688 737 805 

Table  2  shows  the  level  of  2010  payments  for  each  Member  State  and  for  each  sector.  The 
main  beneficiary  countries  are  Spain  in  the  EU-4  group,  Poland  in  the  EU-10  group  and 
Romania in the EU-2 group. In 2010, payments were higher in comparison to the payments 
made  in  2009  for  the  following  countries:  Poland  (+ EUR  108  million  or  13 %  increase  of 
payments made in 2009), Slovakia (+ EUR 14 million or 29 % increase of 2009 payments).  

Table 2. Payments made in 2010 to the Cohesion Fund and ex-ISPA projects per Member State 
and per sector 

Environment 

Transport 

Technical 
Assistance 

TOTAL 

Member 
State 

Amount 

Greece  

196 285 182 

Portugal  

109 709 657 

% (as 
compare
d to the 
CF 2010 
outturn 
by MS) 

7,3% 

4,1% 

0,0% 

Amount 

% (as 
compare
d to the 
CF 2010 
outturn 
by MS) 

Amount 

Amount 

% (as 
compare
d to the 
global 
CF 
amount) 

60 562 484 

127 564 819 

2,3% 

4,7% 

0 

256 847 666 

9,55% 

985 244 

238 259 720 

8,86% 

Ireland  

Spain  

EU-4 

Cyprus  

Czech 
Republic  

Estonia  

Hungary  

Latvia  

Malta  

Poland  

Slovakia  

Slovenia  

EU-10 

0 

0 

328 329 637 

12,2% 

280 813 392 

10,4% 

0 

0 

0 

0,00% 

609 143 029 

22,66% 

634 324 476 

23,6% 

468 940 695 

17,4% 

985 244 

1 104 250 415 

41,07% 

0 

55 297 256 

15 878 636 

29 331 827 

10 338 526 

0 

0,0% 

2,1% 

0,6% 

1,1% 

0,4% 

0,3% 

0,0% 

0 

30 680 718 

22 039 712 

17 526 811 

25 859 859 

0,0% 

1,1% 

0,8% 

0,7% 

1,0% 

0 

0 

0,00% 

425 379 

86 403 353 

3,21% 

0 

37 918 348 

1,41% 

856 105 

47 714 743 

1,77% 

544 591 

36 742 976 

1,37% 

15 252 592 

0,6% 

6 138 958 

30 132 506 

1,12% 

0 

0,0% 

40 420 

40 420 

0,00% 

448 619 538 

16,7% 

491 467 969 

18,3% 

4 116 085 

944 203 592 

35,12% 

26 049 461 

11 790 480 

1,0% 

0,4% 

34 584 958 

440 792 

1,3% 

0,0% 

0 

60 634 419 

2,26% 

96 250 

12 327 522 

0,46% 

606 046 680 

22,5% 

637 853 411 

23,7% 

12 217 789 

1 256 117 879 

46,70% 

Lithuania  

8 740 955 

Bulgaria  

47 080 251 

Romania  

109 605 808 

1,8% 

4,1% 

68 561 660 

2,5% 

3 351 764 

118 993 675 

4,43% 

97 810 588 

3,6% 

1 959 440 

209 375 836 

7,79% 

EU-2 

156 686 059 

5,8% 

166 372 248 

6,2% 

5 311 204 

328 369 511 

12,21% 

TOTAL 

1 397 057 214 

52,0% 

1 273 166 354 

47,4% 

18 514 237 

2 688 737 805 

100,00% 

- 3 - 

 
 
 
  
1.3  Outstanding commitments from the 2000-2006 period 

At  the  end  of  2010,  the  average  absorption  rate  (payments  vs.  commitments)  of  all  current 
beneficiary countries for both the Cohesion Fund and ex-ISPA projects was 83.7 % (Table 3). 
The absorption rates range from 70.1% (Bulgaria) and 72.6% (Hungary) to 86.7% (Estonia) 
and 92.8% (Ireland).  

