Special Report No 14/2011 ‘Has EU assistance improved Croatia’s capacity to manage post-accession funding?’
Date: 2012-02-03
Institutions: European Court of Auditors
Subjects: Croatia, EU financing, European integration, accession criteria, pre-accession aid

EUROPEAN
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HAS EU ASSISTANCE IMPROVED 
CROATIA’S CAPACITY TO MANAGE 
POST-ACCESSION FUNDING?

EN

 
 
 
 
Special Report No 14 

 2011

HAS EU ASSISTANCE 
IMPROVED CROATIA’S 
CAPACITY TO MANAGE  
POST-ACCESSION FUNDING? 

(pursuant to Article 287(4), second subparagraph, TFEU)

EUROPEAN COURT OF AUDITORS

EUROPEAN COURT OF AUDITORS
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LUXEMBOURG

Tel. +352 4398-1
Fax +352 4398-46410
e-mail: euraud@eca.europa.eu
Internet: http://www.eca.europa.eu

Special Report No 14 

 2011

A great deal of additional information on the European Union is available on the Internet. 

It can be accessed through the Europa server (http://europa.eu).

Cataloguing data can be found at the end of this publication.

Luxembourg: Publications Office of the European Union, 2011

ISBN 978-92-9237-399-3

doi:10.2865/32546

© European Union, 2011

Reproduction is authorised provided the source is acknowledged.

Printed in Luxembourg

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

CONTENTS

3

PARAGRAPH

ACRONYMS	AND	ABBREVIATIONS

I–V	

EXECUTIVE	SUMMARY

1–7	

1–3	

4–7	

INTRODUCTION

BACKGROUND

EU	PRE-ACCESSION	ASSISTANCE	TO	PREPARE	FOR	MEMBERSHIP

8–10	

AUDIT	SCOPE	AND	METHODOLOGY

11–47	

OBSERVATIONS

11–19	

COHERENT	AND	WELL-TARGETED	PLANNING

11–13 

14–16 

17–19 

20–47	

 DRAWING ON THE LESSONS OF PREVIOUS ENLARGEMENTS, A NEW FRAMEWORK FOR PRE-ACCESSION 
ASSISTANCE HAS BEEN INTRODUCED

 THE IPA PROGRAMMING PROCEDURES ARE WELL DESIGNED AND HAVE PRIORITISED THE STRENGTHENING 
OF CROATIA’S ADMINISTRATIVE CAPACITY ALTHOUGH PROCUREMENT STILL NEEDS AT TENTION

 THE AUDITED PROJECTS HAVE ADDRESSED CAPACITY-BUILDING PRIORITIES ALTHOUGH ASSISTANCE SO FAR 
HAS BEEN LARGELY DIRECTED TO THE CENTRAL AUTHORITIES RATHER THAN THE REGIONAL LEVEL

	AN	IMPORTANT	CONTRIBUTION	TO	BUILDING	UP	CROATIA’S	CAPACITY	FOR	MANAGING	
POST-ACCESSION	FUNDING,	BUT	SIGNIFICANT	DELAYS	AND	AREAS	WHERE	FURTHER	PROGRESS	IS	
NEEDED

20–25 

PRE-ACCESSION ASSISTANCE HAS OFTEN NOT BEEN IMPLEMENTED ACCORDING TO THE ORIGINAL TIMETABLE

26–35 

STRUCTURAL FUNDS-TYPE PROJECTS: VARIED RESULTS BUT ‘LEARNING BY DOING’ BENEFITS

36-44 

PREPARING FOR EU AGRICULTURAL POLICY: MIXED RESULTS

45–47 

 PRE-ACCESSION ASSISTANCE HAS CONTRIBUTED TO STRENGTHENING CROATIA’S ADMINISTRATIVE CAPACITY 
IN THE FIGHT AGAINST CORRUPTION AND ORGANISED CRIME BUT SIGNIFICANT CHALLENGES REMAIN

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

	
4

48–53	

CONCLUSIONS	AND	RECOMMENDATIONS

48–51	

CONCLUSIONS

52–53	

RECOMMENDATIONS

ANNEX	I	 —	 THE	35	CHAPTERS	OF	THE	ACQUIS	(30	JUNE	2011)

ANNEX	II	 —	

	COMMISSION’S	GRANTING	OF	CONFERRAL	OF	MANAGEMENT	TO	CROATIAN	
AUTHORITIES	RESPONSIBLE	FOR	EU	FUNDS	(15	JUNE	2011)

ANNEX	III	—	 LIST	OF	PROJECTS	AUDITED

REPLY	OF	THE	COMMISSION

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

	
	
	
ACRONYMS AND ABBREVIATIONS

55

BRI: business-related infrastructure

CAP: common agricultural policy

CARDS: community assistance for reconstruction, development and stabilisation

Agriculture	and	Rural	Development	DG: Directorate-General for Agriculture and Rural Development

Enlargement	DG: Directorate-General for Enlargement

Employment,	Social	Affairs	and	Inclusion	DG: Directorate-General for Employment, Social Affairs and 
Inclusion

Regional	Policy	DG: Directorate-General for Regional Policy

EAFRD: European Agricultural Fund for Rural Development

ESF: European Social Fund

IPA: Instrument for pre-accession assistance

IPARD: Instrument for pre-accession assistance in rural development

ISPA: Instrument for structural policies for pre-accession

LPE: local partnership for employment

Obnova: Croatian word for ‘rebuilding’

OP: operational programme

Phare: the main EU pre-accession instrument 1989–2006

SAP: stabilisation and association process

Sapard: special accession programme for agriculture and rural development

USKOK: Office for Prevention of Corruption and Organised Crime

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

I.
A   k e y   a i m   o f   t h e   E U   p r e - a c c e s s i o n   a s s i s t -
a n c e   t o   C r o a t i a   ( 1 5 0   m i l l i o n   e u r o   p e r 
a n n u m   f ro m   2 0 0 7 )   i s   t o   h e l p   b u i l d   u p   t h e 
co u n t r y ’s   a d m i n i s t rat i ve   c a p a c i t y   i n   o rd e r 
for it to be able to manage the ver y signifi-
c a nt   f u n d i n g   C ro at i a   w i l l   re ce i ve   f ro m   t h e 
E U   a f te r   a cce s s i o n ,   n o t a b l y   f ro m   t h e   Eu ro -
pean Agr icultural Funds and the Struc tural 
and  Cohes io n Fu nds.

II.
T h e   o b j e c t i v e   o f   t h e   a u d i t   w a s   t o   a s s e s s 
h ow   e f fe c t i ve   t h e   E U   a s s i s t a n ce   h a d   b e e n , 
b o t h   i n   t e r m s   o f   i t s   r e l e v a n c e   a n d   t h e 
res ult s a c hieved.

III.
T h e   C o m m i s s i o n   h a s   d e v e l o p e d   n e w 
a p p r o a c h e s   s i n c e   t h e   2 0 0 4   a n d   2 0 0 7 
e n l a r g e m e n t s   t o   i m p r o v e   t h e   f r a m e w o r k 
f o r   a s s i s t a n c e .   P r o g r a m m i n g   p r o c e d u r e s 
a r e   w e l l   d e s i g n e d   t o   e n s u r e   c a p a c i t y -
b u i l d i n g   p r i o r i t i e s   a r e   a d d r e s s e d ,   a n d 
p ro j e c t s   ex a m i n e d   by   t h e   Co u r t   i n   Cro at i a 
w e r e   fo u n d   t o   b e   v e r y   r e l e v a n t .   H o w e v e r, 
m o re   a t te n t i o n   n e e d s   to   b e   p a i d   to   b u i l d -
i n g   u p   p r o c u r e m e n t   c a p a c i t y   a n d   t h e 
capacit y of  re gion al  an d l ocal  au t hor it ie s.

6

EXECUTIVE 
SUMMARY

IV.
I n ter ms of results, EU assistance has made 
a n   i m p o r t a n t   c o n t r i b u t i o n   t o   b u i l d i n g 
u p   C r o a t i a’s   c a p a c i t y   f o r   m a n a g i n g   p o s t -
a c c e s s i o n   f u n d i n g ,   i n c l u d i n g   t h r o u g h 
l e a r n i n g   b y   d o i n g.   H o we ve r,   i m p l e m e n t a -
t i o n   o f   a s s i s t a n c e   h a s   b e e n   d e l a y e d   a n d 
s o m e   o f   t h e   i n t e n d e d   r e s u l t s   o f   p r o j e c t s 
h a ve   ye t   t o   b e   s e c u re d.   I n   t h e   a re a   o f   t h e 
Struc tural and Cohesion Funds, lear ning by 
d o i n g   h a s   b e e n   p a r t i c u l a r l y   u s e f u l   t h o u g h 
a   f o c u s   o n   d e v e l o p i n g   m a j o r   i n f r a s t r u c -
t u r e   p r o j e c t s   h a s   b e e n   a t   t h e   e x p e n s e   o f 
d e ve l o p i n g   o t h e r   p ro j e c t s,   p a r t i c u l a r l y   a t 
t h e   r e g i o n a l   a n d   l o c a l   l e v e l .   R u r a l   d e v e l -
o p m e n t   m e a s u re s   h a ve   s u f fe re d   f ro m   l o w 
absor pt ion  an d progres s in c apa c it y  buil d-
i n g   h a s   b e e n   m o d e s t .   S o m e   i m p o r t a n t 
s t e p s   h a v e   b e e n   t a k e n   t o   s t r e n g t h e n   t h e 
a nt i - co r r u p t i o n   b o d y   b u t   s i gn i f i c a nt   c h a l -
len ges remain.

V.
T h e   r e p o r t   c o n c l u d e s   t h a t   E U   p r e - a c c e s -
s i o n   a s s i s t a n c e   i s   m a k i n g   a   s i g n i f i c a n t 
co nt r i b u t i o n   to   s u p p o r t i n g   Cro at i a   i n   p re -
p a r i n g   fo r   m a n a gi n g   E U   f u n d s   a f te r   a cce s -
sion but has so far been only par tially suc-
cessful. I t sets out recommendations which 
identify where additional assistance is par -
t i c u l a r l y   r e q u i r e d   f o r   f u r t h e r   p r o g r e s s   i n 
b u i l d i n g   c a p a c i t y   f o r   m a n a g i n g   p r e -   a n d 
p o s t- a cce s s i o n   f u n d s,   a n d   w h i c h   a re   l i k e l y 
t o   b e   re l e v a n t   t o   E U   p re - a c c e s s i o n   a s s i s t -
an ce in  ot her  countr ies.

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has assistance improved Croatia's capacity to manage post-accession funding?

INTRODUCTION

7

1.	

2.	

3.	

B AC KG R O U N D

In June 2000, the Feira European Council decided, in the frame -
w o r k   o f   t h e   E u r o p e a n   U n i o n’s   s t a b i l i s a t i o n   a n d   a s s o c i a t i o n 
p r o c e s s   ( S A P ) ,   t h a t   a l l   t h e   w e s t e r n   B a l k a n   c o u n t r i e s   s h o u l d 
have the prospec t of joining the EU. Croatia presented its ap -
p l i c at i o n   fo r   E U   m e m b e r s h i p   i n   2 0 0 3   a n d   re ce i ve d   t h e   s t at u s 
of candidate countr y from the Council in June 2004. Accession 
p a r t n e r s h i p s   w e re   e s t a b l i s h e d   i n   2 0 0 6   a n d   2 0 0 8   s e t t i n g   o u t 
what the European Commission considered to be priority areas 
for Cro at ia to  make p ro gress  in  be fore  acce s si on.

As for other candidate countries, in order to join the EU Croatia 
h a s   t o   m e e t   t h e   C o p e n h a g e n   c r i t e r i a 1,   a c c e p t   t h e   e n t i r e   E U 
l e g a l   f r a m e w o r k ,   k n o w n   a s   t h e   a c q u i s   c o m m u n a u t a i r e 2,   a n d 
make   E U  l aw  par t  of  it s   ow n  nat i ona l  legis lati on . To  fac i lit ate 
the accession negotiations, the acquis is divided into EU polic y 
chap te rs   (see   A n nex  I ).   Neg otiat ion s  on  t he  var ious  c ha pte r s 
are no t l imited to regu l ator y  and  l egi slati ve  as pec t s,  but als o 
cover the setting up of the necessar y administrative structures 
a n d   t h e   p ro gre s s   a c h i e ve d   i n   b u i l d i n g   u p   t h e i r   m a n a g e m e n t 
cap acit y.

 A c c e s s i o n   n e g o t i a t i o n s   w e r e   fo r m a l l y   o p e n e d   o n   3   O c t o b e r 
2005. The chapter-by- chapter negotiations with the EU Council 
s t a r te d   i n   J u n e   2 0 0 6   a n d   we re   c l o s e d   by   a   m i n i s te r i a l   a cce s -
sion conference on 30 June 2011. As provided for by the June 
2011 European Council, the Accession Treat y should be signed 
by the end of 2011 3. The target date for Croatia’s accession to 
the  EU, as  a greed  by th e M ember   St ates,  is  1  J uly  2 0 1 3 .

1  The Copenhagen criteria set 
by the European Council in June 

1993 consist of:  

(a) political criteria: stability 

of institutions guaranteeing 

democracy, the rule of law, 

human rights and respect for 

and protection of minorities;  

(b) economic criteria: the 

existence of a functioning 

market economy as well as 

the capacity to cope with 

competitive pressure and 

market forces in the Union; 

(c) the ability to assume the 

obligations of membership, 

including adherence to the 

aims of political, economic and 

monetary union.

2  The acquis communautaire 
denotes the whole range 

of principles, policies, laws, 

practices, obligations and 

objectives that have been 

agreed or developed within the 

European Union.

3  European Council Brussels, 
24 June 2011, EUCO 23/11.

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4  EU assistance to Croatia 
started in 1991, immediately 

after the outbreak of armed 

conflict in former Yugoslavia. 

Over the period 1991–2000, 

382 million euro was provided 

through the European 

Commission Humanitarian 

Office (1991–98), and through 

the Obnova (Croatian word 

for ‘rebuilding’) programme 

1998–2000,  which focused on 

the return and reintegration of 

refugees and displaced persons, 

reconstruction of infrastructure, 

economic revitalisation of war-

affected areas and demining.

4.	

5. 

E U 	 P R E - ACC E S S I O N 	 A S S I S TA N C E 	TO 	 P R E PA R E	
F O R 	 M E M B E R S H I P

The  p u r p o se  of   E U  p re -access ion  as si st an ce  is   to  s uppor t  th e 
a d o p t i o n   a n d   i m p l e m e n t a t i o n   o f   t h e   a cq u i s   co m m u n a u t a i r e , 
a n d   t o   h e l p   t h e   c a n d i d a t e   c o u n t r i e s   s t r e n g t h e n   t h e i r   a d -
m i n i s t rat i ve   c a p a c i t y   i n   p re p a rat i o n   fo r   m a n a gi n g   t h e   l a rg e r 
a m o u n t s   o f   E U   f u n d i n g   av a i l a b l e   t o   t h e m   o n c e   t h e y   b e co m e 
M e m b e r   St ate s.  Th e   Co m m i s s i o n   fo l l ows   t wo   co m p l e m e nt a r y 
app ro aches   to   stren gthening   adm in i st rati ve   c a pacit y.  Fir s tly, 
i t   d i r e c t l y   f u n d s   a c t i v i t i e s   s u c h   a s   i n s t i t u t i o n   b u i l d i n g ,   t h e 
set tin g  up   of   management  syste ms   an d  trai n in g.   S econ dly,   i t 
also suppor ts capacit y building through funding programmes 
similar to those under the European Agricultural Fund for Rural 
D evelopment (EAFRD) and the Struc tural and Cohesion Funds 
i n   o rd e r   to   e n a b l e   c a n d i d ate   co u nt r i e s   to   ‘ l e a r n   by   d o i n g ’   a s 
the y imp l ement s uc h p ro gramm es  be fore  th e ir  a cce ss ion .

Since 2001 the Commission has provided pre -accession assist-
a n c e   t o   C ro a t i a   t h ro u g h   s e ve r a l   i n s t r u m e n t s   ( s e e   Fi g u r e   1 ) 4. 
I nitially, this was provided through the Communit y assistance 
f o r   r e c o n s t r u c t i o n ,   d e v e l o p m e n t   a n d   s t a b i l i s a t i o n   ( C A R D S ) 
p r o g r a m m e .   T h e   P h a r e   p r o g r a m m e ,   t h e   C o m m i s s i o n’s   m a i n 
pre -access io n  ins trument,   was  introd uced   i n  Croati a  i n  2 0 0 5 . 
I t was complemented by the I nstrument for Struc tural Policies 
fo r   Pre - Acce s s i o n   ( I S PA) ,   f i n a n c i n g   i n f r a s t r u c t u re   p ro j e c t s   i n 
t h e   t r a n s p o r t   a n d   e nv i ro n m e n t   s e c t o r s   a n d   t h e   p re c u r s o r   o f 
the   EU  Co hesion   Fu nd,   an d  th e  s peci al  acces si on   program me 
fo r   r u ra l   d e ve l o p m e nt   ( S a p a rd )   w h i c h   wa s   s i m i l a r l y   i nte n d e d 
as a precursor for the European Agricultural Fund for Rural De -
ve l o pm ent  (EAF R D) .  Fro m  2 00 7  th e se   t hree   i ns tr ume nts   we re 
replaced by the I nstrument for Pre -Accession (IPA), which pro -
v i d e s   f u n d i n g   o f   a p p rox i m a t e l y   1 5 0   m i l l i o n   e u ro   p e r   a n n u m 
t h ro u g h   f i ve   c o m p o n e n t s   ( s e e   Ta b l e   1 ) .   Fo l l ow i n g   a c c e s s i o n 
EU  fu nd ing  to  Croat ia w il l  great ly  i n c rea se.

TA B L E 	 1

I PA 	 A S S I S TA N C E 	TO 	 C R O AT I A 	2007 – 13	 ( M I L L I O N 	 E U R O )

I. Transition 
assistance and 
institution 
building

II. Cross-border 
cooperation

III. Regional 
development

IV. Human 
resources 
development

V. Rural 
development

Total

299

105

379

104

184

1 071

Component

Totals  
(2007–13)

Source: COM(2009) 543 final of 14 October 2009 — Instrument for Pre-Accession Assistance (IPA) — Multiannual 
indicative financial framework for 2011–13.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

9

F I G U R E 	 1

E U 	 E X P E N D I T U R E 	 I N 	 C R O AT I A 	 B E F O R E 	 A N D 	 A F T E R 	 ACC E S S I O N

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Source: European Court of Auditors.

10

6.	

7. 

EU assistance to Croatia is planned by the Commission in con-
junc tion with the Croatian author ities. The accession par tner-
s h i p s   a n d   t h e   n at i o n a l   p ro gra m m e   fo r   i nte grat i o n   o f   C ro at i a 
into   th e  EU  are  th e  main  el ement s  of  th e  polit ic a l  f ramewor k 
for assistance. EU funding is allocated to the assistance pr ior -
ities set out in the multiannual indicative planning documents 
(M IP Ds )  es tab l is hed  by   th e  Commi s si on  i n   c los e  cons ul tat ion 
w i t h   t h e   n a t i o n a l   a u t h o r i t i e s.  T h e   C ro a t i a n   a u t h o r i t i e s   d r a w 
up relevant projec t proposals and, together with the Commis-
sio n,  sho r t-list   and  refin e  the  propos als   into  mat ure  proje c ts 
re a d y   fo r   i m p l e m e nt at i o n .   Pro j e c t s   a re   g e n e ra l l y   re q u i re d   to 
be completed within a 3- or 4-year time -frame. They are imple -
m e nte d   t h ro u g h   gra nt   s c h e m e s,   co nt ra c t s   ( fo r   s e r v i ce s,   s u p -
p l i e s   o r   p u b l i c   wo r k s )   o r   t w i n n i n g   co n t ra c t s 5.   As   re g a rd s   t h e 
as s istan ce  un der  the  I n strument   for   pre - acce ss ion   ass is ta nce 
in rural development (IPARD), the projec ts are selec ted solely 
by t he Croatian  com petent  ag enc y.

E U   a s s i s t a n c e   t o   C r o a t i a   h a s   b e e n   m a n a g e d   i n   t h r e e   w a y s . 
Under the C ARDS programme, it was predominantly managed 
centrally by the Commission. However, for the more recent in -
struments the Commission has conferred management powers 
on accredite d Croat ian author ities for man agin g EU  f un d in g 6, 
subjec t to ex ante checks by the EU Delegation in Croatia over 
tendering and contracting (decentralised management with ex 
ante   contro l s).  The  third,  m os t  ad van ce d,  man ag e ment  mod e 
is w he n t he nat ional  auth or ities are  as se ss e d by  th e  Commi s-
s i o n   t o   h a v e   s u f f i c i e n t   m a n a g e m e n t   c a p a c i t y   t o   m a n a g e   E U 
a s s i s t a n c e   w i t h o u t   a ny   e x   a n t e   c h e c k s   b y   t h e   E U   D e l e g a t i o n 
(d ecent ral ised  man ag ement   wit h out   ex  an te  controls). This   is 
the management mode which most closely corresponds to the 
w a y   i n   w h i c h   E U   f u n d i n g   i s   m a n a g e d   a f t e r   a c c e s s i o n ,   b u t   i n 
most areas the Commission has not yet approved its introduc -
t i o n 7.   A n n ex   I I   s e t s   o u t   t h e   d i f fe re nt   m a n a g e m e nt   m o d e s   fo r 
each  inst rument and  comp o nent. 

5  Twinning is an instrument 
designed by the Commission 

to facilitate the transfer of 

know-how from EU Member 

States' administrations to the 

administrations of recipient 

countries. They complement 

the transfer of know-how 

through service contracts with 

consultancy companies for 

technical assistance.

6  Before the Commission 
grants conferral of management 

powers, the authorities have 

to undergo an accreditation 

process by the government of 

Croatia.

7  The area of rural development 
is an exception in this regard. 

Decentralised management with 

ex ante checks is not applicable 

to the special accession 

programme for agriculture and 

rural development (Sapard) and 

the Instrument for pre-accession 

assistance in rural development 

(IPARD). The candidate country 

is required to obtain conferral 

of management powers for 

decentralised management 

without ex ante checks before 

starting implementation of 

measures under these two 

programmes.

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AUDIT SCOPE AND METHODOLOGY

11

8. 

The  au dit   was  car r ied  o ut  b et wee n   Jun e  2 0 1 0   a nd   Jun e  2 0 1 1 . 
I t aim ed at  answer ing th e overa ll que st ion : 

8  Overall EU assistance to 
Croatia from 2001 to 2009 

amounted to 860 million euro 

(see Table 3). 

‘Has EU pre -accession assistance been effec tive in suppor ting 
Croatia  pre pare fo r managing E U  fun ds  af ter   acce ss i on ?’

The  au dit  foc us ed on the fo llowin g  t wo  k e y  are as:

(a )  Has the Commission planned EU assistance in a way which 
s a t i s f a c t o r i l y   h e l p s   C r o a t i a   t o   p r e p a r e   f o r   m a n a g i n g   E U 
fu nds  af ter acces s ion ?

(b)  H ave   t h e   E U - f i n a n ce d   p ro j e c t s   a c h i e ve d   t h e   i nte n d e d   re -
sults in terms of strengthening Croatia’s capacit y for man-
aging   EU fund s?

9. 

The  audit   did  no t  s eek  to   address   th e   ef fe c ti ve n es s  of   th e   E U 
as s istan ce  in  s up p o r tin g  Croatia’s   adopt ion   an d  i mple me nt a-
t i o n   o f   t h e   a cq u i s   co m m u n a u t a i re .   I t   w a s   a l s o   n o t   t h e   a i m   o f 
the audit to make an overall assessment of Croatia’s readiness 
for EU m emb ership.

10.  

Th e au dit find ings  are b ase d  on :

(a )  an analysis of the documents relating to the programming 
and  imp le mentatio n o f th e  pre - acce ss i on  a s sis tan ce;

(b)  t he a udit  o f a samp l e o f 16  proj e c ts  f i n ance d by  IPA Com -
p o n e nt s   I ,   I I I   a n d   I V   a n d   by   t h e   p re v i o u s   f i n a n c i a l   i n s t r u -
me nt s  C AR DS ,  Phare,   ISPA  an d  S a pard  ( s ee  A nn ex  II I ) . Th e 
total value of EU assistance to these projec ts amounted to 
96,6 million euro, which represents approximately 11 % of 
ove ra l l   f u n d i n g   ove r   t h e   a u d i t   p e r i o d 8.  Th e   p ro j e c t s   we re 
a s s e s s e d   o n   t h e   b a s i s   o f   d o c u m e n t a r y   a n d   i n te r v i e w   e v i-
de nce a nd o n-th e -sp o t vis its  whi ch  took  pl ace  i n  O c tobe r 
201 0 to  eight o f th em;

(c)  inter views w ith  Comm is s ion  sta f f i n  Br us se ls  an d Z agre b;

(d )  i n te r v i e ws   w i t h   t h e   C ro a t i a n   m i n i s t r i e s,   a g e n c i e s   a n d   re -
gi o n a l   a n d   l o c a l   a u t h o r i t i e s   i nvo l ve d   i n   t h e   m a n a g e m e nt 
o f   E U   f u n d s   i n   S l a v o n s k i   B r o d ,   S p l i t ,   To v a r n i k ,   V i n k o v c i , 
Za dar and Z agreb.

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Special Report No 14/2011 – Has assistance improved Croatia's capacity to manage post-accession funding?

 
 
12

M A P

LO C AT I O N 	 O F 	T H E 	 P R O J E C T S 	 AU D I T E D

Source: Eurostat.

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Special Report No 14/2011 – Has assistance improved Croatia's capacity to manage post-accession funding?

OBSERVATIONS

13

CO H E R E N T 	 A N D 	W E L L - TA R G E T E D 	 P L A N N I N G

D R AW I N G 	 O N 	T H E 	 L E S S O N S 	 O F 	 P R E V I O U S	
E N L A R G E M E N T S ,	 A 	 N E W 	 F R A M E W O R K 	 F O R 	 P R E -
ACC E S S I O N 	 A S S I S TA N C E 	 H A S 	 B E E N 	 I N T R O D U C E D

11.  

I n  des igning  it s framewo r k for  ma naging  pre -acces s io n f un ds 
the Commission took account of lessons drawn from previous 
e n l a r g e m e n t s.  T h u s   t h e   i n t ro d u c t i o n   o f   I PA   i n   2 0 0 7   b ro u g h t 
to g e t h e r   a l l   p re - a cce s s i o n   f i n a n c i a l   a s s i s t a n ce   u n d e r   o n e   i n -
strument rather than it being dispersed across three different 
i n s t r u m e n t s   ( P h a r e ,   I S PA   a n d   S a p a r d )   a s   w a s   p r e v i o u s l y   t h e 
case. This  has  co ns iderab l y  facilit ate d  t he   plan n in g   of   EU   a s -
sist ance.

12.   Pr i o r   t o   I PA   s e p a r a t e   m e c h a n i s m s   c o v e r e d   t h e   c o o r d i n a t i o n 
o f   t h e   d i f fe re n t   i n s t r u m e n t s,   b u t   u n d e r   I PA   a   m o re   c o h e re n t 
s ys te m   i s   i n   p l a ce   fo r   co o rd i n at i n g   t h e   p l a n n i n g   o f   E U - f u n d -
e d   c a p a c i t y - b u i l d i n g   a c t i v i t i e s .   Wi t h i n   t h e   C o m m i s s i o n ,   t h e 
D i r e c t o r a t e - G e n e r a l   f o r   E n l a r g e m e n t   ( E n l a r g e m e n t   D G )   h a s 
b e e n   a s s i g n e d   t h e   l e a d   r o l e   i n   c o o r d i n a t i n g   I PA   a s s i s t a n c e 
with three other direc torates- general: the Direc torate - General 
f o r   R e g i o n a l   Po l i c y   ( R e g i o n a l   Po l i c y   D G )   f o r   C o m p o n e n t   I I I 
(R egional  de vel o p ment);  t he Dire c torate - G e n eral  for  E m ploy-
ment, S ocial Affairs and I nclusion (Employment, S ocial Affairs 
a n d   I n c l u s i o n   D G )   f o r   C o m p o n e n t   I V   ( H u m a n   r e s o u r c e s   d e -
ve l o p m e nt ) ;   a n d   t h e   D i re c to rate - G e n e ra l   fo r   Agr i c u l t u re   a n d 
R u r a l   D e ve l o p m e n t   (Agr i c u l t u re   a n d   R u r a l   D e ve l o p m e n t   D G ) 
for  Com po nent V   (R ural   developme nt) . The   four   direc torate s -
general coordinate their ac tivities related to the programming 
and implementation of the assistance, as well as to the nego -
ti at io n  of   c ha pte r s,   b o th   i nfor ma ll y   and   t h e n   th ro ug h  fo r m al 
inte r-ser vice  co nsul tat ion s.

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Special Report No 14/2011 – Has assistance improved Croatia's capacity to manage post-accession funding?

9  See European Court of 
Auditors Special Report  

No 5/2004 concerning Phare 

support to prepare candidate 

countries for managing the 

Structural Funds (OJ C 15, 

20.1.2005, p. 1).

14

13.  

Th e   Co m m i s s i o n   h a s   a l s o   s t re n g t h e n e d   t h e   l i n k   b e t we e n   t h e 
plann ing  and  imp l ement ation  o f  E U  pre -acces si on   as si st an ce 
and the pre -accession negotiation process. This has been done 
by introducing into this process benchmarks to be met before 
the closure of chapters. This new approach has been applied to 
the chapters where there is EU pre -accession funding, notably 
C h a p t e r   1 1   ( A g r i c u l t u r e   a n d   r u r a l   d e v e l o p m e n t )   a n d   C h a p -
ter  22  (R e gio na l  p ol ic y  and  coord in at ion   of   s tr uc t ural  in s tr u-
m e n t s ) ,   a n d   h a s   l e d   t o   a   g re a t e r   fo c u s   o n   C r o a t i a’s   p r o g r e s s 
in   b uil d ing   u p  it s   c apacit y  in  t he se   a rea s  w it h  th e   h elp  of   E U 
pre -accession assistance. Thus, for example, Chapter 11 bench-
mar ks in clu de the c ap acit y of th e  pay in g  ag e n c y  an d th is  ha s 
also been a key focus of EU assistance (see also paragraph 37). 
Never theless, this benchmark approach could have been more 
widely applied in Croatia than has ac tually been the case. For 
exam pl e,  t he   e st ab l is hment  of  s uf f ic i ent   ca pac it y   in   Croati an 
authorities for them to be authorised to manage pre -accession 
a s s i s t a n ce   w i t h o u t   e x   a n t e   co n t ro l   by   t h e   E U   D e l e g a t i o n   h a s 
not  b een us ed  as  a b enc hmar k  for  Ch apte r  2 2 .

T H E 	 I PA 	 P R O G R A M M I N G 	 P R O C E D U R E S 	 A R E 	W E L L	
D E S I G N E D 	 A N D 	 H AV E 	 P R I O R I T I S E D 	T H E 	 S T R E N G T H E N I N G	
O F 	 C R O AT I A’S 	 A D M I N I S T R AT I V E 	 C A PAC I T Y 	 A LT H O U G H	
P R O C U R E M E N T 	 S T I L L 	 N E E D S 	 AT T E N T I O N

14.   A significant shor tcoming of the EU assistance to prepare can-
didate countries for the 2004 and 2007 enlargements was that 
t h e   e c o n o m i c   a n d   s o c i a l   c o h e s i o n   p r o g r a m m e s   f i n a n c e d   b y 
P h a re   we re   o n l y   a n n u a l   p ro g r a m m e s 9.   C ro a t i a   h a s   b e n e f i t e d 
f ro m   t h e   a p p ro a c h   i n t ro d u c e d   u n d e r   I PA   w h i c h   p ro v i d e s   fo r 
multiannual operational programmes ak in to those used under 
the Struc tural Funds. This has both improved the possibilities 
fo r   ‘ l e a r n i n g   b y   d o i n g ’   b y   e s t a b l i s h i n g   p l a n n i n g   p r o c e d u r e s 
c l o s e r   t o   t h o s e   a p p l i c a b l e   p o s t   a c c e s s i o n   a n d   a l s o   e n a b l e d 
b e t t e r   p l a n n i n g   o f   s p e c i f i c   c a p a c i t y - b u i l d i n g   i n t e r v e n t i o n s. 
Under IPA, the Regional Polic y DG and the Employment, Social 
Aff airs and I nc lusio n D G have als o bee n  able  to prov ide  th e ir 
exper tise to assist the Croatian authorities in this multiannual 
plann ing p ro cess  more eas ily  th an  was t h e c as e  for  th e prev i-
ou s t wo acces sions.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

15

15.   A key step towards better post-accession management of fund-
i n g   b y   C r o a t i a   h a s   b e e n   t h e   C o m m i s s i o n’s   i n t r o d u c t i o n   o f   a 
mo re   r ig oro us  ap p roach   to  ens ur i ng   Croati a  ha s  th e   capaci t y 
for man aging it s pre -acces sion  f und in g  t h an  was  th e c as e for 
previous candidate countries 10. A central par t of this approach 
is the planning system it has developed for assessing Croatia’s 
capacit y-building needs and identifying the necessar y assist-
a n c e   t o   m e e t   t h e s e   n e e d s ,   i n   o r d e r   t o   b e   a b l e   t o   i n t r o d u c e 
d e c e n t r a l i s e d   m a n a g e m e n t ,   f i r s t   w i t h   e x   a n t e   c h e c k s   b y   t h e 
D e l e g a t i o n   a n d   s u b s e q u e n t l y   w i t h o u t   t h e s e   e x   a n t e   c h e c k s 
(see  p aragra ph 7).

16.   Howeve r,  t here  remain s  a  p ar tic ul ar   ne e d  to  foc us   ass ist ance 
o n   h e l p i n g   t o   b u i l d   u p   C r o a t i a’s   p r o c u r e m e n t   c a p a c i t y.   T h e 
Co u r t ’s   f i n a n c i a l   a u d i t s   i n   t h e   f ra m e wo r k   o f   i t s   a n n u a l   St ate -
m e n t   o f   A s s u r a n c e   o n   t h e   E U   b u d g e t   c o n s i s t e n t l y   f i n d   t h a t 
pro c urem ent  is a m ajo r so urce of  ir re gula r i ti es  in  EU  M e mbe r 
S t a t e s   i n   t h e   a r e a   o f   c o h e s i o n 1 1.   A s   Ta b l e   2   s h o w s ,   t h e   E U 
D e l e g a t i o n   i n   C r o a t i a   i n   t h e   f r a m e w o r k   o f   i t s   d e c e n t r a l i s e d 
m a n a g e m e n t   e x   a n t e   c h e c k s   h a s   r e g u l a r l y   h a d   t o   r e j e c t   t h e 
d o c u m e n t s   s u b m i t t e d   b e c a u s e   t h e y   a r e   n o t   f u l l y   c o m p l i a n t 
with EU procedures. While there has been a clear reduc tion in 
re j e c t i o n   rate s   f ro m   2 0 0 7   to   2 0 1 0 ,   t h e   E n l a rg e m e nt   D G   i n   i t s 
2 0 1 0   An n u a l   Ac t i v i t y   R e p o r t   s t ate d   t h at   t h e y   h ave  ‘re m a i n e d 
relatively high’ for more complex contrac ts, mainly relating to 
p u b l i c   wo r k s,   d u e   to   t h e  ‘i n a d e q u ate   q u a l i t y   o f   t h e   te c h n i c a l 
contro l  expe r tise’ 12 (s ee a l so  paragraph 2 3) .

10  Prior to the previous 
enlargements, the management 

mode of decentralised 

management with ex ante 

checks was used in candidate 

countries without the 

Commission first making an 

assessment of the country’s 

capacity to effectively manage 

funding through this system.

11  See, for example, paragraphs 
4.18–4.20 of the Court’s Annual 

Report concerning the financial 

year 2009 (OJ C 303, 9.11.2010,  

p. 1). One of the two main 

sources of error was ‘serious 

failures to respect public 

procurement rules’.

12  Enlargement DG, 2010 Annual 
Activity Report, p. 20.

TA B L E 	 2

R AT E 	 O F 	T E N D E R 	 E VA LUAT I O N 	 R E P O R T S 	 A N D 	 CO N T R AC T S 	 S U B M I T T E D	 	
BY 	 C R O AT I A N 	 AU T H O R I T I E S 	W H I C H 	W E R E 	 R E J E C T E D 	 BY 	 E U 	 D E L E G AT I O N	 	
I N 	 C R O AT I A 	 ( % )

Evaluation reports

Contracts

First submission

Further submissions

First submission

Further submissions

Source: Enlargement DG, 2010 Annual Activity Report.

2007

60

34

60

34

2008

22

35

20

37,5

2009

2010

20

67

21

33

14

20

20

10

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16

13  A 2009 review of Phare 
assistance to prepare for the 

Structural Funds in Croatia 

carried out by consultants 

financed by the Commission 

found that capacity building for 

local and regional bodies was 

not receiving sufficient priority. 

The review recommended that 

the experience of new Member 

States be heeded and that 

‘the process of developing the 

required capacity not be left 

until it was too late for such 

bodies to participate effectively’.

17.  

18. 	

19. 	

T H E 	 AU D I T E D 	 P R O J E C T S 	 H AV E 	 A D D R E S S E D 	 C A PAC I T Y -
B U I L D I N G 	 P R I O R I T I E S 	 A LT H O U G H 	 A S S I S TA N C E 	 S O	
FA R 	 H A S 	 B E E N 	 L A R G E LY 	 D I R E C T E D 	TO 	T H E 	 C E N T R A L	
AU T H O R I T I E S 	 R AT H E R 	T H A N 	T H E 	 R E G I O N A L 	 L E V E L

Th e   Co m m i s s i o n   h a s   g e n e ra l l y   e n s u re d,   i n   co n s u l t a t i o n   w i t h 
t h e   C r o a t i a n   a u t h o r i t i e s ,   t h a t   t h e   k e y   c a p a c i t y   n e e d s   h a v e 
b e e n   i d e n t i f i e d.  Th e re   i s   a   s y s te m a t i c   a p p ro a c h   to   a s s e s s i n g 
a n d   u p d a t i n g   C r o a t i a’s   n e e d s   fo r   C o m m i s s i o n   f u n d i n g :   t o p -
d o w n   f r o m   t h e   a c c e s s i o n   p a r t n e r s h i p   a n d   b o t t o m - u p   w i t h 
p r o j e c t   p r o p o s a l s   f r o m   t h e   p o t e n t i a l   b e n e f i c i a r i e s ,   m a i n l y 
Croatian  minist r ies.

T h e   E U   a s s i s t a n c e   i n   t h e   f o r m   o f   s p e c i f i c   p r o j e c t s   c o m p l e -
m e n t e d   t h e   C r o a t i a n   a u t h o r i t i e s’  o w n   e f f o r t s   t o   s t r e n g t h e n 
minist r ies’  cap ac it y  an d  set   up  bodi e s  s peci fi c all y  to  man ag e 
f u t u re   E U   f u n d i n g.   I n   g e n e r a l,   t h e   s p e c i f i c   o b j e c t i ve s   o f   t h e 
1 6   a u d i t e d   p r o j e c t s   w e r e   v e r y   m u c h   i n   l i n e   w i t h   t h e   c a p a -
c i t y - b u i l d i n g   p r i o r i t i e s   s e t   o u t   i n   t h e   a c c e s s i o n   p a r t n e r s h i p. 
Even  w here  pro jec t s  did  not  in clude   direc t   capacit y   bui ld in g 
through technical assistance and t winning contrac ts, projec ts 
h a d   a n   i m p o r t a n t   ‘ l e a r n i n g   b y   d o i n g ’   d i m e n s i o n   w h i c h   p r o -
v i d e d   t h e   o p p o r t u n i t y   t o   g a i n   v a l u a b l e   p r a c t i c a l   e x p e r i e n c e 
of  managing  EU fu nd in g b efore  th e  acce s si on.

I n   n e a r l y   a l l   c a s e s   t h e   C o m m i s s i o n   f u n d i n g   w a s   t a r g e t e d   a t 
C ro a t i a n   b o d i e s   w h i c h   wo u l d   b e   re s p o n s i b l e   fo r   i m p l e m e n t-
ing EU assistance post accession. However, the assistance was 
l a rg e l y   d i re c te d   to   ce nt ra l   b o d i e s   w h o   wo u l d   b e   re s p o n s i b l e 
f o r   m a n a g i n g   p o s t - a c c e s s i o n   f u n d i n g   a n d   m u c h   l e s s   t o   t h e 
r e g i o n a l   l e v e l ,   a l t h o u g h   r e g i o n a l   b o d i e s   h a v e   a n   i m p o r t a n t 
role to play in the implementation of post-accession funding. 
As a result there is a r isk that bodies at regional level will not 
have had adequate experience in implementing EU assistance 
by t he t ime o f t he access io n 13.

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17

A N 	 I M P O R TA N T 	 CO N T R I B U T I O N 	TO 	 B U I L D I N G	
U P 	 C R O AT I A’S 	 C A PAC I T Y 	 F O R 	 M A N AG I N G	
P O S T - ACC E S S I O N 	 F U N D I N G ,	 B U T 	 S I G N I F I C A N T	
D E L AYS 	 A N D 	 A R E A S 	W H E R E 	 F U R T H E R	
P R O G R E S S 	 I S 	 N E E D E D

P R E - ACC E S S I O N 	 A S S I S TA N C E 	 H A S 	 O F T E N 	 N OT 	 B E E N	
I M P L E M E N T E D 	 ACCO R D I N G 	TO 	T H E 	 O R I G I N A L 	T I M E TA B L E

20.   Table 3 shows the ex tent to which planned spending has been 
committed and spent. The Phare, ISPA and Sapard programmes 
a l l   ex p e r i e n ce d   d i f f i c u l t i e s   i n   i m p l e m e nt i n g   f u n d s   a cco rd i n g 
to the or iginal timetables. Under IPA slow implementation re -
mains an issue, par ticularly for the transpor t and environment 
o p e r a t i o n a l   p r o g r a m m e s   ( I PA   I I I )   a n d   t h e   I PA R D   p r o g r a m m e 
(IPA  V ),   wit h  th e  r isk  t hat  fu nd s  wi ll  h ave  to  be  d ecom mit ted 
due  to  the se del ays 14.