At the end of 2010, the outstanding commitments ("reste à liquider", RAL) corresponding to 
the 2000-2006 period amounted to EUR 5.7 billion. During 2010, the outstanding RAL was 
reduced  by  EUR 2.7  billion.  In  terms  of  absorption,  the  most  significant  decreases  in  RAL 
compared  to  year  2009  were  notified  for  Poland  (-16.8 percentage  points),  Bulgaria  
(- 13.6 percentage points) and Romania (- 10.3 percentage points).  

Table 3. Cohesion Fund and ex-ISPA accepted amounts in 2000-2006 (including RAL)  

Member State 

Committed 

Paid 

(until 12/2010) 

(until 12/2010) 

% Paid 

RAL 

as at 31/12/2010 

% RAL 

Greece 

Spain 

Ireland 

Portugal 

3 546 948 416 

2 972 182 523 

12 884 382 648 

11 128 639 199 

625 755 407 

580 710 223 

3 482 652 576 

2 979 319 277 

83,8% 

86,4% 

92,8% 

85,5% 

574 765 893 

1 755 743 450 

45 045 184 

503 333 299 

TOTAL EU-4 

20 539 739 048 

17 660 851 221 

86,0% 

2 878 887 827 

Cyprus 

54 014 695 

40 029 810 

Czech Republic 

1 226 218 717 

1 061 982 697 

Estonia 

Hungary 

Latvia 

Lithuania 

Malta 

Poland 

Slovakia 

Slovenia 

425 431 731 

368 686 651 

1 481 998 333 

1 075 837 677 

713 737 155 

578 052 034 

825 210 750,63 

691 544 300 

21 966 289 

17 573 031 

5 634 539 614 

4 652 759 522 

765 689 903 

646 665 528 

254 129 012 

214 745 183 

74,1% 

86,6% 

86,7% 

72,6% 

81,0% 

83,8% 

80,0% 

82,6% 

84,5% 

84,5% 

13 984 885 

164 236 020 

56 745 080 

406 160 656 

135 685 121 

133 666 450 

4 393 258 

981 780 092 

119 024 375 

39 383 829 

TOTAL EU-10 

11 402 936 200 

9 347 876 435 

82,0% 

2 055 059 765 

Bulgaria 

Romania 

876 877 183 

614 479 975 

2 035 838 573 

1 550 268 645 

70,1% 

76,1% 

TOTAL EU - 2 

2 912 715 755 

2 164 748 620 

74,3% 

262 397 209 

485 569 928 

747 967 135 

TOTAL 

34 855 391 003 

29 173 476 276 

83,7% 

5 681 914 727 

16,2% 

13,6% 

7,2% 

14,5% 

14,0% 

25,9% 

13,4% 

13,3% 

27,4% 

19,0% 

16,2% 

20,0% 

17,4% 

15,5% 

15,5% 

18,0% 

29,9% 

23,9% 

25,7% 

16,3% 

1.4 

Closure of Cohesion Fund projects  

In total there are 1192 Cohesion Fund projects for 2000-2006 (including the ex-ISPA projects 
and bridge projects 1994-1999), of which 795 were still on-going in the Member States at the 
end of 2010.  

- 4 - 

 
 
 
 
At the end of 2010, the total number of closed 2000-2006 Cohesion Fund projects (including 
ex-ISPA projects) was 397. Table 4 provides information on the projects closed until the end 
of 2010 per Member State.  