21. 	

Th e   i m p l e m e n t a t i o n   o f   E U   a s s i s t a n ce   i n   C ro a t i a   h a s   s u f fe re d 
s e ve ra l   s t a r t- u p   d e l ays   fo l l ow i n g   t h e   i nt ro d u c t i o n   o f   n e w   i n-
s t r u m e n t s.   C ro a t i a   b e c a m e   e l i g i b l e   fo r   p re - a c c e s s i o n   a s s i s t -
ance under the Phare, ISPA and Sapard instruments from 1 Jan-
u a r y   2 0 0 5 .   H o w e v e r,   d u e   t o   t h e   n e e d   t o   d e t e r m i n e   s e c t o r a l 
o b j e c t i ve s   w h i c h   c o r re s p o n d e d   t o   t h e   s t r a t e g i c   p r i o r i t i e s,   i t 
t h e n   t o o k   a p p rox i m a t e l y   1 2   m o n t h s   fo r   t h e   I S PA   a n d   S a p a rd 
pro gram mes  an d  18  m onths   for   t he   Ph are   program me  before 
t h e   f i n a n c i n g   a g r e e m e n t s   c o u l d   b e   f i n a l i s e d .   I n   t h e   c a s e   o f 
t h e   2 0 0 7   p r o g r a m m e s   u n d e r   t h e   d i f f e r e n t   I PA   c o m p o n e n t s , 
financing agreements were not concluded until approximately 
16   mo nt hs  af ter   the  entr y   into  force   of   th e   IPA  i mple ment in g 
re g u l a t i o n .  Th i s   w a s   m a i n l y   d u e   t o   t h e   t i m e   re q u i re d   fo r   t h e 
conferral of management powers before implementation could 
b e g i n ,   a   n e w   c o n d i t i o n   r e q u i r e d   b y   t h e   I PA   r e g u l a t i o n   ( s e e 
paragrap h 7) .

14  Article 166(3) of the financial 
regulation states that under 

the ‘N+3’ rule the Commission 

shall automatically decommit 

any portion of the budgetary 

commitment for the programme 

that has not been paid out by 

31 December of the third year 

following the year in which 

the budgetary commitment 

was made (Council Regulation 

(EC, Euratom) No 1605/2002 of 

25 June 2002 on the financial 

regulation applicable to the 

general budget of the European 

Communities (OJ L 248, 

16.9.2002, p. 1)).

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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22. 	

S e v e r a l   p r e - I PA   p r o j e c t s   a u d i t e d   b y   t h e   C o u r t   w e r e   n o t   y e t 
re a d y   to   b e   i m p l e m e nte d   a f te r   t h e   f i n a n c i n g   a gre e m e n t   h a d 
b e e n   s i g n e d.  Th i s   w a s   b e c a u s e   t h e   n e ce s s a r y   te r m s   o f   re fe r -
ence or tec hnic al  sp ec ification s n e ede d to e n able  th e l aun ch 
of tenders had not been finalised by the Croatian author ities. 
T h u s   t h e   a v e r a g e   t i m e   f r o m   t h e   f i n a n c i n g   a g r e e m e n t   t o   t h e 
tender launch was 12 months for the contrac ts audited. There 
w a s   s o m e   i m p r o v e m e n t   u n d e r   I PA ,   t h e   c o r r e s p o n d i n g   t i m e 
 being reduced to 8 months, but there remains scope for better 
pe r fo r mance in t his area.

TA B L E 	 3

I M P L E M E N TAT I O N 	 O F 	 E U 	 A S S I S TA N C E 	TO 	 C R O AT I A	 	
( M I L L I O N 	 E U R O,	 M A R C H 	2011 )

Programmes in Croatia

Budget

% of budget  
contracted

% of budget paid1

CARDS

Phare

ISPA

Sapard

IPA I 2007 

IPA I 2008

IPA I 2009

IPA II 2007–09

IPA III 2007–09 (of which)

–  Operational programme (OP) transport

–  OP environment

–  OP regional competitiveness

IPA IV 2007–09 — OP human resources development

IPA V 2007–09 (IPARD) — Measures 101 and 103

Total

1  Excluding advance payments of 30 % for Components III, IV, V.

Source: EU delegation to Croatia.

260

147

59

25

45

42

42

8

143

54

54

35

38

51

860

97 %

86 %

96 %

62 %

90 %

27 %

11 %

64 %

29 %

20 %

25 %

48 %

71 %

12 %

68 %

92 %

78 %

63 %

48 %

57 %

20 %

11 %

36 %

7 %

4 %

2 %

20 %

9 %

0 %

55 %

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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23.   O n ce   te n d e r s   we re   l a u n c h e d   d e l ays   f re q u e nt l y   a l s o   o cc u r re d 
due to the Croatian author ities’ still limited capacit y for man-
a g i n g   E U   p r o c u r e m e n t   p r o c e d u r e s   ( s e e   p a r a g r a p h   1 6 ) .   T h i s 
has meant that the EU Delegation has frequently had to rejec t 
t e n d e r   a n d   c o n t r a c t   d o c u m e n t a t i o n   a n d   s e n d   i t   b a c k   t o   t h e 
C r o a t i a n   a u t h o r i t i e s   f o r   t h e   n e c e s s a r y   i m p r o v e m e n t s   t o   b e 
made   (s ee   Table   2 ).  Th is  l ed  to  delays   wh ich   would  n ot    occ ur 
if the documentation were prepared to the set standards. The 
Cour t examined a sample of 18 contrac ts and found that con -
t r a c t s   w e r e   c o n c l u d e d   o n   a v e r a g e   1 0   m o n t h s   l a t e r   t h a n   t h e 
or iginal timetable, which is quite considerable when the nor -
mal  p ro je c t t ime -frame  is l im ited  to 3 to 4 year s. 

24.  

I n   v i e w   o f   t h e   d i f f i c u l t i e s   e n c o u n t e r e d   b y   C r o a t i a   i n   i m p l e -
menting the EU assistance according to the original timetable, 
the Commission ex tended the implementation deadlines by 1 
ye a r   fo r   p ro j e c t s   a s s i s te d   u n d e r   P h a re   2 0 0 5 ,   P h a re   2 0 0 6   a n d 
S apard, and by either 1 or 2 years for the ISPA projec ts. Based 
on  t hat   exp er ience,   l o ng er  dead lin e s  were   i nt roduce d  by   th e 
C o m m i s s i o n   f o r   I PA   C o m p o n e n t   I .   H o w e v e r,   f o r   I PA   C o m p o -
n e n t s   I I I ,   I V   a n d  V   t h e   d i s b u r s e m e n t   d e a d l i n e s   b a s e d   o n   t h e 
‘N+3’ rule represent a significant challenge (see footnote 14).

25.   As   t h e   fo l l ow i n g   s e c t i o n s   d e m o n s t rate   i n   re l at i o n   to   s p e c i f i c 
p r o j e c t s   ( s e e   p a r a g r a p h s   2 6   t o   4 7 ) ,   d e l a y s ,   m a i n l y   r e s u l t i n g 
from capacit y issues within the Croatian administration, have 
redu ce d t he progress made throug h  pre -acces si on  a ss is tan ce 
in  b uil ding u p  Cro atia’s  administ rati ve ca pac it y  be fore acce s-
s i o n .  Th i s   p o i n t s   to   a   r i s k   t h a t   C ro a t i a   w i l l   n o t   h ave   t h e   c a p  -
acit y to ful l y ab so r b  the in crease d pos t-a cce ss ion  all ocatio ns 
wit hin t he reg u lato r y  t ime - frame s.

S T R U C T U R A L 	 F U N D S - T Y P E 	 P R O J E C T S :	VA R I E D 	 R E S U LT S	
B U T 	‘ L E A R N I N G 	 BY 	 D O I N G’	 B E N E F I T S

26.  

The audit examined eight Struc tural Funds-type projec ts relat-
i n g   t o   fo u r   k e y   a re a s   ( s e e   Fi g u r e   2 ) .  T h e   a c h i e ve m e n t   o f   t h e 
pro jec ts’  intend ed  resu l ts  var ied,   par t ly   d ue   to  de lays,  a s  d id 
t h e i r   p o t e n t i a l   s u s t a i n a b i l i t y.   I t   w a s   c l e a r   t h a t   t h e   C r o a t i a n 
a u t h o r i t i e s   a re   b e n e f i t i n g   f ro m   ‘ l e a r n i n g   by   d o i n g ’   b u t   t h e re 
are s til l  cap acit y is s ues  whic h n e ed  atte ntion .

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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F I G U R E 	 2

P R E PA R AT I O N 	 F O R 	 S T R U C T U R A L 	 A N D 	 CO H E S I O N 	 F U N D S 	 I N 	 C R O AT I A

Source: European Court of Auditors.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

15  Specific, measurable, 
achievable, relevant and timely.

16  Another four counties were 
covered by an earlier 2002 

CARDS project.

21

27.  

28.  

29.  

s e v e r a l   a s p e c t s  o f  t h e  m o n i t o r i n g  a n d  e v a l u a t i o n  o f  a s s i s t a n c e 
w e r e   s t i l l  i n  n e e d  o f  i m p r o v e m e n t

I nsufficient use of ‘SMAR T’ 15 objec tives and related indicators 
o f t e n   m a d e   i t   d i f f i c u l t   t o   a s s e s s   p ro j e c t   re s u l t s,   p a r t i c u l a r l y 
in relation to grant schemes. While the follow-up IPA projec ts 
which the Cour t examined were better in this respec t than the 
p re - I PA   p ro j e c t s   t h e re   w a s   s t i l l   s c o p e   fo r   i m p rov i n g   t h e   w ay 
in  w hic h p ro je c t  effec t ivenes s was a ss es se d. Th e Commi ss ion 
has a well- designed monitor ing system  which is being imple -
mented by t he Croat ian au th or it ie s a lth oug h t h e audi t foun d 
that on occasion the monitor ing repor ts tended to underesti-
mate the problems faced by projec ts. The projec ts have some -
times not been subjec t to ex ternal assessment, par ticularly in 
relation to the grant schemes financed. This is par tly because 
the   Co mmis sion   intend s  to  com bin e  an   i nte r i m  e va luat ion   of 
I PA   p r o g r a m m e s   w i t h   a n   e x   a n t e   e v a l u a t i o n   o f   o p e r a t i o n a l 
p r o g r a m m e s   f o r   t h e   S t r u c t u r a l   Fu n d s ,   b u t   t h i s   a p p r o a c h   i s 
d e l a y i n g   fe e d b a c k   o n   p o s s i b l e   i m p r o v e m e n t s   t o   I PA   p r o j e c t 
as s istan ce.

t h e  s u s t a i n a b i l i t y  o f  r e s u l t s  f o r  t h e  h u m a n  r e s o u r c e s 
d e v e l o p m e n t  p r o j e c t s  a u d i t e d  i s  u n c e r t a i n 

Th e C AR D S 20 04  p rojec t includ ed  t h e f ir s t de ce nt ralis ed  E S F-
t ype scheme in Croatia and provided valuable capacit y-build -
i n g   ex p e r i e n ce   i n   t h e   fo u r   co u nt i e s   cove re d   by   t h e   p ro j e c t 1 6. 
I n  eac h  cou nt y  a  l o cal   p ar tner sh i p  for   em ploy me nt   ( L P E )  was 
c re ate d   w h i c h   u n d e r to o k   a   ra n g e   o f   h u m a n   re s o u rce s   d e ve l -
o p m e nt   a c t i v i t i e s.   H owe ve r,   w h e n   E U   f u n d i n g   e n d e d   i n   2 0 0 8 
t h e   L P E s   b e c a m e   l a rg e l y   i n a c t i ve,   c a l l i n g   i n to   q u e s t i o n   t h e i r 
sus t ainabil it y.

T h e   l a c k   o f   f i n a n c i a l   a n d   o t h e r   s u p p o r t   t o   e x i s t i n g   L P E s   d i d 
n o t   a u g u r   w e l l   f o r   t h e   d e v e l o p m e n t   o f   L P E s   i n   C r o a t i a’s   1 3 
other counties, which was one of the aims of the follow-up IPA 
L P E   p r o j e c t .   M o r e o v e r,   t h e   l a t e   s t a r t   o f   t h e   s e r v i c e   c o n t r a c t 
fun ded  as   p ar t   of  the  I PA  p rojec t   me ant  t hat   th e re   was  i ns uf-
ficient   t ime   fo r  t he  consu l tants  e mployed   un d er   t he   contrac t 
t o   h e l p   i n   t h e   s e t t i n g   u p   o f   L P E s   i n   t h e s e   c o u n t i e s   b e f o r e 
gra nt   s c h e m e s   we re   l a u n c h e d.   H owe ve r,   t h e   Co m m i s s i o n   h a s 
re co gn i s e d   t h at   s u s t a i n a b i l i t y   i s   a   k e y   i s s u e   a n d   i s   a s s e s s i n g 
w h at   wo u l d   b e   t h e   b e s t   m o d e l   to   b e   a d o p te d   fo r   t h e   L P E s   to 
im p rove th e p ro s p ec ts for th eir  s us ta in abil it y.

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

17  The 2009 ad hoc interim 
evaluation of Phare assistance 

to preparation for Structural 

Funds in Croatia also concluded 

that too much emphasis is put 

on less developed regions and 

that all other regions in Croatia 

also face significant challenges 

in terms of the European Union 

competitiveness.

18  This corridor follows the route 
Salzburg– Ljubljana–Zagreb–

Belgrade–Niš–Skopje–Veles–

Thessaloniki.

22

30.  

31.  

s i g n i f i c a n t  c a p a c i t y  i s s u e s  r e m a i n  i n  r e l a t i o n   t o  t h e  r e g i o n a l 
c o m p e t i t i v e n e s s  p r o j e c t s  f u n d e d

Th e  res ul ts  o f  t he  Phare  2005  bu sin e s s-re late d  i n f ra st r uc tu re 
( B R I )   p r o j e c t   v a r i e d .   T h e   i m p l e m e n t i n g   b o d i e s   w e r e   a b l e   t o 
u s e   t h e   f u l l   b u d g e t ,   a l b e i t   w i t h   d e l a y s ,   a n d   e n s u r e   t h a t   f o r 
e a c h   s e l e c t e d   g r a n t   p r o j e c t   i n f r a s t r u c t u r e   w a s   p u t   i n   p l a c e. 
However, the audit of the Benkovac grant project (one of seven 
g r a n t s   u n d e r   t h e   P h a re   B R I   s c h e m e )   i n d i c a t e d   t h a t   t h e   l o c a l 
authorities were not sufficiently addressing the sustainabilit y 
o f   t h e   E U - f u n d e d   i n f ra s t r u c t u re.  Th e re   we re   s h o r tco m i n g s   i n 
t h e   m a i n te n a n ce   o f   t h e   i n f ra s t r u c t u re   a n d   n o   s t rate g y   to   at-
tra c t  com panies ;  the inf ras truc ture  wa s l it tle  use d.

T h e   d e s i g n   o f   t h e   f o l l o w - u p   I PA   2 0 0 7   B R I   p r o j e c t   t o o k   i n t o 
a c c o u n t   a n d   b u i l t   u p o n   t h e   e x p e r i e n c e   o f   t h e   2 0 0 5   p r o j e c t . 
H o w e v e r,   a s   f o r   t h e   2 0 0 5   p r o j e c t ,   t h e r e   w e r e   d e l a y s   i n   t h e 
g r a n t   s c h e m e   e v a l u a t i o n   p r o c e d u r e   a n d   g r a n t   b e n e f i c i a r i e s 
f r e q u e n t l y   d i d   n o t   h a v e   t h e   c a p a c i t y   t o   p r e p a r e   c o m p l e t e 
t e c h n i c a l   d o c u m e n t a t i o n .  T h e   p o t e n t i a l   b e n e f i t s   i n   t e r m s   o f 
l e a r n i n g   by   d o i n g   we re   re d u ce d   b e c a u s e   t h e   p ro j e c t   d i d   n o t 
d i re c t l y   t a rg e t   t h e   d e s i gn ate d   b o d i e s   re s p o n s i b l e   fo r   t h e   f u -
t u r e   r e g i o n a l   c o m p e t i t i v e n e s s   o p e r a t i o n a l   p r o g r a m m e.   Fu r -
t h e r m o r e ,   f o c u s i n g   o n   t h e   1 0   l e a s t   d e v e l o p e d   c o u n t i e s   i n 
Croatia mea nt  that l o cal  au thor i ti es  in  ot he r  counti es  di d n ot 
be nefit  f rom th e o p p o r tu nit y  to le ar n  f rom i mple me nt in g  B R I 
grant   scheme s  b efo re  acce ssion  a lth oug h  t he y   would  al so  be 
eligib l e fo r fundin g 17.

t h e  e x p e c t e d  p r o j e c t  o u t p u t s  i n  t h e  t r a n s p o r t  s e c t o r  w e r e   b e i n g 
a c h i e v e d  b u t  w i t h  l e n g t h y  d e l a y s  i n  p r o j e c t  p r e p a r a t i o n  a n d 
p r o c u r e m e n t   

32.  

The ISPA 2005 railway rehabilitation projec t to upgrade 33 k m 
of   t rack  o n  t he  m ain  Trans -Europe an   Cor r i dor   X 18  railway   lin e 
w a s   t h e   f i r s t   t r a n s p o r t   i n f r a s t r u c t u r e   p r o j e c t   p r e p a r e d   a n d 
i m p l e m e n t e d   a c c o r d i n g   t o   E U   r u l e s   i n   C r o a t i a .   I t   t h e r e f o r e 
b r o u g h t   i m p o r t a n t   ‘ l e a r n i n g   b y   d o i n g ’   b e n e f i t s.   I t   s t a r t e d   2 
ye a r s   b e h i n d   t h e   o r i g i n a l   s c h e d u l e   b e c a u s e   t h e   p r o j e c t   w a s 
n o t   m a t u re   e n o u g h   w h e n   i m p l e m e n t a t i o n   w a s   s c h e d u l e d   t o 
b e g i n .   L a c k   o f   p r o c u r e m e n t   c a p a c i t y   t h e n   c a u s e d   d e l a y s   i n 
t h e   te n d e r i n g   p ro ce s s.  Th e   I PA   2 0 0 7   r a i l   p ro j e c t   fo r   wo r k s   a t 
 Z a g re b   m a i n   r a i l w ay   s t a t i o n   a l s o   s u f fe re d   d e l a y s   i n   t h e   p ro -
curement process, mainly due to incomplete tender documen-
tatio n,  alt ho ug h thes e del ays  were les s th an  un de r  t he  prev i-
ou s I SPA  pro jec t.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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19  According to the Structural 
Funds regulation, a ‘major’ 

project is defined by the 

Commission as being greater 

than 50 million euro. Projects 

below this threshold are 

classified as being ‘non-major’. 

Council Regulation (EC) 

No 1083/2006 of 11 July 2006 

laying down general provisions 

on the European Regional 

Development Fund, the 

European Social Fund and the 

Cohesion Fund and repealing 

Regulation (EC) No 1260/1999 

(OJ L 210, 31.7.2006, p. 25 ). 

Regulation as amended by 

Regulation (EU) No 539/2010 of 

the European Parliament and 

of the Council of 16 June 2010 

(OJ L 158, 24.6.2010, p. 1).