Table 4. Cohesion Fund projects closed until the end of 2010 (including ex ISPA) 

Member State 

Czech Republic 

Estonia 

Greece 

Spain 

Ireland 

Cyprus 

Latvia 

Lithuania 

Hungary 

Malta 

Poland 

Portugal 

Slovenia 

Slovakia 

EU-14 

Bulgaria 

Romania 

EU-2 

TOTAL 

Total 
number 
of CF 
projects 

Projects closed as of end 2010 

Total number of 
projects closed 

Number of 
projects closed in 
2010 

Total paid in 
EUR 

Number of 
open projects 
as of end 2010 

58 

37 

124 

407 

10 

2 

46 

51 

47 

3 

130 

109 

28 

39 

1091 

38 

63 

101 

1 192 

27 

21 

58 

164 

4 

0 

19 

16 

12 

0 

6 

36 

13 

11 

387 

4 

6 

10 

397 

8 

1 

8 

549 846 707 

129 290 305 

1 298 010 305 

57 

4 272 630 917 

0 

0 

9 

1 

1 

0 

0 

6 

3 

3 

357 368 796 

0 

143 251 895 

171 791 687 

34 389 692 

0 

68 915 348 

825 206 357 

81 180 871 

145 781 900 

97 

8 077 664 780 

1 

4 

5 

27 407 620 

15 776 582 

43 184 202 

102 

8 120 848 982 

31 

16 

66 

243 

6 

2 

27 

35 

35 

3 

124 

73 

15 

28 

704 

34 

57 

91 

795 

2. 

ECONOMIC ENVIRONMENT AND CONDITIONALITY 

Article 6 of the Council Regulation (EC) No 1164/1994 which governs the Cohesion Fund for 
projects  approved  prior  to  the  end  of  2006  attaches  budgetary  policy  conditions  to  the 
disbursements  by  the  Fund.  It  provides  that  "no  new  projects  or,  in  the  event  of  important 
projects, no new project stages shall be financed by the Fund in a Member State in the event 
of  the  Council,  acting  by  a  qualified  majority  on  a  recommendation  from  the  Commission, 
finding  that  the  Member  State  […]  has  not  implemented  [its  stability  or  convergence 
programme] in such a way as to avoid an excessive deficit". 

At the end of 2010, fourteen Member States that were eligible for support under the Cohesion 
Fund (Greece, Spain, Portugal, Bulgaria, Romania, Cyprus, Czech Republic, Hungary, Latvia, 
Lithuania,  Malta,  Poland,  Slovakia  and  Slovenia)  were  in  the  excessive  deficit  procedure 
(EDP), which, according to the aforementioned Regulation, may under certain conditions be 
associated with the suspension of transfers from the Fund.  

- 5 - 

 
 
 
In 2010, there were eleven cases (Czech Republic, Spain, Latvia, Lithuania, Hungary, Malta, 
Poland,  Portugal,  Romania,  Slovenia  and  Slovakia)  where  effective  action  taken  in 
compliance  with  the  Council  recommendations  under  Article  126(7)  of  Treaty  on  the 
Functioning of the European Union (TFEU) was assessed. In three of those cases (Lithuania, 
Malta  and  Romania),  the  Council  also  issued  new  recommendations  under  Article  126(7) 
TFEU with a view to bringing the excessive deficit situation to an end, and later that year the 
Commission  also  concluded  that  action  had  been  taken  in  compliance  with  the  renewed 
recommendations. The Council further decided to open an excessive deficit procedure in two 
cases (Bulgaria and Cyprus). For both, the Commission concluded in early 2011 that effective 
action had been taken in compliance with the Council’s recommendations.  

The  Council  decided  to  give  notice  under  Article  126(9)  TFEU  to  Greece,  having  had 
established  in  2009  under  Article  126(8)  TFEU  that  the  authorities  had  not  taken  effective 
action  in  response  to  the  Council  recommendations  to  end  the  excessive  deficit,  although 
suspension  of  payments  from  the  Cohesion  Fund  was  not  recommended  at  the  time.  Since 
then,  compliance  with  the  Council  decision  is  examined  by  the  Commission  on  a  quarterly 
basis. On each of these occasions, the Council (on a recommendation from the Commission) 
also revises its decision under Article 126(9) TFEU.  

3. 