33.   At th e time of  t he Cou r t ’s o n- the - s pot  a udi t in O c to ber  20 1 0, 
t h e   I S PA   p r o j e c t   w a s   s t i l l   u n d e r   i m p l e m e n t a t i o n   d u e   t o   t h e 
d e l ays   i n c u r re d.  Th e   p ro j e c t s’  p l a n n e d   o u t p u t s   we re   l i k e l y   to 
b e   a c h i e ve d   by   t h e   e n d   o f   2 0 1 1 ,   a l t h o u g h   t h e i r   u l t i m a te   i m -
pac t depends on the implementation of other rail projec ts on 
Co r r id or X  in Croat ia and  neigh bour i ng  countr ie s.

a s s i s t a n c e  t o  p r e p a r e   a ‘ p r o j e c t  p i p e l i n e’  f o r  s t r u c t u r a l  a n d 
c o h e s i o n  f u n d s  a n d  i n c r e a s e  c a p a c i t y  h a s  b e e n  o n l y  p a r t i a l l y 
s u c c e s s f u l

34.   Although one of the main original objectives of the Phare 2006 
p ro j e c t   w a s   t o   e s t a b l i s h   a   s y s t e m   fo r   d e ve l o p i n g   a  ‘p i p e l i n e’ 
of mature projec ts for the Struc tural and Cohesion Funds, the 
Co m m i s s i o n   s u b s e q u e n t l y   d e c i d e d   to   fo c u s   o n   d e ve l o p i n g   a 
lim ited  numb e r  o f  majo r  in frast r uc t ure  proj ec t s 19.  As  a  result 
fe we r   C ro at i a n   a u t h o r i t i e s   re ce i ve d   c a p a c i t y- b u i l d i n g   a s s i s t-
a n c e   t h a n   h a d   p r e v i o u s l y   b e e n   p l a n n e d   a n d   t h e   n u m b e r   o f 
personnel to be trained fell from 1 000 to 90. While concentrat-
i n g   i n   t h i s   way   o n   t h e   p re p a rat i o n   o f   m a j o r   p ro j e c t s   i s   l i k e l y 
to l e ad to  a  hig her rate o f abs or pt ion  at t h e be gi nn i ng  of  t he 
Struc tural and Cohesion Funds, there is also a need for mature 
‘ n o n - m a j o r ’   p ro j e c t s   to   b e   p re p a re d   d u e   to   t h e i r   i m p o r t a n ce 
f o r   r e g i o n a l   d e v e l o p m e n t .   M o r e   g e n e r a l l y   t h e   C o m m i s s i o n 
d i d   n o t   s u f f i c i e n t l y   a d d re s s   t h e   n e e d   to   s t i m u l a te   a n d   a s s i s t 
r e g i o n a l   a n d   l o c a l   p r o m o t e r s   t o   p r e p a r e   p r o j e c t s   f o r   f u t u r e 
o p e r a t i o n a l   p r o g r a m m e s   b y   p r o v i d i n g   s u p p o r t   a t   t h i s   l e v e l . 
O n l y   n i n e   m a j o r   i n f r a s t r u c t u r e   p r o j e c t s   w e r e   p r e p a r e d   a n d 
f o r   s o m e   o f   t h e s e   t h e   t e c h n i c a l   d o c u m e n t a t i o n   w a s   i n c o m -
plete. Guidelines for applications for near ly 50 grant schemes 
were produced although there was insufficient time to pass on 
k nowledge relating to these schemes from central to regional 
level. EU-funded exper tise has made a significant contribution 
t o   p ro g r a m m i n g   t h e   n a t i o n a l   s t r a t e g i c   r e fe r e n c e   f r a m e wo r k 
a n d   o p e ra t i o n a l   p ro gra m m e s   fo r   a s s i s t a n ce   u n d e r   t h e   S t r u c -
t u ra l   a n d   Co h e s i o n   Fu n d s.   O n   t h e   o t h e r   h a n d,   l i t t l e   p ro gre s s 
w a s   m a d e   i n   d e v e l o p i n g   a   m a n a g e m e n t   i n fo r m a t i o n   s y s t e m 
for t hes e Funds.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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35.  

S i g n i f i c a n t   d e l a y s   i n   t h e   p r e p a r a t i o n   a n d   p r o c u r e m e n t   p r o -
c e d u r e s   f o r   w o r k   i n   t h i s   c o n t e x t   c a r r i e d   o u t   u n d e r   t h e   I PA 
2 0 0 8   p r o g r a m m e   a r e   l i k e l y   t o   l e a d   t o   a   l o s s   o f   m o m e n t u m . 
T h e   C r o a t i a n   a u t h o r i t i e s   a l s o   f a c e   s i g n i f i c a n t   c h a l l e n g e s   i n 
te r m s   o f   t h e   n u m b e r   a n d   t u r n ove r   o f   s t a f f   i n   t h e   a re a   o f   t h e 
Str uc t u ral an d Coh esio n Fun ds.

P R E PA R I N G 	 F O R 	 E U 	 AG R I C U LT U R A L 	 P O L I C Y:	 M I X E D	
R E S U LT S

36.  

T h e   e f f e c t i v e n e s s   o f   t h e   E U   p r e - a c c e s s i o n   a s s i s t a n c e   t o   t h e 
a g r i  c u l t u r a l   s e c t o r   w a s   a s s e s s e d   b y   e x a m i n i n g   t w o   i n s t i t u -
tional capacity-building projects funded under Phare 2005 and 
IPA 2007 Component I and the Sapard and IPARD programmes, 
in cl ud in g  fou r  investment  p roj ec t s  co -f in an ce d  in   t h e  f rame -
wo r k o f S ap ard (s ee  Fig u r e  3) . 

F I G U R E 	 3

P R E PA R AT I O N 	 F O R 	 E U 	 AG R I C U LT U R A L 	 F U N D S 	 I N 	 C R O AT I A

Source: European Court of Auditors.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

20  Commission Decision 
2006/658/EC of 29 September 

2006 conferring management 

of aid on implementing 

agencies for pre-accession 

measures in agriculture and rural 

development in Croatia in the 

pre-accession period (OJ L 271, 

30.9.2006, p. 83).

21  See paragraph 7, footnote 7 
on accreditation.

25

s o m e  p r o g r e s s   h a s  b e e n  m a d e  i n  r e s p e c t  o f  t h e  c o n f e r r a l  o f 
m a n a g e m e n t  p o w e r s   f o r  r u r a l  d e v e l o p m e n t  m e a s u r e s

37.   R e s u l t s   i n   t e r m s   o f   b u i l d i n g   u p   t h e   c a p a c i t y   o f   t h e   C r o a t i a n 
paying agenc y to make proper use of pre -accession and post-
a cce s s i o n   f u n d i n g   h ave   b e e n   m i xe d.   C ro a t i a   h a d   to   b u i l d   u p 
suf fic ient   manag ement  cap ac it y  for   th e   Comm is si on   to  gra nt 
i t   t h e   n e ce s s a r y   co n fe r ra l   o f   m a n a g e m e nt   p owe r s   fo r   d e ce n-
t r a l i s e d   m a n a g e m e n t   w i t h o u t   e x   a n t e   c h e c k s   b e fo re   i t   co u l d 
star t to implement pre -accession rural development measures. 
I n  t he  e vent  of   S ap ard,  con fer ral  of  man ag e me nt   powe r s   was 
granted  fo r o nly  t wo rural  developm ent me as ures  i n  S e ptem-
be r 2006 20 ins tead o f t he  fo ur initially  plan n ed.

38.   Pro gre s s   w a s   m o d e s t   i n   re l at i o n   to   b u i l d i n g   c a p a c i t y   fo r   o b -
t a i n i n g   I PA R D   f u n d i n g,   i n   p a r t i c u l a r   b e c a u s e   t h e   P h a re   2 0 0 5 
pro jec t ’s  ob jec t ives  in  ter ms  of  a cc re dit at ion   by  t he   Croat ian 
a u t h o r i t i e s 2 1  a n d   c o n fe r r a l   o f   m a n a g e m e n t   p o we r s   we re   n o t 
ver y ambitious. On the one hand, the programme sought only 
t h e   a c c r e d i t a t i o n   f o r   I PA R D   o f   t h e   t w o   m e a s u r e s   w h i c h   h a d 
a l r e a d y   b e e n   a c c r e d i t e d   u n d e r   S a p a r d .   O n   t h e   o t h e r   h a n d , 
for  t he  new   IPA RD   meas ures,   the   obje c ti ve  was   not   to  obtai n 
accreditation but only to prepare documentation for possible 
future accreditation. Although the assistance under IPARD was 
a v a i l a b l e   f r o m   t h e   2 0 0 7   E U   b u d g e t ,   t h e   P h a r e   2 0 0 5   p r o j e c t 
contained no precise targets for the conferral of management 
powers by the Commission with a view to giving Croatia access 
to  IPA R D fu nding as  s oon  as pos si ble.

p r e - a c c e s s i o n  a s s i s t a n c e  t o  r u r a l  d e v e l o p m e n t  d i d  n o t  f u l l y 
r e p l i c a t e  t h e  p o s t- a c c e s s i o n  w o r k i n g   c o n d i t i o n s

39.  

S a p a r d   w a s   t h e   f i r s t   ‘ l e a r n i n g   b y   d o i n g ’   p r o g r a m m e   f o r   t h e 
E A F R D,   a l l   t h e   i m p l e m e nte d   p ro j e c t s   b e i n g   p a r t   o f   a   p ro ce s s 
t o   h e l p   t h e   C r o a t i a n   a u t h o r i t i e s   s e t   u p   t h e   a d m i n i s t r a t i v e 
f r a m e w o r k   f o r   t h e   i m p l e m e n t a t i o n   o f   c o - f i n a n c e d   p r o j e c t s 
p o s t   a c c e s s i o n .  T h e s e   i n c l u d e d   m a n a g e m e n t   o f   t h e   a p p l i c a -
t i o n s   ( c o m p l e t e n e s s   c h e c k s ,   a n a l y s i s   o f   t h e   b u s i n e s s   p l a n ) , 
on-t he -sp ot  ch ecks p r io r to  t he proj ec t  approval,  de ci si on  on 
granting Sapard funds, contrac ting, verification of the eligibil -
it y of  exp endit ure, p ayment,  an d  repor ti ng  to th e  M oni tor i ng 
Co mm it tee  and to t he Com missi on.

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22  The Croatian authorities have 
decided that the paying agency 

regional offices will check the 

admissibility of the applications 

and perform the administrative 

and on-the-spot controls.

23  In the milk sector two projects 
were completed compared 

with the 16 projects (12,5 %) 

expected, in the greenhouses 

sector two projects were 

completed compared with the 

14 projects (14,3 %) expected 

and in the fruit and vegetable 

sector seven projects were 

completed compared with 

42 projects expected (16,7 %).

40.  

For the measures where the Croatian authorities have received 
t h e   c o n fe r r a l   o f   m a n a g e m e n t   p o w e r s ,   a l l o w i n g   t h e m   t o   u s e 
d e c e n t r a l i s e d   m a n a g e m e n t   w i t h o u t   e x   a n t e   c o n t r o l s ,   p r e - 
accession programmes can in principle be implemented under 
s i m i l a r   c o n d i t i o n s   t o   t h o s e   w h i c h   w i l l   a p p l y   p o s t   a c c e s s i o n . 
H owe ve r,   i n   p r a c t i c e,   t h e   i m p l e m e n t a t i o n   o f   t h e   S a p a rd   a n d 
IPARD programmes has not fully replicated the post accession 
env iro nme nt  fo r man aging E U fund in g.

(a )  The   S ap ard  p ro gramme  has   been  enti rel y  man ag e d  at   th e 
cent ral   l evel   o f  t he  Paying   Agen c y   an d,  at   t he   ti me   of  t h e 
audit, IPARD was also being managed centrally. As a result 
t h e   Pa y i n g   Ag e n c y   re g i o n a l   o f f i c e s   h a ve   n o t   y e t   h a d   t h e 
o p p o r t u n i t y   t o   g a i n   p r a c t i c a l   e x p e r i e n c e   i n   t h e   m a n a g e -
me nt  of  EU pre -accessio n rural developm ent pro gram me s 
al th ou g h  t he y  w il l  have  to  play  a  k e y   role   i n   th is   pos t  a c -
ces sio n 22.

(b)  For Sapard and IPARD projects, the paying agenc y has been 

o p erat in g entirel y  manu al  proce dures.

(c)  Und er  S ap ard,   no   rank ing  system   for   proj ec t   applic ati ons 
was developed and applied by the agenc y. I nstead projec t 
a p p l i c at i o n s   we re   d e a l t   w i t h   o n   a   f i r s t- co m e,   f i r s t- s e r ve d 
b asis.

l o w  a b s o r p t i o n  o f  s a p a r d  a n d  i p a r d  f u n d i n g  r a i s e s  c o n c e r n s  f o r 
t h e  f u t u r e  a b s o r p t i o n  o f  e a f r d  f u n d s 

41.   A b s o r p t i o n   o f   S a p a r d   f u n d i n g   b y   C r o a t i a   h a s   b e e n   l o w,   d e -
c l a re d   e x p e n d i t u re   a t   t h e   e n d   o f   t h e   p ro g r a m m e   a m o u n t i n g 
to   o n l y   4 8  %   o f   t h e   f u n d s   a l l o c ate d.   Acco rd i n g   to   t h e   o u t p u t 
i n d i c a t o r s   o f   t h e   S a p a r d   p r o g r a m m e ,   1 6 1   e l i g i b l e   p r o j e c t s 
we re exp ec te d to be fu nded wit h in  t he  f rame wor k of  t he  t wo 
measures, whereas in realit y contrac ts were signed for only 49 
p ro j e c t s   a n d   j u s t   3 7   we re   co m p l e te d   ( s e e   Ta b l e   4 ) .   I n   f i ve   o f 
t h e   2 1   co u nt i e s   t h e re   wa s   n o t   a   s i n g l e   s u cce s s f u l   S a p a rd   a p -
plication. Some sec tors were par ticularly under-represented in 
the   im p le ment atio n  o f  M easure  1   ( I nve st me nt   in   agr i cul tural 
h o l d i n g s ) ,   n o t a b l y   t h e   m i l k   s e c t o r,   g r e e n h o u s e s   s e c t o r   a n d 
fruits and vegetable sec tor. This points to ser ious weak nesses 
i n   t h e   c a p a c i t y   a n d   p re p a re d n e s s   o f   t h e s e   s e c t o r s   t o   a b s o r b 
EU  fu nd s 23.

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42.  

T h e   a m o u n t s   c o n t r a c t e d   u n d e r   I PA R D   c o n f i r m   t h e   c o n t i n u -
ing difficulties in absorbing EU funding for rural development 
p ro gra m m e s.   Fi n a n c i a l   co m m i t m e n t s   we re   m a d e   i n   t h e   2 0 0 8 
budget for both IPARD 2007 (25,5 million euro) and IPARD 2008 
( 2 5 , 6   m i l l i o n   e u ro )   w h i c h ,   i n   a cco rd a n ce   w i t h   t h e   E U   b u d g e t 
p ro c e d u re s   ( s e e   p a r a g r a p h   2 0 ) ,   C r o a t i a   h a d   t o   s p e n d   b y   t h e 
end of 2011. However, in May 2011 investments had only been 
app roved  fo r  ap p roximatel y  1 6, 9   m ill ion   e uro  ( E U  par t   of   t he 
funding) af ter four calls for applications (33 % of the 2007 and 
2 0 0 8   I PA R D   b u d g e t ) 2 4.   G i ve n   t h e   t i m e   n e e d e d   t o   l a u n c h   a n d 
process additional calls and to implement approved projec ts, 
t h e re   i s   a   c l e a r   r i s k   t h a t   a   l a r g e   p a r t   o f   t h e   2 0 0 7 – 0 8   b u d g e t 
wil l  have to  b e decommit ted.

24  Report on the 
implementation of the IPARD 

programme by the Croatian 

Paying Agency for Agriculture, 

Fisheries and Rural Development 

Sector for Structural Support, 

24.5.2011.

43.   As a result of the low level of absorption, Croatian farmers and 
agro -processors have not yet become as familiar with EU fund-
in g  pro ced ures   t hro ugh  ‘l ear n in g  by  doing ’  in  th e  framewor k 
o f   t h e   S a p a rd   a n d   I PA R D   p ro gra m m e s   a s   h a d   b e e n   i nte n d e d. 
This will make it in turn more difficult to absor b the expec ted 
l a r g e   i n c r e a s e s   i n   E U   f u n d i n g   w h e n   t h e   r u r a l   d e v e l o p m e n t 
meas ure s in Croatia are fu l l y ph as ed  in  a f te r  acces s ion .

TA B L E 	 4

S A PA R D 	 P R O J E C T S 	 I N 	 C R O AT I A

Measure

Expected 
projects

Applications

Contracted 
projects

Completed 
projects

Number of

1. Investments in agricultural 
holdings

2. Improving the processing and 
marketing of agricultural and 
fishery products

Total

110

51

161

84

53

137

26

23

49

19

18

37

Completed/ 
expected

17 %

35 %

23 %

Source: Annual and final report on the implementation of the Sapard programme in the Republic of Croatia 
(2006–09), May 2010.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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44.  

T h e   C o m m i s s i o n   o n l y   f i n a l l y   e s t a b l i s h e d   i n   2 0 0 9   t h a t   a   k e y 
re a s o n   fo r   t h e   l ow   a b s o r p t i o n   o f   t h e   S a p a rd   p ro gra m m e   wa s 
a nat io nal sc heme w hich offered more f avourable  con dit ions, 
t o g e t h e r   w i t h   f e w e r   p r o c e d u r e s   a n d   c o n t r o l s ,   f o r   t h e   s a m e 
m e a s u r e s   a s   f u n d e d   b y   S a p a r d .   Fo l l o w i n g   t h e   C o m m i s s i o n’s 
i n t e r ve n t i o n ,   C r o a t i a   d e c i d e d   t o   a b o l i s h   t h i s   c o m p e t i n g   n a-
tio nal  s chem e in Novemb er 2 00 9 ,  af te r  th e  en d of th e S apard 
contrac t in g p er io d. H owever, t he  s low s tar t of  t he  IPAR D pro -
gramme indicates that the reasons for low demand from farm-
e r s   fo r   t h e   r u ra l   d e ve l o p m e nt   s c h e m e   i n   Cro at i a   h ave   s t i l l   to 
be  fu ll y  address ed.

P R E - ACC E S S I O N 	 A S S I S TA N C E 	 H A S 	 CO N T R I B U T E D 	TO	
S T R E N G T H E N I N G 	 C R O AT I A’S 	 A D M I N I S T R AT I V E 	 C A PAC I T Y	
I N 	T H E 	 F I G H T 	 AG A I N S T 	 CO R R U P T I O N 	 A N D 	 O R G A N I S E D	
C R I M E 	 B U T 	 S I G N I F I C A N T 	 C H A L L E N G E S 	 R E M A I N

45.  

The fight against corruption and organised crime is a ver y sen-
sit ive  issu e and is  a key  p ar t  of buil di ng  up Croati an  c apac i t y 
to ensure EU post-accession funding, as well as national fund -
i n g,   i s   we l l   u s e d.   E U   p re - a cce s s i o n   a s s i s t a n ce   h a s   b e e n   u s e d 
to fund two institutional capacity-building projec ts funded by 
the  C A R DS 2002 an d I PA  200 7 progra mme s  (s ee  Fi gu re  4) .

F I G U R E 	 4

S T R E N G T H E N I N G 	 C A PAC I T I E S 	TO 	 F I G H T 	 AG A I N S T 	 CO R R U P T I O N 	 A N D	
O R G A N I S E D 	 C R I M E

Source: European Court of Auditors.

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46.  

47.  

The CARDS project was launched to improve the functioning of 
t h e   O f f i ce   fo r   Pre ve nt i o n   o f   Co r r u p t i o n   a n d   O rg a n i s e d   Cr i m e 
( U S KO K ) ,   w h i c h   h a d   b e e n   s e t   u p   i n   2 0 0 1 .   D e s p i te   s i gn i f i c a n t 
del ays in it s  p rep arator y p h as e wh ich  m ea nt  th e  proje c t  on ly 
sta r ted  in  2005,   th e  p ro jec t  ac ti vi ti es   were  compl ete d  by   th e 
e n d   o f   2 0 0 6 .   Fo r   o n e   i n d i c ato r   o f   t h e   p ro j e c t ’s   e f fe c t i ve n e s s, 
an increasing number of cases of ser ious organised cr ime and 
cor ru pt io n discovered and p rose cuted, t h e f i r st  re sults  of  th e 
investigation activities suppor ted by the project star ted to be-
come visible in 2009 in terms of repor ted high-level corruption 
cases. For the other indicator, a better rank ing in the Transpar-
enc y  I nter nat io nal   Cor ru p tion   Perce pti on  I n d ex ,  Croati a  ros e 
f ro m   7 0 t h   p l a ce   i n   2 0 0 5   to   6 2 n d   by   2 0 1 0   a n d   i t s   s co re   i n   t h e 
i n d e x   i m p ro ve d   f ro m   3 , 4   i n   2 0 0 5   t o   4 , 1   fo r   m o s t   y e a r s   s i n c e 
the  end o f t he p ro jec t.

Th e   a c t i v i t i e s   o f   t h e   I PA   2 0 0 7   p ro j e c t ,   w h i c h   i s   s c h e d u l e d   t o 
b e   c o m p l e t e d   i n   2 0 1 2 ,   h a v e   b e e n   w e l l   d e s i g n e d   t o   b u i l d   o n 
t h e   p re v i o u s   p ro j e c t.   I n   t h e   m e a nt i m e   t h e   ove ra l l   n u m b e r   o f 
cases being handled by USKOK has continued to increase and 
t h e   i n d i c t m e n t s   a n d   c o nv i c t i o n s   o f   h i g h - r a n k i n g   p o l i t i c i a n s 
in dicate t hat  USKO K is on  th e r ig ht trac k to t ack le  cor r upti on 
at   t h e   h i g h e s t   l e ve l.   N e ve r t h e l e s s,   a s   t h e   Co m m i s s i o n’s   2 0 1 0 
progress repor t on Croatia emphasises, the recently upgraded 
legal and administrative struc tures remain to be fully tested in 
prac tice while USKOK’s capacity for dealing with sophisticated 
financ ial  c r imes is  a p ar t icu l ar c h alle n ge.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

CONCLUSIONS AND  
RECOMMENDATIONS

30

CO N C LU S I O N S

48.   O verall EU pre -accession assistance to Croatia is mak ing a sig-
n i f i c a n t   c o n t r i b u t i o n   t o   C ro a t i a’s   p ro g re s s   i n   b u i l d i n g   u p   i t s 
a d m i n i s t r a t i v e   c a p a c i t y   fo r   m a n a g i n g   i n c r e a s e d   E U   f u n d i n g 
post accession. Never theless, the assistance has only been par-
tial l y  su ccess ful   so   far  in  ac h iev in g   it s  obj ec t ive s  an d  f ur t he r 
progress in capacity building has to be suppor ted in a number 
of  key  areas  bo t h b efore an d af te r  acce s si on.  I n  mos t areas  of 
pre -accession assistance the Commission has not yet assessed 
C ro a t i a’s   c a p a c i t y   t o   b e   s u f f i c i e n t   fo r   i t   t o   a u t h o r i s e   C ro a t i a 
to implement the assistance without the Commission’s ex ante 
chec ks.  D es pite  recent   p rogress  m ade,   proc ure me nt   c apac it y 
an d  anti- cor ru pt ion   are  t wo   are as  w he re   th e re  i s  a   par ti c ular 
ne ed  to  reinfo rce s up p or t  to the  Croati an  auth or it ie s.

49.  

I n   g e n e r a l,   a s s i s t a n c e   t o   a d d re s s   C ro a t i a’s   c a p a c i t y - b u i l d i n g 
ne ed s  has  bee n  so u ndl y   p l ann ed  by   th e   Comm is si on  an d  th e 
Croatian   aut ho r it ies.   Lesso ns   were  le ar ne d  f rom   prev ious   e n -
l a rg e m e nt s   a n d   n e w   a p p ro a c h e s   a d o p te d   to   p l a n n i n g   a s s i s t -
a n ce   a n d   l i n k i n g   i t   to   t h e   n e g o t i at i o n   p ro ce s s.   Pro gra m m i n g 
s y s t e m s   h a v e   b e e n   w e l l   d e s i g n e d   a n d   p r i o r i t i s e d   c a p a c i t y 
building, although procurement capacity still requires par ticu-
lar attention. Audited projec ts were found to be ver y relevant 
to capacit y-building pr ior ities but had focused on the central 
a u t h o r i t i e s   w i t h   o n l y   l i m i t e d   s u p p o r t   t o   r e g i o n a l   b o d i e s   s o 
far, despite the latter also having an impor tant role to play in 
im p le me nt ing  po st-acces s ion  suppor t.

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50.  

I n ter ms of results, EU assistance has made an impor tant con-
tribution to building up Croatia’s capacit y for managing post-
accession funding, including through lear ning by doing. Nev-
e r t h e l e s s   t h e   i n t e n d e d   re s u l t s   o f   s o m e   p ro j e c t s   h ave   s t i l l   t o 
be  se cu red and th e audit  identifi e d a n um ber  of  k ey  is sue s i n 
t h i s   re s p e c t.   I m p l e m e nt at i o n   o f   p ro j e c t   a s s i s t a n ce   i n   Cro at i a 
h a s   f re q u e n t l y   f a l l e n   b e h i n d   t h e   o r i gi n a l   t i m e t a b l e,   p a r t i c u -
l a r l y   d u e   to   d e l ays   c a u s e d   by   p ro j e c t s   n o t   b e i n g   s u f f i c i e n t l y 
mature and a lack of procurement capacit y. S cope remains for 
i m p rov i n g   t h e   m o n i to r i n g   a n d   e va l u at i o n   o f   S t r u c t u ra l   Fu n d 
pro jec ts.  Al t ho u gh  th ere  h as  been   a  st ron g   e mph as is   on   pre -
paring large infrastruc ture projec ts at central level, non-major 
projec ts have received only limited attention and a system for 
d e v e l o p i n g   p r o j e c t   p r o p o s a l s   f r o m   r e g i o n a l   a n d   l o c a l   l e v e l 
h a s   s t i l l   t o   b e   f u l l y   e s t a b l i s h e d.   I m p l e m e n t a t i o n   i n   t h e   r u r a l 
d e v e l o p m e n t   s e c t o r   h a s   s u f fe r e d   f r o m   l o w   a b s o r p t i o n   r a t e s 
a n d   l e a r n i n g   b y   d o i n g   a t   t h e   re g i o n a l   a n d   g r a n t   b e n e f i c i a r y 
l e v e l s   h a s   b e e n   l i m i t e d .   A l t h o u g h   s o m e   p r o g r e s s   h a s   b e e n 
m a d e   t h ro u g h   E U   p ro j e c t s   to   f i g ht   co r r u p t i o n   a n d   o rg a n i s e d 
cr im e,  s ignificant  chall en ges rema in  i n  th is  are a.

51.   D e s p i te   t h e re   s t i l l   b e i n g   s co p e   fo r   f u r t h e r   i m p rove m e nt ,   t h e 
Co m m i s s i o n   h a s   c l e a r l y   l e a r n e d   i m p o r t a n t   l e s s o n s   f ro m   p re -
viou s  en larg ements  w hic h  h as  m ade   it s  as si st an ce   to  Croat ia 
mo re  ef fe c tive. 

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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R E CO M M E N D AT I O N S

52.  

T h e   C o m m i s s i o n   a n d   t h e   C r o a t i a n   a u t h o r i t i e s   s h o u l d   w o r k 
clos el y tog e the r to address  the  followi n g  re comme n dat ion s:

R E C O M M E N D AT I O N S 	 R E G A R D I N G	 	
E U 	 A S S I S TA N C E 	 T O 	 C R O AT I A

1.  I n c re as e  th e   p r i o r i t y  g i ve n   to  b uil di n g   u p  p ro cu re m e nt 
c ap a ci t y by imp l e m e ntin g p lans f o r  o n -  an d  o f f- th e - j o b 
t r ainin g f o cus e d in p ar ti cular  o n:

(a) the development of tender documentation fully comply-

ing wi th EU standards;

(b) t h e   m a n a g e m e n t   o f   t h e   t e n d e r i n g   a n d   c o n t r a c t i n g   o f 

complex public  wor ks  p rojec ts.

2 .   Ta k e   g r e a t e r   s t e p s   t o   m e e t   c a p a c i t y - b u i l d i n g   n e e d s   a t 

re g i o na l an d l o c al l eve l ,  n ot ab l y  by :

(a) e n s u r i n g   t h a t   a l l   re l e v a n t   b o d i e s   a t   t h i s   l e ve l   h a ve   t h e 
oppor tunit y to lear n by  do ing b efo re t he   acces si o n;

(b) improving the mechanisms for stimulating and assisting 

in the  development of  p ro jec t  ide as.

3 .  D eve lop f ur th er the assessm ent of proje c t e f fe c tiven ess 

by :

(a) reinforcing the use of S MA R T o b je c t i ves ;

(b) helping to raise the qualit y of monitoring repor ts by the 

Croatian author ities;

(c) ensuring interim and ex post evaluations are carried out.

4 .  Build up a por t folio of mature projec ts to be able to fully 
a b s o r b   t h e   i n c re as e d   p os t- a cce ssi o n   f u n d i n g   av ail a b l e, 
in p ar ti cul ar by e nsu r in g that :

(a) for major projec ts, which  have b e en t h e  fo c u s o f  ef fo r t s 
s o   f a r,   t h e   n e c e s s a r y   t e c h n i c a l   d o c u m e n t a t i o n   i s   c o m -
pleted;

(b) more attention is given to establishing a complementar y 
p o r t fo l i o   o f   n o n - m a j o r   p r o j e c t s   fo r   t h e   p o s t - a c c e s s i o n 
per iod.

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5.   Take ac tion in relation to rural development programmes 

to:

(a) ensure  that  the  national  auth or i ti e s  b ui ld  up   t hei r  c ap -
acit y in order to obtain con fer ral  o f  ma nag e me nt  fo r  a ll 
the  measures planned;

(b) i d e n t i f y   w a y s   t o   g e n e r a t e   m o r e   p r o j e c t s   i n   t h e   m i l k , 

greenhouses an d frui ts and veg et ab le s s ec to r s.

6 .  Stre n g th e n anti - co r r up ti o n  m e asure s  thro u gh:

(a) p r o v i d i n g   o n g o i n g   s u p p o r t   t o   t h e   u p g r a d e d   l e g a l   a n d 
a d m i n i s t r a t i v e   s t r u c t u r e s   t h r o u g h   t w i n n i n g   a n d   o t h e r 
a d v i s o r y   i n p u t s,   i n c l u d i n g   a   p a r t i c u l a r   fo c u s   o n   a s s i s t -
ance  in tack li ng sophist ic ated fi na nc i al c r i me s;

(b) continuing rigorous monitoring of corruption levels and 
i s s u e s,   d u r i n g   t h e   p re - a cce s s i o n   p e r i o d   a n d   i n   re l a t i o n 
to EU post-acce ssion f undi ng.

53.   Wi t h   r e fe r e n c e   t o   i t s   p r e - a c c e s s i o n   a s s i s t a n c e   t o   o t h e r   c a n-
d i d a t e   c o u n t r i e s   a n d   p o t e n t i a l   c a n d i d a t e s   t h e   C o m m i s s i o n 
sho ul d : 

R E C O M M E N D AT I O N S 	 R E G A R D I N G 	 E U 	 P R E - A C C E S S I O N	
A S S I S TA N C E 	 T O 	 O T H E R 	 C O U N T R I E S

7.  Take   into  a cco unt   th e  l e ss o ns  l e ar nt   f ro m   i t s  p re - a cce s -
sion assis t ance to Cro atia in it s pre -accession assis t ance 
to  oth e r  co unt r i e s w h e reve r ap p li c a b l e, an d , in  p ar ti cu -
l ar :

(a) ensure a sufficient track record in decentralised manage -
m e n t   o f   p r e - a c c e s s i o n   f u n d s   w i t h o u t   e x   a n t e   c o n t r o l s 
before  the  date of  accessio n.

(b) pay greater attention to ensuring that projec t proposals 
fo r   p re - a cce s s i o n   a s s i s t a n ce   a re   s u f f i c i e nt l y   m at u re   fo r 
imple mentation wi thin t he set t i me - f ram e.

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Th i s   R e p o r t   wa s   a d o p te d   by   C h a m b e r   I I I ,   h e a d e d   by   M r   K a re l 
PINX TEN,  M e mber  o f th e Co ur t of  Auditor s, i n Luxe mbourg at 
its  meet ing o f 25 O c to b er 2 01 1.

Fo r  th e  Co u r t  o f  Audi to rs

Víto r  M anue l  da  S I LVA   C A L D E I R A
Presi de nt

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A N N E X 	 I

T H E 	35	 C H A P T E R S 	 O F 	T H E 	 ACQ U I S 	 ( 3 0	 J U N E 	 2 01 1 )

Nº

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

Chapters

Negotiations opened

Negotiations 
provisionally closed

Free movement of goods

Freedom of movement for workers

Right of establishment and freedom to provide services

Free movement of capital

Public procurement

Company law

Intellectual property law

Competition policy

Financial services

Information society and media

Agriculture and rural development

Food safety, veterinary and phytosanitary policy

Fisheries

Transport policy

Energy

Taxation

Economic and monetary policy

Statistics

Social policy and employment

Enterprise and industrial policy

Trans-European networks

Regional policy and coordination of structural instruments

Judiciary and fundamental rights

Justice, freedom and security

Science and research

Education and culture

Environment

Consumer and health protection

Customs union

External relations

Foreign, security and defence policy

Financial control

Financial and budgetary provisions

Institutions

Other issues

25.7.2008

17.6.2008

26.6.2007

2.10.2009

19.12.2008

26.6.2007

29.3.2007

30.6.2010

26.6.2007

26.6.2007

2.10.2009

2.10.2009

19.2.2010

21.4.2008

21.4.2008

2.10.2009

21.12.2006

26.6.2007

17.6.2008

21.12.2006

19.12.2007

2.10.2009

30.06.2010

2.10.2009

12.6.2006

11.12.2006

19.2.2010

12.10.2007

21.12.2006

12.10.2007

30.6.2010

26.6.2007

19.12.2007

5.11.2010

N/A

19.4.2010

2.10.2009

21.12.2009

5.11.2010

30.6.2010

2.10.2009

19.12.2008

30.6.2011

27.11.2009

19.12.2008

19.4.2011

27.7.2010

6.6.2011

5.11.2010

27.11.2009

30.6.2010

19.12.2008

2.10.2009

21.12.2009

25.7.2008

2.10.2009

19.4.2011

30.6.2011

22.12.2010

12.6.2006

11.12.2006

22.12.2010

27.11.2009

2.10.2009

30.10.2008

22.12.2010

27.7.2010

30.6.2011

5.11.2010

30.6.2011

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A N N E X 	 I I

CO M M I S S I O N ’S 	 G R A N T I N G 	 O F 	 CO N F E R R A L 	 O F 	 M A N AG E M E N T	 	
TO 	 C R O AT I A N 	 AU T H O R I T I E S 	 R E S P O N S I B L E 	 F O R 	 E U 	 F U N D S	 	
( 15	 J U N E 	2011 )

Programme

Conferral of  decentralised  management

with ex ante controls

without ex ante controls

Phare

ISPA

IPA I

IPA II

IPA III

– Transport

– Environment

– Regional competitiveness

IPA IV

Sapard

– Measure 1 Investments in agricultural holdings

– Measure 2 Improving the processing and marketing 
of agricultural and fishery products

IPA V (IPARD)

– Measure 101 Investments in agricultural holdings

– Measure 103 Investments in the processing and 
marketing of agricultural and fishery products

– Measure 201 Preparatory actions for implementation 
of the agri-environmental measures

– Measure 202 Preparation and implementation of 
local rural development strategies

– Measure 301 Improvement and development of rural 
infrastructure

– Measure 302 Diversification and development of rural 
economic activities

– Measure 501 Technical assistance

7.2.2006

13.2.2006

28.10.2008

14.11.2008

3.11.2008

29.10.2008

29.10.2008

1.12.2008

N/A1

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Not introduced

Not introduced

Not yet introduced

Not yet introduced

Not yet introduced

Not yet introduced

Not yet introduced

Not yet introduced

29.9.2006

29.9.2006

30.11.2009

30.11.2009

Not yet introduced

Not yet introduced

17.3.2011

17.3.2011

Not yet introduced

1 N/A — Not applicable. Sapard and IPARD can only be implemented under decentralised management without ex ante 
controls.

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A N N E X 	 I I I

L I S T 	 O F 	 P R O J E C T S 	 AU D I T E D

Pre-IPA projects

Sapard Measure 2 - GLAZIR

Sapard Measure 2 - CONEX trade

Sapard Measure 1 - AGROMEÐIMURJE

Sapard Measure 1 MURKOVIĆ

Phare 2005 Business-related infrastructure grant 
scheme

ISPA 2005 Vinkovci to Tovarnik to state border 
railway rehabilitation

CARDS 2004 Local partnership for employment 
phase II

CARDS 2002 Capacity building for USKOK

Phare 2005 Institutional capacity building and sup-
port for implementation of Sapard/IPARD

Phare 2006 Development of institutional capacity 
and project pipeline for Structural Funds

1

2

3

4

5

6

7

8

9 

10

Contracted amounts in millions of euro

EU contribution

National 
contribution

EU + national 
contribution

1,019

1,033

0,251

0,256

5,280

0,339

0,344

0,083

0,086

4,264

1,358

1,377

0,334

0,342

9,544

28,789

31,394

60,183

1,488

0,650

3,822

6,200

-

-

-

-

1,488

0,650

3,822

6,200

Total Pre-IPA projects

48,788

36,510

85,298

IPA projects

Budgeted amounts in millions of euro

EU contribution

National 
contribution

EU + national 
contribution

11

12

13.a

13.b

14

15

16

IPA Component IIIc Regional competitiveness 
operational programme 2007–09

IPA 2007 Component III Zagreb main station 
signalling & interlocking system

IPA 2007–09 Component IV Local partnership for 
employment phase III

IPA 2007–09 Component IV Local partnership for 
employment phase III

IPA 2007 Component I Strengthening capacities of 
USKOK

IPA 2007 Component I Establishment of effective 
and financially sound management system and 
control of use of agricultural funds

IPA 2008 Component I Support to management, 
monitoring and evaluation of Structural 
Instruments

Total IPA projects

19,823

14,025

2,210

1,615

1,000

5,114

4,000

47,787

6,608

4,675

0,390

0,285

-

0,375

0,288

12,621

26,431

18,700

2,600

1,900

1,000

5,489

4,288

60,408

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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REPLY OF THE  
COMMISSION

EXECUTIVE	SUMMARY

I II .
Th e   Co m m i s s i o n   we l co m e s   t h e   a s s e s s m e nt 
of the Cour t. I n the accession negotiations, 
C r o a t i a   h a s   g i v e n   c l e a r   c o m m i t m e n t s   t o 
b u i l d   u p   p r o c u r e m e n t   c a p a c i t y   a n d   t h e 
c a p a c i t y   o f   r e g i o n a l   a n d   l o c a l   a u t h o r i -
t i e s .   T h e   C o m m i s s i o n   i s   c l o s e l y   m o n i t o r -
i n g   Cro at i a’s   co m p l i a n ce   w i t h   t h e   co m m i t-
m e n t s   g i v e n   a n d   i t s   f u r t h e r   p r e p a r a t i o n s 
all th e way  to a ccess ion.

I V.	
Th e   Co m m i s s i o n   co n s i d e r s   t h at   p re - a cce s-
s i o n   a s s i s t a n c e   h a s   s u c c e s s f u l l y   c o n t r i b -
u t e d   t o   b u i l d i n g   u p   C r o a t i a’s   a d m i n i s t r a -
tive capacit y.

D e l a y s   i n   i m p l e m e n t a t i o n   w e r e   l a r g e l y 
linked to the complex accreditation proce -
dure an d are gradually  be ing overcome.

Th e   i n i t i a l   fo c u s   o n   m a j o r   p ro j e c t s   re f l e c t s 
t h e   e x p e r i e n c e   f r o m   n e w   M e m b e r   S t a t e s 
w h e r e   w e a k n e s s e s   i n   p r e p a r a t i o n   a n d 
i m p l e m e n t a t i o n   o f   m a j o r   p r o j e c t s   c a u s e d 
m o s t   o f   t h e   d e l ays   i n   i m p l e m e nt i n g   co h e -
sion  polic y.

Co m p a re d   to   S a p a rd,   t h e   f i r s t   r u ra l   d e ve l -
o p m e n t   p r o g r a m m e   i m p l e m e n t e d   i n 
C r o a t i a ,   t h e   c u r r e n t   I PA R D   h a s   a t t r a c t e d 
more interest  from  potent ial be ne f ic i ar i es, 
w h i c h   i n c r e a s e s   t h e   p r o s p e c t   o f   a   m o r e 
s u c c e s s f u l   i m p l e m e n t a t i o n .   U n d e r   t h i s 
c o m p o n e n t ,   t h e   C o m m i s s i o n   h a s   a l r e a d y 
c o n f e r r e d   m a n a g e m e n t   p o w e r s   w i t h o u t 
e x   a n t e   c o n t r o l s   f o r   s e v e r a l   m e a s u r e s .   A s 
m e n t i o n e d   u n d e r   p o i n t   7   o f   t h i s   r e p o r t , 
t h i s   i s   t h e   m a n a g e m e n t   m o d e   w h i c h   m o s t 
closely cor responds to the way in which EU 
fun ding  is m anaged af ter  access i on .

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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REPLY OF THE  
COMMISSION

1 6.
Sys te m at i c   fe e d b a c k   f ro m   t h e   Co m m i s s i o n 
o n   e r ro r s   m a d e   a n d   i m p rove m e nt s   n e e d e d 
has helped Croatia to build up and improve 
i t s   p r o c u r e m e n t   c a p a c i t y.   B e f o r e   i t   c a n 
withdraw ex ante  controls, the Commission 
m u s t   v e r i f y   t h a t   t h e   b e n e f i c i a r y   c o u n t r y 
s a t i s f i e s   t h e   m i n i m u m   r e q u i r e m e n t s   s e t 
i n   A r t i c l e   1 8 ( 2 )   o f   t h e   I PA   i m p l e m e n t i n g 
re g u l at i o n ,   i . e.   h a s   e f fe c t i ve l y   f u n c t i o n i n g 
m a n a g e m e nt   a n d   co nt ro l   s ys te m s.   R e g u l a r 
m e e t i n g s   a re   h e l d   w i t h   C ro a t i a   t o   d i s c u s s 
re m e d i a l   a c t i o n   o n   t h e   b a s i s   o f   ro a d m a p s. 
M o re ove r,   t h e   E U   w i l l   co nt i n u e   to   s u p p o r t 
t h e   p r o c e s s   o f   b u i l d i n g   u p   p r o c u r e m e n t 
c a p a c i t y   w i t h   f i n a n c i a l   a s s i s t a n c e   a n d 
wor ksh ops and semin ar s too.

I n   t h e   c a s e   o f   c o m p l e x   i n f r a s t r u c t u r e 
p r o j e c t s   w h i c h   r e q u i r e   s p e c i f i c   s k i l l s   a n d 
k n o w l e d g e ,   t h e   C o m m i s s i o n   o r g a n i s e d 
s u p p o r t   f ro m   J a s p e r s   ( J o i nt   As s i s t a n ce   fo r 
S u p p o r t i n g   Pro j e c t s   i n   Eu ro p e a n   R e gi o n s ) 
w i t h   a   v i e w   to   b u i l d i n g   u p   t h e   c a p a c i t y   o f 
all  stak eh olde rs  in  Croatia  and  to  d evel op -
i n g   a   p i p e l i n e   o f   m a t u re   p ro j e c t s   i n   o rd e r 
t o   i m p r o v e   a b s o r p t i o n   o f   S t r u c t u r a l   a n d 
Cohe sion  Fund s in th e fut ure.