AUDITS AND FINANCIAL CORRECTIONS 

The Directorate-General for Regional Policy ensured a good audit coverage of the Cohesion 
Fund projects in all Member States concerned up to 2010, thanks to various audit enquiries 
focused on the specific risks linked to implementation. 

Cumulatively, the Directorate-General for Regional Policy has carried out in total 162 system 
audits and 14 closure audits on the 2000-2006 programming period Cohesion Fund projects. 
The  analysis  below  provides  details  on  the  work  carried  out  up  to  2010,  grouped  in 
accordance with the historical development of the Fund. 

3.1 

EU-4 Member States (Greece, Ireland, Portugal and Spain) 

A significant amount of work has been carried out for EU-4 Member States since 2001 and a 
high  level  of  audit  coverage  has  been  attained  (between  18%  and  56%  of  projects  in  each 
Member State, and up to 80% of allocations covered). Action plans were imposed to correct 
weaknesses  found  (for  example  verification  of  a  representative  sample  of  expenditure 
declared from 2000 to 2004 in Portugal) and/or financial corrections were made (for example 
in  Greece  as  regards  the  award  of  public  procurement  contracts).  For  these  four  Member 
States  the  assessment  on  the  reliability  of  the  winding-up  bodies  is  positive.  In  the  case  of 
Spain,  the  Directorate-General  for  Regional  Policy  established  by  the  end  of  2010  that  the 
many  of  submitted  winding-up  declarations  contain  irregular  expenditures  not  adequately 
quantified  and  corrected  by  the  winding-up  body,  mainly  related  to  irregular  public 
procurement  procedures  (complementary  works,  contract  modifications).  The  Directorate-
General  for  Regional  Policy  takes  mitigating  actions  by  assessing  each  case  individually  at 
closure  and  by  organising  hearings  with  the  Member  State  with  a  view  to  carrying  out  all 
necessary financial corrections at the closure of each project. 

- 6 - 

 
 
 
3.2  EU-10 Member States (first enlargement of the Cohesion Fund Member States: 

Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, 
Slovakia and Slovenia)  

As a result of the substantial amount of audit work carried out by the Directorate-General for 
Regional  Policy,  good  audit  coverage  has  been  attained  for  most  of  the  2004  enlargement 
Member  States  (between  5%  and  41%  of  projects).  The  assessment  on  the  reliability  of  the 
work of the winding-up body varies for this group of Member States. When problems were 
detected, the Directorate-General for Regional Policy requested the Member State authorities 
to implement remedial action plans and to carry out additional retrospective verifications, to 
strengthen the preparatory work for closure before sending the winding-up declarations, and 
to  apply  appropriate  financial  corrections  (for  example  audit  findings  in  the  public 
procurement area were addressed by application at closure of a net 2% flat rate correction on 
all Cohesion Fund projects in Poland). The main residual risk factors are: public procurement 
procedures and doubts about some winding-up bodies' ability to detect such irregularities or to 
impose  financial  corrections,  and  weaknesses  in  the  functioning  of  the  winding-up  body.  In 
one  case  (Hungary),  serious  issues  and  a  relatively  high  error  rate  have  been  reported  for 
transport  projects,  resulting  in  a  reservation  in  the  2010  Annual  Activity  Report  for  the 
Directorate-General for Regional Policy. All the risks identified are mitigated by the thorough 
verifications by the Directorate-General for Regional Policy when analysing the winding-up 
declarations at the closure of each project. The Directorate-General for Regional Policy will 
also continue to monitor these risks through audits of samples of remaining open projects. In 
four Member States (Cyprus, Estonia, Malta, Slovenia) there are no outstanding audit issues 
and  the  Directorate-General  for  Regional  Policy  can  place  a  high  degree  of  reliance  on  the 
winding-up declarations to close the projects. 