1 9.
Cro at i a’s   i n s t i t u t i o n a l   f ra m e wo r k   fo r   co h e -
s i o n / r u r a l   d e v e l o p m e n t   p o l i c y   b u i l d s   o n 
e x i s t i n g   s t r u c t u r e s   f o r   i m p l e m e n t i n g   I PA 
Components II, III, IV and V (largely at cen-
t r a l   l e ve l ) .  Th i s   c h o i c e   w a s   m a d e   t o g e t h e r 
w i t h   Cro at i a n   a u t h o r i t i e s,   p a r t l y   to   s e c u re 
i n s t i t u t i o n a l   c o n t i n u i t y   a t   t h e   t i m e   o f 
a c c e s s i o n   a n d   t o   a v o i d   l o s i n g   i n v e s t -
m e n t s   i n   c a p a c i t y   b u i l d i n g .   B u i l d i n g   u p 
t h e   c a p a c i t y   o f   re l e va nt   l o c a l   a n d   re gi o n a l 
b o d i e s   i s   a   c o m m i t m e n t   g i v e n   b y   C r o a t i a 
a n d   w h i c h   w i l l   b e   m o n i t o re d   b y   t h e   Co m -
miss ion  unt il acces sion .

V.
Th e   Co m m i s s i o n   we l co m e s   t h e   a s s e s s m e nt 
b y   t h e   C o u r t .   T h e   r e c o m m e n d a t i o n s   a r e 
c o n s i s t e n t   w i t h   t h e   l e s s o n s   l e a r n e d   f r o m 
t h e   Co m m i s s i o n’s   ow n   e va l u at i o n s   a n d   a re 
a l r e a d y   b e i n g   f o l l o w e d   u p   o r   a r e   b e i n g 
integrated in the design of financial assist -
ance, in par ticular the revised multiannual 
plan ning do cu ment s for  2011– 1 3 .

OBSERVATIONS

5.
As  regards  Figure  1  (EU  funding  allocations 
p o s t   a c c e s s i o n ) ,   f o r   2 0 1 3 ,   t h e   a l l o c a t i o n s 
re fe r re d   to   i n   t h e   t a b l e   a re   t h o s e   s e t   o u t   i n 
t h e   d r a f t   t e x t   o f   t h e   Ac c e s s i o n  Tre a t y   w i t h 
C r o a t i a ,   e x c l u d i n g   C A P   e x p e n d i t u r e .   F o r 
2 0 1 4   o n w a r d s ,   t h e   a c t u a l   a m o u n t   C r o a t i a 
w i l l   re ce i ve   w i l l   d e p e n d   o n   t h e   o u tco m e   o f 
the  negotiations  for  the  EU  financial  frame -
w o r k   2 0 1 4 – 2 0 .   T h e   C o m m i s s i o n   t h e r e f o r e 
co n s i d e r s   t h a t   t h e   d a t a   fo r   2 0 1 4 – 1 5   i n   Fi g -
ure 1 should be treated as estimates.

13.
The Commissio n co ns id ers  that  t he  ben c h -
m a r k   a p p ro a c h   wa s   a p p l i e d   to   Cro at i a   i n   a 
w i d e   a n d   co m p re h e n s i ve   way   by   i n c l u d i n g 
i n s t i t u t i o n a l   m a n a g e m e n t   a n d   i m p l e m e n -
t at i o n   a s p e c t s.  Th e   n e g o t i at i n g   f ra m e wo r k 
fo r   C ro at i a   p rov i d e d   fo r   t h e   u s e   o f   b e n c h -
marks for the opening and closing of nego -
t i at i n g   c h a p te r s.   B e n c h m a r k s   a n d   a c h i e ve -
m e n t   o f   t h e m   a re   d e c i d e d   by   t h e   Co u n c i l, 
u p o n   r e c o m m e n d a t i o n s   b y   t h e   C o m m i s -
s i o n .   B e n c h m a r k s   e n h a n c e   t h e   q u a l i t y   o f 
t h e   n e g o t i a t i n g   p r o c e s s   b y   e n s u r i n g   t h a t 
t h e   c a n d i d a t e   c o u n t r y   i s   s u f f i c i e n t l y   p r e -
p a re d   fo r   m e a n i n g f u l   n e g o t i at i o n s   a n d   fo r 
t a k i n g   o n   t h e   o b l i g a t i o n s   o f   m e m b e r s h i p. 
B e n c h m a r k s   a re   i n d i v i d u a l   fo r   e a c h   n e g o -
t i a t i n g   c h a p t e r   ( e . g.   C h a p t e r   1 1   o r   C h a p -
ter 22) and depend on the areas addressed 
a n d   t h e   s y s t e m   t o   b e   e s t a b l i s h e d .   B e n c h -
m a r k s   t a k e   i nto   a cco u nt   t h e   n e e d   to   b u i l d 
u p   c a p a c i t y   gra d u a l l y   a n d   to   h ave   t h e   re l -
evant capacit y and struc tures fully in place 
b y   t h e   d a t e   o f   a c c e s s i o n ,   a n d   m e a s u r e 
p r o g r e s s   t o w a r d s   s e t t i n g   u p   t h e s e   s t r u c -
t u r e s .   T h e   C o m m i s s i o n   c l o s e l y   m o n i t o r s 
p r o g r e s s   t o w a r d s   t h e   b e n c h m a r k s ,   u s i n g 
a l l   ava i l a b l e   to o l s   s u c h   a s   a n n u a l   p ro gre s s 
re p o r t s   a n d   m e e t i n g s   u n d e r   t h e   s t a b i l i s a-
tion a nd asso c iation agreem ent   (SAA) .

Special Report No 14/2011 – Has assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

20.
D e l ays   i n   i m p l e m e nt at i o n   re m a i n   a n   i s s u e, 
p a r t i c u l a r l y   f o r   t h e   t r a n s p o r t   a n d   e n v i r -
o n m e n t   o p e r a t i o n a l   p r o g r a m m e s ,   d u e   t o 
l a t e   a c c r e d i t a t i o n s   o f   m a n a g e m e n t   s y s -
t e m s   a t   n a t i o n a l   l e v e l   a n d ,   c o n s e q u e n t l y, 
c o n f e r r a l s   o f   m a n a g e m e n t   b y   t h e   C o m -
m i s s i o n .   I m p l e m e n t a t i o n   c o u l d   n o t   s t a r t 
u n t i l   c o n f e r r a l s   o f   m a n a g e m e n t   w e r e 
g r a n t e d .   Fu r t h e r m o r e ,   t h e   i n f r a s t r u c t u r e 
p r o j e c t s   w h i c h   a r e   f u n d e d   u n d e r   t h e   t w o 
I PA   I I I   o p e r a t i o n a l   p r o g r a m m e s   a r e   c o m -
p l e x   b y   n a t u r e ,   w i t h   t h e   a d d e d   r e q u i r e -
m e n t   t h a t   p l a n n i n g ,   p r o c u r e m e n t   a n d 
i m p l e m e nt at i o n   a c t i v i t i e s   m u s t   b e   c a r r i e d 
o u t   i n   a c c o r d a n c e   w i t h   E U   r u l e s .   M i t i g a t -
i n g   m e a s u re s   we re   i nt ro d u ce d   a n d   w i l l   b e 
r e i n f o r c e d ,   s u c h   a s   c o n t i n u o u s   t e c h  n i c a l 
a s s i s t a n c e ,   c l o s e   c o o p e r a t i o n   w i t h   t h e 
E U   D e l e g a t i o n ,   i n c r e a s e d   g u i d a n c e,   d e d i -
c a t e d   s e m i n a r s   a n d   wo r k s h o p s.   Pro p o s a l s 
t o   s t r e a m l i n e   a n d   i n c r e a s e   t h e   e f f i c i e n c y 
o f   t h e   I PA ,   b a s e d   o n   l e s s o n s   l e a r n e d ,   w i l l 
also be discussed within the nex t financial 
framewor k  (see  p oint 5 1) .

A s   f o r   C o m p o n e n t   V,   i n   A p r i l   2 0 1 1   t h e 
C o m m i s s i o n   i n f o r m e d   t h e   C r o a t i a n 
a u t h o r i t i e s   a b o u t   t h e   r i s k   o f   d e c o m m i t -
m e nt   o f   2 0 0 7   a n d   2 0 0 8   r u ra l   d e ve l o p m e nt 
f u n d s   a n d   u r g e d   t h e m   t o   t a k e   a p p r o p r i -
a t e   r e m e d  i a l   a c t i o n ,   i n c l u d i n g   a   d e t a i l e d 
a n a l ys i s   o f   t h e   o b s t a c l e s   to   t a k e - u p   o f   t h e 
f u n d s   b y   p o t e n t i a l   b e n e f i c i a r i e s   a n d   a n 
a c t i o n   p l a n   t o   r e m o v e   s u c h   o b s t a c l e s   a s 
f a r   a s   p o s s i b l e .   C r o a t i a   w a s   a l s o   a s k e d   t o 
r e p o r t   b i - m o n t h l y   t o   t h e   C o m m i s s i o n   o n 
t h e   p r o g r e s s   m a d e   i n   c o n t r a c t i n g   u n d e r 
Compone nt  V.

40

REPLY OF THE  
COMMISSION

2 1.
A n   i m p o r t a n t   d i s t i n c t i o n   h a s   t o   b e   d r aw n 
b e t w e e n   I S PA   p r o j e c t s   a n d   I PA   p r o -
grammes. Under ISPA, the financing agree -
m e n t   ( i . e .   t h e   f i n a n c i n g   m e m o r a n d u m ) 
c o u l d   n o t   b e   s i g n e d   u n t i l   t h e   C o m m i s -
s i o n   h a d   a d o p t e d   t h e   d e c i s i o n   a p p r o v -
i n g   t h e   p r o j e c t .   U n d e r   I PA ,   t h o u g h ,   t h e 
f i n a n c i n g   a g re e m e n t   c o u l d   n o t   b e   s i g n e d 
i m m e d i a t e l y   a f t e r   t h e   C o m m i s s i o n   h a d 
a d o p t e d   t h e   d e c i s i o n   o n   t h e   o p e r a t i o n a l 
p r o g r a m m e .   T h e   a d d i t i o n a l   c o n d i t i o n   f o r 
s i gn a t u re   o f   t h e   f i n a n c i n g   a gre e m e n t   w a s 
co n fe r ra l   o f   m a n a g e m e nt   p owe r s.  Th i s   d i f-
fe re n ce   m a k e s   i t   d i f f i c u l t   to   co m p a re   I S PA 
direc t ly with  IPA.

S ee  also the  reply  under  point 2 0 .

2 2.
S p e e d i n g   u p   p r o c u r e m e n t   i s   o n e   a r e a 
which is being intensively monitored, with 
t h e   C ro a t i a n   a u t h o r i t i e s   a n d   t h e   Co m m i s -
s i o n   c o n s t a n t l y   e x p l o r i n g   w a y s   t o   l a u n c h 
t e n d e r s   a n d   c o n c l u d e   c o n t r a c t s   e a r l i e r. 
B e n c h m a r k s   t o   t h a t   e f f e c t   h a v e   b e e n 
i n co r p o r a te d   i n   t h e   ro a d m a p s   fo r   w a i v i n g 
ex  an te controls. 

2 3.
The Commission is helping to build up pro -
c u re m e nt   c a p a c i t y   by   m e a n s   o f   s ys te m at i c 
guidance, meetings on procurement issues 
with the national author ities and feedback 
on er rors made and improvements needed. 
A l t h o u g h   t h i s   m e a n s   o c c a s i o n a l   d e l a y s , 
i t   i s   a n   i m p o r t a n t   a s p e c t   w i t h   a   v i e w   t o 
s o u n d   f i n a n c i a l   m a n a g e m e n t   o f   p o s t -
access ion  funds.

D e l a y s   a r e   m a i n l y   d u e   t o   t h e   l e a r n i n g 
c u r v e   t h e   a u t h o r i t i e s   w e r e   a n d   s t i l l   a r e 
o n ,   i n   p a r t i c u l a r   a s   re g a rd s   i n f r a s t r u c t u re 
p r o j e c t s   w h i c h   a r e   c o m p l e x   a n d   t a k e   a 
l o n g   t i m e   t o   p r e p a r e   ( s e e   p o i n t   1 6 ) .   T h e 
i s s u e s   o f   b u i l d i n g   u p   p r o c u r e m e n t   c a p -
a c i t y   a n d   re d u c i n g   d e l ay s   i n   i m p l e m e n t a -
t i o n   a r e   r e g u l a r l y   r a i s e d   i n   r e l e v a n t   f o r a 
( e. g. mon itor in g comm ittees) .

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

4141

REPLY OF THE  
COMMISSION

2 7.
T h e   C o m m i s s i o n   p l a n s   t o   m a k e   a   m o r e 
s y s t e m a t i c   u s e   o f   S M A R T   o b j e c t i v e s   a n d 
re l a te d   i n d i c a to r s   i n   i t s   p ro gr a m m i n g   a n d 
plann in g ac tivit ies.

T h e   i n t e r i m   e v a l u a t i o n s   fo r   t h e   c a n d i d a t e 
c o u n t r i e s   u n d e r   I PA   I I I   a r e   s c h e d u l e d   f o r 
t h e   e n d   o f   2 0 1 1 / b e gi n n i n g   o f   2 0 1 2 .   I n   t h e 
c a s e   o f   C r o a t i a ,   t h e   t i m i n g   o f   t h e   i n t e r i m 
e v a l u a t i o n s   c o i n c i d e s   w i t h   t h e   t i m i n g   o f 
t h e   e x   a n t e   e v a l u a t i o n   f o r   t h e   S t r u c t u r a l 
F u n d   o p e r a t i o n a l   p r o g r a m m e s   ( C r o a t i a 
c o m m i t t e d   i t s e l f   t o   s u b m i t   t h e   f i n a l   O P s 
f o r   S t r u c t u r a l   Fu n d s   b y   t h e   e n d   o f   2 0 1 2 ) . 
Fu t u r e   S t r u c t u r a l   Fu n d   O Ps   w i l l   b e   e x - I PA 
O P s   w h i c h   w i l l   b e   e x t e n d e d   t o   t a k e   i n t o 
account th e additional budget.

2 8.
A   p ro j e c t   t h at   re p l i c ate d   t h e   L P E   m o d e l   i n 
a l l   2 1   c o u n t i e s   w a s   s u p p o r t e d   u n d e r   I PA 
Component IV. This projec t reac tivated the 
L P E   s t r u c t u r e s   s i n c e   2 0 0 9   w h i c h   b e c a m e 
e x t e n s i v e l y   i n v o l v e d   i n   f o r m u l a t i n g   t h e 
h u m a n   r e s o u r c e   d e v e l o p m e n t   s t r a t e g i e s 
a n d   a c t i o n   p l a n s   i n   t h e   c o u n t i e s ,   p a v i n g 
t h e   w a y   f o r   t h e i r   f u t u r e   i n v o l v e m e n t   i n 
E S F   p r o j e c t s .   O n g o i n g   t e c h n i c a l   a s s i s t -
a n c e   s c h e m e s   a r e   c u r r e n t l y   i n v e s t i g a t i n g 
options  for  the  sus tain abilit y of L P E s.

2 9.
U n d e r   t h e   s e c o n d   p h a s e   o f   I PA   I V   ( 2 0 1 0 –
11), a projec t was proposed to build up the 
a d m i n i s t r a t i v e   c a p a c i t y   o f   t h e   L P E s .   T h e 
c a l l   f o r   p r o p o s a l s   i s   e x p e c t e d   t o   b e   p u b -
l i s h e d   b y   t h e   e n d   o f   2 0 1 1   a n d   w i l l   f o c u s 
o n   s u p p o r t i n g   t h e   L P E s   w i t h   d e v e l o p i n g 
co u n t y   p o l i c y,   i m p rov i n g   t h e   a c t i o n   p l a n s 
an d prepar ing  an d evaluatin g proj ec t s.

24.
T h e  ‘ N + 3 ’  r u l e   i s   a   c h a l l e n g e ,   p a r t i c u l a r l y 
fo r   t h o s e   p r o g r a m m e s   w h e r e   c o n fe r r a l   o f 
management powers is required and, more 
par ticular ly, confer ral without  ex ante  con-
t r o l s   b y   t h e   C o m m i s s i o n .   A s   r e g a r d s   t h e 
d i s b u r s e m e n t   d e a d l i n e s ,   a   c o u n t r y   h a s , 
i n   p r i n c i p l e ,   3   y e a r s   t o   s p e n d   f u n d s   ( N + 3 
r u l e ) .   I n   p r a c t i c e ,   h o w e v e r,   t h i s   p e r i o d   i s 
m u c h   s h o r t e r   —   i m p l e m e n t a t i o n   c a n n o t 
s t a r t   u n t i l   c o n f e r r a l   o f   m a n a g e m e n t   h a s 
been  grante d.

Th e   Co m m i s s i o n   a l s o   re fe r s   t o   i t s   re p l y   t o 
point  20.

25.
E x p e r i e n c e   g a i n e d   u n d e r   I PA   C o m p o -
n e nt s   I I I   to  V   s h o u l d   f a c i l i t ate   t h e   n at i o n a l 
a cc re d i t a t i o n   p ro ce s s   a n d   t h e re fo re   a l l ow 
an  easier and  f aster star t-u p.

T h e   i n s t i t u t i o n a l   c o n t i n u i t y   b e t w e e n   I PA 
a n d   p o s t - a c c e s s i o n   i n s t r u m e n t s   s h o u l d 
h e l p   to   re d u ce   t h e   r i s k   o f   s l ow   a b s o r p t i o n 
o f   p o s t - a c c e s s i o n   a s s i s t a n c e.  T h a t   s h o u l d 
ease  comp liance ass es sment.

Te c h n i c a l   a s s i s t a n c e ,   i n c l u d i n g   J a s p e r s 
( s e e   r e p l y   t o   p o i n t   1 6 ) ,   i s   m a d e   a v a i l a b l e 
u n d e r   I PA   t o   s u p p o r t   n a t i o n a l   a u t h o r i t i e s 
w i t h   p r e p a r i n g   p r o c u r e m e n t   d o c u m e n t s 
s o   t h at   t h e y   w i l l   b e   re a d y   to   b e   p u b l i s h e d 
a s   s o o n   a s   t h e   p o s t - a c c e s s i o n   a l l o c a t i o n s 
become availab l e. 

As   f a r   a s   t h e   p o s t   a cce s s i o n   r u ra l   d e ve l o p -
m e n t   p ro g r a m m e   ( R D P )   i s   c o n c e r n e d,   t h i s 
p r o g r a m m e   w i l l   i n c l u d e   a   w i d e r   r a n g e   o f 
p o t e n t i a l   b e n e f i c i a r i e s / m e a s u r e s   t h a n 
I PA R D,   t h u s   f a c i l i t at i n g   gre ate r   a b s o r p t i o n 
of ru ral d evel op ment fu nding.

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

42

REPLY OF THE  
COMMISSION

I n   t h e   C o m m i s s i o n ’s   v i e w ,   t h i s   g r a d u a l 
a p p r o a c h   i s   t h e   m o s t   a p p r o p r i a t e   w a y   t o 
s e c u r e   t h e   b e s t   r e s u l t s   a n d   t h e   h i g h e s t 
impac t from the IPA’s limited resources (for 
t h e   R CO P,   a b o u t   1 2   m i l l i o n   e u ro s   p e r   ye a r 
over t he  per iod 2 0 07– 11) .

3 2.
The ISPA 2005 railway rehabilitation projec t 
w a s   t h e   f i r s t   r a i l w a y   i n v e s t m e n t   t h a t 
C r o a t i a   i m p l e m e n t e d   w i t h   E U   a s s i s t a n c e . 
A t   t h a t   t i m e ,   t h e r e   w a s   a   g e n e r a l ,   u n d e r -
s t a n d a b l e,   l a c k   o f   e x p e r i e n ce   a n d   c a p a c i t y 
fo r   p re p a r i n g   te n d e r   d o c u m e nt s   i n   C ro at i a 
w h i c h   r e s u l t e d   i n   d e l a y s .   N e v e r t h e l e s s , 
these delays have been par tly made up and 
t h e   p r o j e c t   i s   e x p e c t e d   t o   b e   c o m p l e t e d 
successfully by the end of 2011.

I n d e e d,   t h e   I PA   2 0 0 7   ra i l   p ro j e c t   fo r   wo r k s 
a t   Z a g r e b   m a i n   r a i l w a y   s t a t i o n   c o n f i r m s 
t h a t   l e s s o n s   h a v e   b e e n   l e a r n e d   f r o m   t h e 
I S PA   p ro j e c t.  Th e   s h o r te n i n g   o f   t h e   d e l ays 
f o r   t h e   s e c o n d   r o u n d   o f   r a i l w a y   p r o j e c t s 
s e e m s   t o   c o n f i r m   a   ‘ l e a r n i n g   b y   d o i n g ’ 
effec t.

3 3.
T h e   I S PA   c o n t r a c t   i n   q u e s t i o n   i s   b y   f a r 
t h e   b i g g e s t   c o n t r a c t   f u n d e d   f r o m   t h e   E U 
b u d g e t   i n   Cro at i a ,   ye t   i t   co u l d   re co n s t r u c t 
o n l y   a   s m a l l   s t r e t c h   o f   r a i l w a y   c o m p a r e d 
w i t h   t h e   w h o l e   l e n g t h   o f   t h e   c o r r i d o r. 
H o we ve r,   o t h e r   s e c t i o n s   o n   t h e   s a m e   c o r -
r i d o r   h a v e   a l r e a d y   b e e n   p l a n n e d   a n d   t h e 
f u n d s   h ave   b e e n   s e c u re d.  Th e   co r r i d o r   w i l l 
b e   u p g r a d e d   i n   p h a s e s ,   a s   f u n d s   b e c o m e 
available.

S ee  also the  reply  under  point 3 2 .

30.
B e fo re   a ny   c o n s t r u c t i o n   c a n   s t a r t   a n d   t h e 
a r e a   i s   p u t   t o   u s e ,   t h e   c o m p a n i e s   w h i c h 
p u rc h a s e d   t h e   p l o t s   m u s t   o b t a i n   t h e   re l e -
v a n t   p e r m i t s .   I n   C r o a t i a   t h i s   a d m i n i s t r a -
tive par t of this procedure nor mally lasts 2 
years. As the procedures for obtaining per-
m i t s   a re   s t i l l   i n   p ro g re s s,   i t   i s   t o o   e a r l y   t o 
assess  wheth er  th e  p roj ec t  is   s u cce s sf ul   or 
n o t .  Th e   d e l ay   i s   o n l y   a n   i n d i c a t i o n   o f   t h e 
l e n g t h   o f   t h e   a d m i n i s t r a t i v e   p r o c e d u r e s 
preceding any const ru c tion ac tiv i t y. 

31.
Th e   d e l ays   i n   t h e   e va l u at i o n   p ro ce d u re   fo r 
t h e   g r a n t   s c h e m e   w e r e   m a i n l y   d u e   t o   t h e 
l a r g e   n u m b e r   o f   a p p l i c a t i o n s   i n   r e s p o n s e 
to th e c all.

The capacit y of the potential projec t bene -
f i c i a r i e s   i s   b e i n g   b u i l t   u p   w i t h   t h e   s u p p o r t 
o f   e x t e r n a l   e x p e r t s   ( t e c h n i c a l   a s s i s t a n c e 
co nt ra c t   u n d e r   t h e   gra nt   s c h e m e )   a n d   t h e 
exper ienced st a ff of t he rel evant   min ist r y.

As   re g a rd s   t h e   d e s i gn a te d   b o d i e s   re s p o n -
s i b l e   f o r   t h e   f u t u r e   r e g i o n a l   c o m p e t i -
t i v e n e s s   o p e r a t i o n a l   p r o g r a m m e   ( R CO P ) , 
C ro a t i a   h a s   f i n a l l y   d e c i d e d   t h a t   t h e   R CO P 
w i l l   c o n t i n u e   t o   b e   i m p l e m e n t e d   b y   t h e 
C e n t r a l   Fi n a n c e   a n d   C o n t r a c t i n g   A g e n c y 
( C F C A )   a f t e r   a c c e s s i o n   t o o .   T h e   b o d i e s 
d e s i gn ate d   at   t h e   t i m e   o f   t h e   a u d i t   by   t h e 
Cour t (BICR O, HAMAG and the ARD) will no 
longer be invol ved.

W h e n   d e c i d i n g   t o   f o c u s   o n   t h e   1 0   l e a s t 
developed counties, the Commission made 
a   t r a d e - o f f   b e t w e e n   t h e   n e e d   t o   c o n c e n -
t r a t e   t h e   a s s i s t a n c e   a n d   r e d u c e   r e g i o n a l 
dispar ities on the one hand and the r isk of 
losing oppor tunities for the other counties 
on  th e othe r.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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34.
T h e   f o c u s   o n   m a j o r   p r o j e c t s   r e f l e c t s   t h e 
p r i o r i t i e s   o f   C r o a t i a   i n   r e l a t i o n   t o   t h e 
a cq u i s   ( re q u i re m e n t s   a n d   s h o r t   t r a n s i t i o n 
p e r i o d s   fo r   t h e   e nv i r o n m e n t a l   a cq u i s   a n d 
focus  on T EN-T  infrast ruc t ure).

T h e   C o m m i s s i o n   h a s   t a k e n   a d d i t i o n a l 
a c t i o n   t o   h e l p   r e g i o n a l   a n d   l o c a l   p r o -
moters to prepare projec ts for future oper-
ational programmes, from awareness wor k-
s h o p s   i n   a l l   t a r g e t e d   r e g i o n s   t o   t a r g e t e d 
te c h n i c a l   a s s i s t a n ce   to   s u p p o r t   p ro m o te r s 
t o   p r e p a r e   s u c c e s s f u l   a p p l i c a t i o n s   u n d e r 
t h e   s e c o n d   a n d   t h i r d   c a l l s .   P r e p a r a t i o n 
o f   a l l   n e c e s s a r y   t e c h n i c a l   d o c u m e n t a t i o n 
i s   c l o s e l y   fo l l o we d   u p   b y   t h e   Co m m i s s i o n 
and  the Cro at ia n autho r ities.

A s   r e g a r d s   t h e   m a n a g e m e n t   i n f o r m a t i o n 
s ys te m   fo r   t h e s e   f u n d s,   p ro gre s s   h a s   b e e n 
re p o r te d   a f te r   t h e   a u d i t   by   t h e   Co u r t .  Th e 
R edional Polic y DG has recently concluded 
af ter an au dit t hat:

‘ S at i s f a c to r y   p ro gre s s   h a s   b e e n   m a d e   co n-
c e r n i n g   p r a c t i c a l   a p p l i c a t i o n   o f   t h e   m a n -
a g e m e n t   i n f o r m a t i o n   s y s t e m   ( M I S ) .   S o m e 
m o d u l e s   s h o u l d   b e   f i n a l i s e d   i n   o r d e r   t o 
f a c i l i t a t e   i m p l e m e n t a t i o n   a n d   m o n i t o r i n g 
of t he pro jec t s’.

D u e   t o   t h e   n a t u re   a n d   t y p e   o f   b e n e f i c i a r -
i e s ,   I PA   C o m p o n e n t   I V   c o n s i s t s   o n l y   o f 
n o n - m a j o r   p r o j e c t s   i n   t h e   f i e l d   o f   h u m a n 
res ources de ve lo p ment.

35.
T h e   C o m m i s s i o n   r e c o g n i s e s   t h a t   r e c r u i t -
i n g   a n d   re t a i n i n g   q u a l i f i e d   s t a f f   i n   p u b l i c 
a d m i n i s t r a t i o n s   i s   a n d   w i l l   re m a i n   a   c h a l -
l e n g e,   n o t   o n l y   i n   C ro a t i a   o r   i n   c a n d i d a t e 
countr ies  but  al s o in  M emb er St ate s.

T h e   C o m m i s s i o n   i s   c o n s t a n t l y   a d d r e s s -
i n g   t h i s   i s s u e   a n d   w i l l   c o n t i n u e   m o n i t o r -
i n g   p ro gre s s   i n   t h i s   f i e l d,   i n c l u d i n g   d u r i n g 
a u d i t   m i s s i o n s ,   m o n i t o r i n g   a c t i v i t i e s   a n d 
bilateral m eetin gs.

As   re g a rd s   t h e   c h a l l e n g e   f a ce d   by   t h e   C ro  -
atian authorities, it is impor tant to recognise 
the effor ts made by them, as reflected in the 
European  Union  Common  Position  Paper  on 
Chapter 22, dated 15 April 2011.

3 7.
T h e   C o m m i s s i o n   c o n s i d e r s   t h a t   t h e   c o m -
p l e t i o n   o f   t h e   b o d i e s   f o r   i m p l e m e n t i n g 
S a p a rd   a n d   I PA   Co m p o n e nt  V   a n d   t h e   co n -
f e r r a l   o f   m a n a g e m e n t   p o w e r s   w i t h o u t   e x 
a n t e   c o n t r o l s   b y   t h e   C o m m i s s i o n   a r e   s i g -
n i f i c a n t   a c h i e v e m e n t s ,   a l l   t h e   m o r e   s o 
i f   d u e   c o n s i d e r a t i o n   i s   g i v e n   t o   t h e   s i z e -
a b l e   c h a l l e n g e   t h a t   s e t t i n g   u p   a n   e n t i re l y 
n e w   s ys t e m   fo r   i m p l e m e n t a t i o n   o f   S a p a rd 
p o s e d   t o   t h e   C r o a t i a n   a u t h o r i t i e s ,   w i t h 
 litt le  exper ien ce in th is  dom ain.

Fu r t h e r m o r e,   t h e   b e n c h m a r k   a p p r o a c h   t o 
b u i l d i n g   u p   t h e   c a p a c i t y   o f   t h e   C r o a t i a n 
p a y i n g   a g e n c y   i n   p r e p a r a t i o n   f o r   p o s t -
a cce s s i o n   f u n d i n g   h a s   y i e l d e d   s u b s t a n t i a l 
re s u l t s.   C ro a t i a   h a s   s t e p p e d   u p   i t s   e f fo r t s 
a n d   d e m o n s t r a t e d   s u f f i c i e n t   p r o g r e s s 
towards setting up the paying agenc y, thus 
f u l f i l l i n g   t h e   c o n d i t i o n   f o r   c l o s u r e   o f   t h e 
agr iculture and rural development chapter.

C o m m i s s i o n   s t a f f   a r e   c l o s e l y   m o n i t o r i n g 
t h e   p ro gre s s   m a d e   by   t h e   C ro at i a n   p ay i n g 
a g e n c y   a n d   a r e   p r o v i d i n g   i n t e n s i v e   g u i d -
a n ce   fo r   s e t t i n g   u p   E U - co m p l i a nt   m a n a g e -
m e nt   a n d   co nt ro l   s ys te m s   fo r   t h e   co m m o n 
a g r i c u l t u r a l   p o l i c y.   I PA   2 0 0 7   i s   o f f e r i n g 
addit ional suppor t  to  th e paying  a g en c y.

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Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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4 0.	(b)
I t   w a s   c o n s i d e r e d   d i s p r o p o r t i o n a t e ,   f o r 
c o s t - e f f e c t i v e n e s s   r e a s o n s ,   t o   o p t   f o r   a 
c o m p u t e r i s e d   s y s t e m   u n d e r   S a p a r d   a n d 
I PA   C o m p o n e n t   V.   Fu r t h e r m o r e ,   t h e r e   a r e 
still near ly 2 years before accession for the 
paying agenc y to familiar ise itself with the 
b u s i n e s s   p ro ce d u re s   w h i c h   a re   n ow   b e i n g 
framed  in   the   IACS   ( integrated  ad mi nis tra-
t i o n   a n d   c o n t r o l   s y s t e m )   w i t h   t h e   h e l p   o f 
the IPA Component I 2007 projec t sampled 
f o r   t h i s   a u d i t .   T h e   p r o j e c t   p l a n s   t o   b r i n g 
t h e   s y s t e m   t o   t h e   t e s t i n g   p h a s e   i n   e a r l y 
2 0 1 2 .  Th e   r u ra l   d e ve l o p m e nt   m o d u l e s   w i l l 
be tested on the existing Sapard and IPARD 
m e a s u re s   a n d   t h e   d i re c t   p ay m e nt   m o d u l e s 
will be teste d on the  n ational sc h em e s.

4 0.	(c )
D u e   t o   t h e   v e r y   s h o r t   t i m e   f o r   w h i c h 
 S a p a r d   w a s   i m p l e m e n t e d ,   i t   w a s   a g r e e d 
t h a t   C r o a t i a   s h o u l d   n o t   a p p l y   r a n k i n g 
c r i t e r i a .   A   r a n k i n g   s y s t e m   i s ,   h o w e v e r,   i n 
place for IPARD.

4 1.
T h e   s i t u a t i o n   h a s   i m p r o v e d   c o n s i d e r a -
b l y   u n d e r   t h e   I PA R D   p r o g r a m m e.  T h e   l a s t 
m o d i  f i c at i o n   o f   t h e   p ro gra m m e,   a p p rove d 
in November 2010, aimed to generate more 
projec ts under the IPARD in sec tors such as 
m i l k ,   b e e f,   p i g s,   p o u l t r y,   ce re a l s,   f r u i t   a n d 
v e g e t a b l e s   a n d   g r e e n h o u s e s .   T h e   r e s u l t s 
o f   t h i s   r e v i s i o n   a r e   v i s i b l e   i n   t h e   n u m b e r 
o f   a p p l i c a t i o n s   r e c e i v e d   f r o m   p o t e n t i a l 
beneficiar ies. B y 30 June 2011, Croatia had 
re ce i ve d   1 9 3   p ro j e c t s   u n d e r   I PA R D,   o u t   o f 
which 46 have been contrac ted for the first 
t wo   m e a s u re s.   U n d e r   M e a s u re   1 ,   t h e   i n d i -
vidual sec tors are represented propor tion-
a l l y,   f o r   i n s t a n c e   t h e   m i l k   s e c t o r   w i t h   1 7 
p ro j e c t s,   t h e   m e at   s e c to r   w i t h   1 8   p ro j e c t s 
and the fruit and vegetable sec tor with 28. 
The  contrac t in g is s till  ong oing.

38.
Confer ral of management has been granted 
for  four  IPARD  measures  in  November  2009 
a n d   M a r c h   2 0 1 1   r e s p e c t i v e l y ,   w i t h   t w o 
m o r e   i n   t h e   p i p e l i n e .   I t   w a s   a p p r o p r i a t e 
fo r   t h e   te c h n i c a l   a s s i s t a n ce   p ro j e c t   n o t   to 
c o n t a i n   p r e c i s e   t a r g e t s   f o r   t h e   c o n f e r r a l 
o f   m a n a g e m e n t   p o w e r s ,   i n   o r d e r   t o   l e a v e 
t h e   ow n e r s h i p   o f   t h e   s ys te m   a n d   c a l e n d a r 
i n   h a n d s   o f   t h e   n at i o n a l   a u t h o r i t i e s,   w h i c h 
i s   i m p e r a t i v e   f o r   t h e   f u n c t i o n i n g   o f   t h e 
s y s t e m   a n d   i t s   s m o o t h   t r a n s i t i o n   t o   p o s t -
accession environment.

S ee t he rep l y u nd er p o int  37.

40.	(a)
B o t h   S a p a rd   a n d   I PA R D   p ro g r a m m e s   we re 
d e s i g n e d   t o   b e   m a n a g e d   a t   c e n t r a l   l e v e l , 
g i v e n   t h a t   a t   t h e   t i m e   w h e n   t h e y   w e r e 
a p p r o v e d   t h e   p a y i n g   a g e n c y ’s   r e g i o n a l 
offices did not  yet  exis t.

T h e   p a y i n g   a g e n c y   ( i n c l u d i n g   r e g i o n a l 
‘ b ra n c h’  o f f i ce s )   w a s   o f f i c i a l l y   e s t a b l i s h e d 
by   t h e   L aw   o n   t h e   Pay i n g   Ag e n c y   fo r   Agr i -
c u l t u r e,   Fi s h e r i e s   a n d   R u r a l   D e v e l o p m e n t 
( F e b r u a r y   2 0 0 9 ,   O G   3 0 / 2 0 0 9 ) .   R e g i o n a l 
o f f i c e s   a n d   t h e i r   e m p l o y e e s   a r e   c u r r e n t l y 
i n c l u d e d   i n   o n g o i n g   p r o j e c t / c o n t r a c t s 
under  I PA   Com pon ent   I  w ith  a  v i e w   to  pre -
p a r i n g   t h e   p ay i n g   a g e n c y   fo r   i m p l e m e nt a-
tion of the  C AP  af ter access ion.

M o r e o v e r,   t h e   C o m m i s s i o n   m o n i t o r i n g 
a u d i t   m i s s i o n s   r e g a r d i n g   t h e   s e t t i n g - u p 
o f   t h e   f u t u r e   E AG F / E A F R D   p a y i n g   a g e n c y 
h a v e   c o v e r e d   b o t h   t h e   c e n t r a l   a n d   t h e 
r e g i o n a l   o f f i c e s .   B o t h   t h e   h e a d q u a r t e r s 
and a few regional offices were visited. The 
s u b s e q u e n t   r e c o m m e n d a t i o n s   t a r g e t e d 
t h e   i m p rove m e n t s / a c t i o n   n e e d e d   to   m e e t 
t h e   a c c r e d i t a t i o n   c r i t e r i a   a n d   t h e   r e l a t e d 
c a p a c i t y - b u i l d i n g   a s p e c t s   a t   b o t h   l e v e l s 
( i . e .   t r a i n i n g ,   s t a f f   i n c r e a s e s ,   c o n s o l i d a -
tion from 86 branch and regional offices to 
2 1   w i t h   t h e   a s s o c i ate d   re l o c at i o n   o f   o f f i ce 
equipment  and  s ecur it y).

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42.
T h e r e   i s   a   r i s k   o f   d e c o m m i t m e n t   o f   p a r t 
o f   t h e   2 0 0 7   a n d   2 0 0 8   I PA R D   a l l o c a t i o n s , 
m a i n l y   d u e   t o   t h e   d e m a n d i n g   r e q u i r e -
m e n t s   f o r   t h e   c o n f e r r a l   o f   m a n a g e m e n t 
w i t h o u t   e x   a n t e   c o n t ro l s.  Th e   Co m m i s s i o n 
u r g e d   t h e   C r o a t i a n   a u t h o r i t i e s   t o   t a k e 
a p p r o p r i a t e   r e m e d i a l   a c t i o n ,   i n c l u d i n g   a 
d e t a i l e d   a n a l ys i s   o f   t h e   o b s t a c l e s   to   t a k e -
u p   o f   t h e   f u n d s   by   p o te n t i a l   b e n e f i c i a r i e s 
a n d   a n   a c t i o n   p l a n   t o   re m ove   s u c h   o b s t a -
c l e s   a s   f a r   a s   p o s s i b l e.   I t   a l s o   re q u e s t e d   a 
b i - m o nt h l y   re p o r t   o n   co nt ra c t i n g   i n   o rd e r 
to   m o n i to r   t h e   p ro gre s s   m a d e   i n   co nt ra c t -
ing and disb u rs ement  on IPA RD   p roj ec t s.

D i s c u s s i o n s   w i t h   t h e   C r o a t i a n   a u t h o r i t i e s 
on   h ow  to   re medy  t he  l ow   l evel   o f   abso r p -
t i o n   s t a r t e d   i m m e d i a t e l y   a f t e r   t h e   re s u l t s 
o f   t h e   f i r s t   c a l l s   f o r   p r o p o s a l s   f o r   r u r a l 
d e ve l o p m e n t   f u n d s   we re   k n o w n .   Co r re c t -
i v e   m e a s u r e s   w e r e   a d o p t e d   b y   C r o a t i a , 
s u c h   a s   a c c e s s   t o   f a v o u r a b l e   c r e d i t s   a n d 
w a r r a n t y   l i n e s   o r   i m p ro ve d   a s s i s t a n c e   fo r 
t h e   b e n e f i c i a r i e s   to   d raw   u p   p ro j e c t   d o c u-
m e nt at i o n .   Am e n d m e nt s   m a d e   to   t h e   p ro -
g r a m m e   a n d   a p p r o v e d   b y   t h e   C o m m i s -
s i o n   i n   N o v e m b e r   2 0 1 0   i n t r o d u c e d   a   n e w 
t y p e   o f   e l i gi b l e   i nve s t m e nt / s e c to r s   a l l ow -
i n g   n e w   g r o u p s   o f   p o t e n t i a l   b e n e f i c i a r -
i e s   t o   a p p l y   f o r   f u n d s   a n d   t h u s   i m p r o v e 
absor ptio n .

43.
T h e   C o m m i s s i o n   e x p e c t s   t h e   s i t u a t i o n   t o 
improve for subsequent years. The increas-
i n g   n u m b e r   o f   a p p l i c a t i o n s   u n d e r   I PA R D 
s h ows   grow i n g   i nte re s t,   m a i n l y   f ro m   f a r m -
ers and small rural entrepreneurs. The con -
t i n u at i o n   o f   c a l l s   fo r   a p p l i c at i o n s   w i l l   gi ve 
t h e   C ro a t i a n   b e n e f i c i a r i e s   a n   o p p o r t u n i t y 
to become familiar with EU funding proce -
dures befo re acces sion.

The post-accession programming for M em-
ber States will give access to a much wider 
ra n g e   o f   p o te nt i a l   b e n e f i c i a r i e s   d u e   to   t h e 
l a r g e r   c a t a l o g u e   o f   m e a s u r e s   p r o p o s e d 
u n d e r   t h e   R D P   t h a n   i n   I PA R D.   C r o a t i a   w i l l 
h a v e   m o r e   o p p o r t u n i t i e s   t o   c h o o s e   t h e 
m o s t   a p p r o p r i a t e   m e a s u r e s   a n d ,   i n   t h i s 
w a y,   t o   b e s t   a l l o c a t e   a n d   d i s t r i b u t e   E U 
fun ds.