3.3  EU-2 Member States (second enlargement of the Cohesion Fund Member States: 

Bulgaria and Romania) 

As a result of the significant amount of audit work carried out by the Directorate-General for 
Regional  Policy  on  the  EU-2  a  good  audit  coverage  has  been  attained  (47%  of  projects 
audited for Bulgaria and 35% for Romania).  

As  pointed  out  in  the  Directorate-General's  Annual  Activity  Report  for  2010,  public 
procurement  audits  and  project  audits  carried  out  revealed  deficiencies  in  the  public 
procurement  area  (selection  and  award  criteria,  application  of  deadlines,  use  of  negotiated 
procedures)  and  weaknesses  in  management  verifications.  This  led  to  financial  corrections 
initiated by the Commission. The financial corrections reported in 2010 for Cohesion Fund in 
Bulgaria amount to EUR 18.47 million. For Romania, cumulative financial corrections since 
2008  have  amounted  to  EUR  11.41  million.  The  Directorate-General  for  Regional  Policy 
in  Bulgaria,  made 
identified  deficiencies 
recommendations for improvement, and is monitoring the situation closely. For Romania, an 
audit mission on the work of the winding-up body carried out in 2009 has been closed with 
unqualified  opinion,  providing  a  good  basis  for  relying  on  the  winding-up  declarations 
received. 

the  winding-up  body 

the  work  of 

in 

3.4  Other audit work in 2010 

Other  audit  work  undertaken  by  the  Commission  services  for  the  Cohesion  Fund  in  2010 
included the examination of the national annual control reports under Article 12 of Regulation 

- 7 - 

 
 
 
(EC)  No  1386/2002,  the  annual  summaries,  and  the  review  of  national  system  audit  reports 
submitted to the Commission by the Member States. By the end of 2010, the majority of the 
received  reports  had  been  analysed,  and  replies  had  been  sent  to  the  Member  States  with 
observations  and,  where  necessary,  requesting  additional  information  in  order  to  be  able  to 
extract as much assurance as possible from the results of national audit work.  

Annual coordination meetings are held bilaterally between the Commission and national audit 
authorities  to  exchange  information  on  the  implementation  of  audit  work  and  to  discuss 
progress on sample checks and follow-up of audit findings. The meetings covering audit work 
conducted  in  the  year  2009  were  held  during  the  first  half  of  2010.  The  annual  bilateral 
coordination meetings covering audit work carried out in 2010 were held in spring 2011. 

3.5  Management and control systems 

In  the  Directorate-General's  Annual  Activity  Report  for  2010,  for  the  functioning  of  the 
management and control systems (2000-2006), reported audit opinions expressed by the audit 
authorities may lead to three types of possible opinions: unqualified, qualified and adverse.  

An  unqualified  opinion  was  given  for  the  Cohesion  Fund  systems  in  six  Member  States 
(Cyprus, Estonia, Greece, Malta, Portugal and Slovenia). For nine Member States, the opinion 
was  qualified  with  a  moderate  impact  (Bulgaria  –  environment  and  transport  sector,  Czech 
Republic, Hungary - environment sector and technical assistance projects, Latvia, Lithuania, 
Poland, Romania, Slovakia and Spain). 

In  the  2010  Annual  Activity  Report  of  the  Directorate-General,  for  one  transport  sector 
project    in  Bulgaria  managed  by  the  National  Roads  Infrastructure  Agency,  a  qualified 
opinion with significant impact was given, due to breaches of public procurement rules and 
other weaknesses identified by the Commission and the European Court of Auditors, resulting 
in  a  reservation.  As  regards  the  Hungarian  transport  sector,  a  reservation  and  a  qualified 
opinion with significant impact was given due to the high error rate identified by the national 
audit body, the results of the Commission audit in 2009 detecting several public procurement 
irregularities,  weaknesses 
implementation  of  financial  corrections 
the 
recommended by the winding-up body, and in detection and correction of public procurement 
related irregularities at national level.  

identified 

in 

Table  5.  Cohesion  Fund  financial  corrections  decided  or  agreed  in  2010  by  period  and  by 
Member State (in EUR) 

Member State 

Reservation 

Cohesion Fund 

2009 AAR 

1994-1999 

2000-2006 

TOTAL 

Reservation 

2010 AAR 

Bulgaria 

Cyprus 

Czech Republic 

Estonia 

Greece 

Spain 

Hungary 

YES –
Environment 
sector 

NO 

NO 

NO 

NO 

NO 

NO 

18 473 452 

18 473 452 

YES – 1 
project 

6 814 711 

6 814 711  NO 

  NO 

  NO  

31 141 

-157 142 

-126 001  NO  

115 666 

21 006 031 

21 121 697  NO 

  YES – 

transport 

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Ireland 

Latvia 

Lithuania 

Malta 

Poland 

Portugal 

Romania 

Slovenia 

Slovakia 

TOTAL 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

Cohesion Fund 

627 640 

506 270 

30 177 

sector 

627 640  NO  

506 270   NO  

30 177  NO  

  NO 

111 246 392 

111 246 392  NO  

12 925 561 

12 925 561  NO  

1 728 070 

1 728 070  NO 

1 668 163 

1 668 163  NO 

  NO 

146 807 

174 869 325 

175 016 132 

Remark:  Includes  corrections  made  by  Member  States,  following  agreement  under  the  relevant procedure  or  as a  result  of 
implementation of action plans (which may cover many programmes) and formal Commission decisions. 

4. 

IRREGULARITIES NOTIFIED BY THE MEMBER STATES 

In 2010, OLAF opened 8 operational cases related to the Cohesion Fund and undertook 4 on 
the spot checks on economic operators3 as well as 2 missions to gather information. Typical 
problems identified by OLAF include the failure to abide by public procurement rules. 

As  this  report  covers  the  implementation  during  2010  of  Cohesion  Fund  projects  adopted 
under the 2000-2006 only notifications made under Regulation (EC) 1831/1994 are taken into 
account.  76  notifications  of  irregularities  involving  a  total  affected  amount  of  EUR 
34 564 486 in respect of projects co-financed by the EU related to the above mentioned period 
have  been  reported  to  the  Commission.  From  the  affected  amount  of  EUR  34 564 486,  an 
amount  of  EUR  9 089 496  still  needs  to  be  recovered.  Most  of  the  cases  were  reported  by 
Greece, Poland, Portugal and the Czech Republic (16, 15, 11 and 10 respectively). However, 
Greece,  Czech  Republic,  Spain  and  Lithuania  reported  approximately  75  %  of  the  involved 
amount. Table 6 shows the details by Member State.  

The  two  main  types  of  reported  irregularities  are  infringements  of  public  procurement  rules 
(60%) and ineligible expenditure (30%). 

3 Regulation (EC) N° 2185/1996, OJ L 292, 15 October 1996, p.2 

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Table  6.  Irregularities  and  EU  financial  impact  reported  by  Member  State  in  2010  under 
Regulation (EC) N 1831/1994– programming period 2000-2006 (in EUR) 

Member State 

Number of 
irregularities 

Affected amounts 

% 

Amounts to be 
recovered 

% 

Bulgaria  

Cyprus 

Czech Republic 

Estonia 

Greece 

Spain 

Hungary 

Ireland 

Latvia 

Lithuania 

Malta 

Poland  

Portugal 

Romania 

Slovenia 

Slovakia 

TOTAL 

0 

0 

10 

0 

16 

8 

3 

3 

2 

7 

0 

15 

11 

0 

0 

1 

76 

5 900 612 

17,07% 

467 210 

5,14% 

8 011 028 

23,18% 

18 046 

0,2% 

6 661 294 

19,27% 

5 779 950 

63,59% 

1 748 494 

1 627 701 

120 155 

5,06% 

4.71% 

0,35% 

1 748 494 

19,24% 

0 

0 

5 055 374 

14,63% 

626 036 

6,89% 

939 617 

2,72% 

0 

4 372 226 

12,65% 

321 775 

3,54% 

127 985 

0,37% 

127 985 

1,41% 

34 564 486 

100 

9 089 496 

100 

5. 

EVALUATION 

The  Commission  in  close  cooperation  with  the  Member  State  and  managing  authorities 
carries  out  the  ex-post  evaluation.  The  most  recent  Cohesion  Fund  ex-post  evaluation  was 
launched in 2009 examining all Cohesion Fund and ex-ISPA projects implemented during the 
years 2000-2006, and the final report is expected in January 2012. The evaluation assesses the 
contribution  of  the  Cohesion  Fund  and  ISPA  (i)  to  the  development  of  the  EU  transport 
system, (ii) to achieving the EU acquis in the field of environment and (iii) to the impact of 
ISPA as a preparation for the programmes of the Structural and Cohesion Funds. As part of 
the overall Cohesion Fund ex-post evaluation, ex-post cost-benefit analyses were  conducted 
for a sample of transport and environment projects, to identify lessons for future programming 
periods. 

The  first  results  from  the  ex-post  evaluation  for  transport  infrastructure  show  that  the 
Cohesion  Fund  co-financed  1,281  km  of  new  roads  and  3,176  km  of  reconstructed  roads 
(4,457 km roads in total). As regards, the rail sector 2,010 km of new rail and 3,840 km of 
reconstructed rail (5,350 km rail in total) were co-financed by the Cohesion Fund. 

- 10 - 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6. 

INFORMATION AND PUBLICITY 

As from 1 January 2007 all issues concerning the Cohesion Fund have been dealt within the 
Coordination Committee of the Funds (COCOF, established according to Regulation (EC) No 
1083/2006). 

Several  issues  relevant  for  the  Cohesion  Fund  were  presented  and/or  discussed  during  the 
meetings of the COCOF. These include: 

(cid:131)  DG  Regional  Policy  informed  about  a  proposal  for  a  more  flexible  final  date  of 
eligibility  (33rd  and  34th  meeting  of  the  Coordination  Committee  of  the  Funds, 
Brussels, 28 January 2010 and 10 March 2010); 

(cid:131)  DG  Regional  Policy  informed  the  Member  States  about  the  adoption  of  the 
Amendment of the Guidelines on the closure of Cohesion Fund and ex-ISPA projects 
2000-2006 (April 2010); 

(cid:131)  DG Regional Policy held a debate on the Revised Guidance note on the amendment of 
decisions  taken  by  the  Commission  for  Cohesion  Fund  projects  on  the  basis  of 
Regulation  (EC)  No  1164/1994  as  amended  (38th  meeting  of  the  Coordination 
Committee of the Funds, Brussels, 22 September 2010); 

(cid:131)  DG  Regional  Policy  presented  the  final  version  of  the  COCOF  note  08/0007/03 
"Revised guidance note on the amendment of decisions taken by the Commission for 
Cohesion Fund projects on the basis of Regulation (EC) No 1164/1994 as amended" 
of  24  September  2010  which  became  available  in  all  three  working  languages 
(39th Coordination  Committee  of  the  Funds  meeting,  Brussels  and  Mons,  20 and  21 
October 2010). 

In 2010, the Directorate-General for Regional Policy has continued to report in great detail on 
the  Cohesion  Fund  in  its  Annual  Activity  Report4  and  to  publish  details  of  major  projects, 
including those financed by the Cohesion Fund, for both of the periods 2000-2006 and 2007-
2013.  The  details  of  many  of  these  projects  are  available  in  a  searchable  database  on  the 
INFOREGIO  website.  Cohesion  Fund  projects  have  also  been  included  in  a  specific 
publication showcasing 150 examples of projects co-financed by European regional policy. 

4  Published at http://ec.europa.eu/atwork/synthesis/aar/index_en.htm  

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