4 4.
B o t h   S a p a rd   a n d   I PA R D   p ro g r a m m e s   we re 
d e s i g n e d   t o   c o m p l e m e n t ,   a n d   n o t   o v e r -
l a p   w i t h ,   n a t i o n a l   m e a s u re s.   H owe ve r,   t h e 
C o m m i s s i o n   i n i t i a l l y   h a d   n o   k n o w l e d g e 
a b o u t   t h e   p o t e n t i a l   r i s k s   o f   c o m p e t i n g 
measures. I t was only in the second version 
of the 2008 S apard I mplementation R epor t 
that Croatia first infor med the Commission 
about the potential over lap with a national 
s c h e m e . 1  T h e   C o m m i s s i o n   i m m e d i a t e l y 
ra i s e d   t h i s   i s s u e   w i t h   t h e   Cro at i a n   a u t h o r-
i t i e s .   D u r i n g   t h e   p r e p a r a t o r y   M o n i t o r i n g 
C o m m i t t e e   m e e t i n g   i n   N o v e m b e r   2 0 0 9 , 
t h e y   i n f o r m e d   t h e   C o m m i s s i o n   t h a t   t h e 
meas ure s concer n ed h ad been  aboli sh ed.

W i t h   r e g a r d   t o   I PA R D ,   t h e   i n f o r m a t i o n 
available to the Commission shows greater 
i n te re s t   f ro m   p o te n t i a l   b e n e f i c i a r i e s,   ra i s-
ing expec tations of more successful imple -
m e n t a t i o n   t h a n   i n   t h e   c a s e   o f   S a p a rd.   S e e 
also th e reply to point 41 .

1 

‘It is evident that there are potential overlaps with the Sapard 

programme but the amounts that were permitted within the 

model are significantly lower that those foreseen by Sapard.’, 2008 

Sapard Implementation Report, p. 10.

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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REPLY OF THE  
COMMISSION

CONCLUSIONS	AND		
RECOMMENDATIONS

4 8.
T h e   C o m m i s s i o n   w e l c o m e s   t h e   C o u r t ’s 
a s s e s s m e n t   o f   t h e   c o n t r i b u t i o n   m a d e   b y 
p r e - a c c e s s i o n   a s s i s t a n c e   t o   b u i l d i n g   u p 
t h e   c a p a c i t y   o f   C r o a t i a   f o r   i m p l e m e n t i n g 
p o s t - a c c e s s i o n   f u n d s .   Fo l l o w i n g   t h e   c o n -
fe r ra l   o f   m a n a g e m e n t   p owe r s,   C ro a t i a   h a s 
i nt ro d u ce d   a   s o u n d   f i n a n c i a l   m a n a g e m e nt 
a n d   co nt ro l   s ys te m .   H owe ve r,   fo r   o n e   s p e -
c i f i c   a r e a   —   p u b l i c   p r o c u r e m e n t   —   t h e 
C o m m i s s i o n   i s   s t i l l   m o n i t o r i n g   p r o g r e s s 
t h r o u g h   e x - a n t e   c o n t r o l s .   T h e   e x p e r i -
e n c e   g a i n e d   u n d e r   a l l   I PA   c o m p o n e n t s   i s 
e x p e c t e d   t o   f a c i l i t a t e   a b s o r p t i o n   o f   p o s t -
a c c e s s i o n   f u n d s   ( i n c l u d i n g   c o m p l i a n c e 
ass essment) .

T h e   C o m m i s s i o n   w i l l   c o n t i n u e   t o   s u p -
p o r t   t h e   C r o a t i a n   a u t h o r i t i e s   w i t h   b u i l d -
i n g   t h e i r   p ro c u re m e nt   a n d   a nt i - co r r u p t i o n 
c a p a c i t y.   T h i s   i n c l u d e s   s y s t e m a t i c   f e e d -
b a c k   b y   t h e   C o m m i s s i o n   o n   e r r o r s   m a d e 
a n d   i m p rove m e nt s   n e e d e d   i n   t h e   p ro c u re -
ment process. I n line with Ar ticle 18 of the 
I PA   i m p l e m e n t i n g   r e g u l a t i o n   a n d   o n   t h e 
b a s i s   o f   r o a d m a p s   s u b m i t t e d   b y   C r o a t i a , 
t h e   C o m m i s s i o n   i s   c o n s t a n t l y   a s s e s s i n g 
the beneficiar y countr y ’s progress towards 
achieving a possible waiver of  ex ante  con-
t r o l .   W h i l e   f u r t h e r   e f f o r t s   b y   C r o a t i a   a r e 
n e e d e d   to   p ave   t h e   way   fo r   s u c h   a   wa i ve r, 
g o o d   p r o g r e s s   h a s   b e e n   m a d e   o n   t h i s 
point  under  all IPA compon ents.

4 9.
Th e   Co m m i s s i o n   we l co m e s   t h e   a s s e s s m e nt 
o f   t h e   C o u r t .  T h e   i n s t i t u t i o n a l   f r a m e w o r k 
i n   C ro a t i a   fo r   t h e   co h e s i o n / r u ra l   d e ve l o p -
ment polic y is embedded in existing mech-
a n i s m s   f o r   I PA   c o m p o n e n t s   I I   t o   V   w h i c h 
a r e   i m p l e m e n t e d   m o s t l y   a t   c e n t r a l   l e v e l . 
T h i s   d i r e c t i o n   w a s   d e c i d e d   t o g e t h e r   w i t h 
Cro at i a n   a u t h o r i t i e s.   B u i l d i n g   t h e   c a p a c i t y 
o f   r e l e v a n t   l o c a l   a n d   r e g i o n a l   b o d i e s   i s   a 
c o m m i t m e n t   w h i c h   C ro a t i a   h a s   g i ve n   a n d 
w h i c h   w i l l   b e   m o n i t o r e d   b y   t h e   C o m m i s -
sion  up  to access ion .

45.
T h e   C o m m i s s i o n   w i l l   c o n t i n u e   t o   p r o v i d e 
a s s i s t a n c e   t o   C r o a t i a   t o   f i g h t   c o r r u p t i o n 
a n d   o r g a n i s e d   c r i m e .   T h i s   i s   r e f l e c t e d   i n 
t h e   m u l t i a n n u a l   i n d i c at i ve   p l a n n i n g   d o c u-
m e n t   ( M I P D )   f o r   2 0 1 1 – 1 3   f o r   C r o a t i a .   Fo r 
i n s t a n c e ,   s u p p o r t   i s   e n v i s a g e d   u n d e r 
t h e   2 0 1 1   I PA   n a t i o n a l   p r o g r a m m e   t o 
s t r e n g t h e n   t h e   N a t i o n a l   Po l i c e   O f f i c e   f o r 
P r e v e n t i o n   o f   C o r r u p t i o n   a n d   O r g a n i s e d 
C r i m e .   Fo r   t h e   f i r s t   y e a r   a f t e r   a c c e s s i o n , 
t h e   E U   w i l l   p r o v i d e   t e m p o r a r y   f i n a n c i a l 
a s s i s t a n c e   ( ‘ t r a n s i t i o n   f a c i l i t y ’ )   t o   C ro a t i a 
t o   b u i l d   u p   i t s   a d m i n i s t r a t i v e   a n d   j u d i -
c i a l   c a p a c i t y   to   i m p l e m e nt   a n d   e n fo rce   E U 
legis lation and to foster exchanges of best 
pra c tice b et ween peer s.

46.
I n   s p i t e   o f   t h e   d i f f i c u l t i e s   e n c o u n t e r e d 
i n   t h e   p r e p a r a t o r y   p h a s e   o f   t h i s   p r o j e c t , 
Cro at i a   h a s   n ow   e s t a b l i s h e d   a   t ra c k   re co rd 
o f   s u b s t a n t i a l   re s u l t s   i n   i nve s t i g a t i o n   a n d 
p r o s e c u t i o n   o f   o r g a n i s e d   c r i m e   a n d   c o r -
ruption cases at all levels. The law enforce -
m e nt   a g e n c i e s,   i n   p a r t i c u l a r   t h e   O f f i ce   fo r 
P r e v e n t i o n   o f   C o r r u p t i o n   a n d   O r g a n i s e d 
C r i m e   ( U S KO K ) ,   h a ve   b e e n   re i n fo rc e d   a n d 
a r e   p r o v i n g   e f f e c t i v e   i n   t a c k l i n g   c o r r u p -
t i o n   i n   C ro a t i a .  T h i s   p ro j e c t   h a s   b e e n   o n e 
f a c t o r   i n   a c h i e v i n g   p r o g r e s s   i n   t h i s   k e y 
area.

T h e   t r a c k   r e c o r d   o f   e f f e c t i v e   h a n d l i n g   o f 
co r r u p t i o n   c a s e s   n e e d s   to   b e   b u i l t   u p   f u r-
th er.

47.
U S K O K   h a s   c o n t i n u e d   t o   b e   a c t i v e   a n d 
i s s u e d   i n d i c t m e n t s   i n   s o m e   m a j o r   c a s e s . 
I n   a   n u m b e r   o f   m i d -   a n d   h i g h - l e v e l   c o r -
ruption cases, investigations are under way 
o r   i n d i c t m e n t s   h a v e   b e e n   i s s u e d ,   o f t e n 
i n v o l v i n g   s t a t e - o w n e d   c o m p a n i e s   a n d 
s e  n i o r   p o l i t i c a l   f i g u r e s .   T h e r e   h a v e   a l s o 
b e e n   c o u r t   r u l i n g s   a n d   f i n a l   j u d g m e n t s 
i n   s u c h   c a s e s,   i n c l u d i n g   c a s e s   i nvo l v i n g   a 
for mer deput y pr ime minister and a for mer 
minister of  defen ce.

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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REPLY OF THE  
COMMISSION

Recommendatio n	1
T h e   C o m m i s s i o n   r e c o g n i s e s   t h e   i m p o r -
t a n c e   o f   b u i l d i n g   u p   p r o c u r e m e n t   c a p -
a c i t y   i n   C r o a t i a .   P r a c t i c a l   m e a s u r e s   h a v e 
b e e n   t a k e n   t o   i n c r e a s e   t h e   c a p a c i t y   o f 
s t a k e h o l d e r s   i n   t h e   f i e l d   o f   p r o c u r e m e n t , 
in cludin g th ose  lis ted below.

Recommendatio n	1 	(a)
T h i s   r e c o m m e n d a t i o n   i s   b e i n g   i m p l e -
m e nte d.   A   n e w   Ac t   o n   Pu b l i c   Pro c u re m e nt 
a i m i n g   a t   f u l l   a l i g n m e n t   w i t h   t h e   a c q u i s 
w a s   a d o p t e d   b y   t h e   C r o a t i a n   p a r l i a m e n t 
o n   1 5   J u l y   2 0 1 1   a n d   w i l l   e n t e r   i n t o   f o r c e 
i n   J a n u a r y   2 0 1 2 .   A   w o r k i n g   g r o u p   e s t a b -
l i s h e d   t o   d e f i n e   m o r e   d e t a i l e d   p r o v i s i o n s 
to   i m p l e m e nt   t h e   n e w   Pu b l i c   Pro c u re m e nt 
A c t   w i l l   d e f i n e   s t a n d a r d   d o c u m e n t a t i o n 
t h a t   s h o u l d   b e   u s e d   i n   t e n d e r i n g   f o r   E U 
co - f i n a n c i n g   a n d   w i l l   d ra f t   s t a n d a rd   d o c u-
m e n t a t i o n   i n   t h e   l a s t   q u a r te r   o f   2 0 1 1 .  Th e 
C o m m i s s i o n   i s   c l o s e l y   m o n i t o r i n g   t h e s e 
developments.

Recommendatio n	1 	(b)
T h e   i m p l e m e n t a t i o n   o f   t h i s   r e c o m m e n -
d a t i o n   i s   u n d e r w a y.   O n   t h e   b a s i s   o f   t h e 
l e s s o n s   l e a r n e d ,   J a s p e r s   ( J o i n t   A s s i s t -
a n c e   Fo r   S u p p o r t i n g   Pro j e c t s   I n   Eu ro p e a n 
R e gi o n s )   w i l l   a i m   to   b u i l d   u p   t h e   c a p a c i t y 
o f   a l l   s t a k e h o l d e r s   i n   C ro a t i a   a n d   d e ve l o p 
a   p i p e l i n e   o f   m a t u r e   p r o j e c t s   i n   o r d e r   t o 
i m p r o v e   t h e   f u t u r e   a b s o r p t i o n   o f   S t r u c -
tural and Coh esion Fun ds.

Recommendatio n	2 	(a)
A s   r e g a r d s   S t r u c t u r a l   Fu n d s,   t h e   Co m m i s-
s i o n   h a s   b e e n   f o c u s i n g   p r i m a r i l y   o n   t h e 
n a t i o n a l   l e v e l   w h i c h   b e a r s   r e s p o n s i b i l i t y 
for the overall processes. Even though sup -
p o r t   fo r   l o c a l   b o d i e s   i s   t h e n   t h e   re s p o n s i -
b i l i t y   o f   t h e   ce nt ra l   a u t h o r i t i e s   o f   Cro at i a , 
t h e   C o m m i s s i o n   w i l l   g r a d u a l l y   f u r t h e r 
a s s i s t   t h r o u g h   i n c r e a s e d   g u i d a n c e ,   w o r k -
s h o p s   a n d   s e m i n a r s   i n   b u i l d i n g   u p   p r o -
c u r e m e n t   c a p a c i t y   a t   r e g i o n a l   a n d   l o c a l 
level as well.

50.
Th e   Co m m i s s i o n   we l co m e s   t h e   a s s e s s m e nt 
b y   t h e   C o u r t .   T h e   m a i n   c a u s e s   o f   d e l a y s 
i n   p r o g r a m m e   i m p l e m e n t a t i o n   w e r e   l a t e 
a c c re d i t a t i o n s   o f   m a n a g e m e n t   s y s t e m s   a t 
n a t i o n a l   l e ve l   a n d   o f   t h e   s u b s e q u e n t   co n-
fer rals of management by the Commission, 
a s   t h e s e   w e r e   p r e - c o n d i t i o n s   f o r   i m p l e -
m e nt at i o n .   As   a l l   t h e   o p e rat i n g   s t r u c t u re s 
a r e   n o w   i n   p l a c e   a n d   f u l l y   f u n c t i o n a l , 
Croatia is now catching up with implemen-
tat ion .

I n   t h e   s p e c i f i c   c a s e   o f   i n f r a s t r u c t u r e , 
o n e   o f   t h e   m a i n   r e a s o n s   fo r   p r o j e c t s   f a l l -
i n g   b e h i n d   t h e   o r i g i n a l   t i m e t a b l e   i s   t h a t 
i n f r a s t r u c t u r e   p r o j e c t s   f u n d e d   u n d e r   I PA 
Co m p o n e n t   I I I   m u s t   c o m p l y   w i t h   E U   r u l e s 
o n   p ro c u re m e n t ,   p l a n n i n g   a n d   i m p l e m e n -
t a t i o n   w h i c h   r e q u i r e d   a   l o n g e r   l e a r n i n g 
cur ve.

Ta rg e t i n g   m a j o r   p ro j e c t s   re f l e c t s   Cro at i a’s 
p r i o r i t i e s   i n   re l at i o n   to   t h e   a q u i s   ( re q u i re -
m e nt s   a n d   s h o r t   t ra n s i t i o n   p e r i o d s   fo r   t h e 
e nv i r o n m e n t a l   a c q u i s   a n d   fo c u s   o n  T E N -T 
infrastruc tu re).

T h e   a p p r o a c h   h a s   b e e n   f o c u s i n g   o n 
n a t i o n a l   i n s t i t u t i o n s   a n d   b o d i e s   t h a t   w i l l 
b e   r e s p o n s i b l e   f o r   m a n a g i n g   S t r u c t u r a l 
a n d   C o h e s i o n   Fu n d s   a f t e r   a c c e s s i o n   ( s e e 
also t he rep ly  to o b ser vation 19 ).

E v e n   t h o u g h   a   l o w   a b s o r p t i o n   r a t e   w a s 
n o t e d   u n d e r   S a p a r d ,   p e r f o r m a n c e   h a s 
i m p ro ve d   u n d e r   i t s   s u c c e s s o r   I PA   Co m p o -
n e n t   V.   T h e   r e s u l t s   o f   f i v e   c a l l s   f o r   a p p l i -
c a t i o n s   l a u n c h e d   h a v e   s h o w n   g r e a t e r 
i n t e re s t   f ro m   p o t e n t i a l   b e n e f i c i a r i e s   f ro m 
d i f f e r e n t   a g r i c u l t u r a l   s e c t o r s .   T h e   a c t i o n 
p l a n   c u r r e n t l y   b e i n g   i m p l e m e n t e d   t o 
i m p ro ve   a b s o r p t i o n   o f   f u n d s   u n d e r   I PA R D 
i s   r e g u l a r l y   d i s c u s s e d   b e t w e e n   t h e   C o m -
m i s s i o n   a n d   C r o a t i a n   a u t h o r i t i e s .   T h e 
emphasis is put on assisting potential ben -
eficiar ies with prepar ing for calls for appli -
c a t i o n s.   S e v e r a l   m e a s u r e s   h a v e   a l s o   b e e n 
t a k e n   to   i nvo l ve   re gi o n a l   a gr i c u l t u ra l   s e r -
m i ce s   i n   a s s i s t i n g   f a r m e r s   a n d   a gr i c u l t u ra l 
entreprene urs.

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

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REPLY OF THE 
COMMISSION

Recommendatio n	3 	(c )
I n t e r i m   a n d   e x   p o s t   e v a l u a t i o n s   a r e 
p l a n n e d   a n d   w i l l   s t a r t   s o o n   a n d   w i l l   s e r ve, 
i n t e r   a l i a ,   f o r   r e v i s i o n   o f   t h e   o p e r a t i o n a l 
program me s.

Recommendatio n	4 	(a)
The Commission has star ted to address this 
issue. Discussions star ted in 2010 bet ween 
t h e   C o m m i s s i o n / E I B   a n d   t h e   C r o a t i a n 
a u t h o r i t i e s   i n   o rd e r   to   m a k e   J a s p e r s   ava i l -
a b l e   t o   C r o a t i a .   J a s p e r s   w i l l   b e   u s e d   t o 
p re p a re   a   p i p e l i n e   o f   m a t u re   p ro j e c t s   a n d 
i n c re a s e   t h e   q u a l i t y   o f   p ro c u re m e nt   d o c u-
ments  as from 20 11 .

Recommendatio n	4 	(b)
T h e   Co m m i s s i o n   i n t e n d s   t o   c o n t i n u e   p ay-
i n g   a t t e n t i o n   t o   a   c o m p l e m e n t a r y   p o r t -
fo l i o   o f   m a j o r   a n d   n o n - m a j o r   p r o j e c t s   fo r 
t h e   p o s t - a c c e s s i o n   p e r i o d .   H o w e v e r,   t h e 
o p e rat i o n a l   p ro gra m m e s   fo r   t ra n s p o r t   a n d 
e n v i r o n m e n t   a r e ,   b y   n a t u r e ,   d e s i g n e d   t o 
in clude main ly projec ts of  E U an d n at ion al 
intere st an d there fore major  proj e c t s.

Recommendatio n	5 	(a)
T h e   C o m m i s s i o n   w i l l   c o n t i n u e   t o   p r o v i d e 
c a p a c i t y- b u i l d i n g   a s s i s t a n ce   to   Cro at i a .   I n 
a fully decentralised system, however, such 
a   d e c i s i o n   t o   o p t   fo r   o n e   o r   m o r e   c o n fe r -
r a l   o f   m a n a g e m e n t   ‘ w a v e s ’  l i e s   w i t h   t h e 
n a t i o n a l   a u t h o r i t i e s.  T h e   Co m m i s s i o n   h a s 
cons iste nt ly  provided guidan ce to Croat ia, 
w h e n e v e r   a p p r o p r i a t e ,   t o   r e d u c e   b o t t l e -
n e c k s   a n d   r i s k s   i n   t h e   p r o c e d u r e s ,   a n d 
h a s   a l s o   w o r k e d   w i t h   C r o a t i a ,   i n   p a r a l l e l 
w i t h   t h e   p r e p a r a t i o n   o f   t h e   f i n a n c i a l   a n d 
o p e r a t i o n a l   i m p l e m e n t i n g   a r r a n g e m e n t s , 
to help it prepare for setting up the neces-
s a r y   i n s t i t u t i o n s   a n d   p ro c e d u re s.  Th i s   h a s 
t a k e n   t h e   f o r m   o f   b o t h   e x t e n s i v e   a s s i s t -
a n c e   ( t w i n n i n g   p r o j e c t s ,   t e c h n i c a l   a s s i s t -
a n c e ,   e t c . )   a n d   c o n t i n u o u s   e x c h a n g e s   o f 
i n f o r m a t i o n   i n   s e m i n a r s   a n d   f a c t - f i n d i n g 
an d advisor y  missions.

As   re g a rd s   a gr i c u l t u re,   t h e   i nvo l ve m e nt   o f 
re gi o n a l   a gr i c u l t u ra l   s e r v i ce s   to   a s s i s t   t h e 
I PA R D   b e n e f i c i a r i e s   h a s   b e e n   o n e   o f   t h e 
managing author it y's pr ior ities since 2010.

F u r t h e r m o r e ,   r e g i o n a l   o f f i c e s   a n d   t h e i r 
e m p l o y e e s   a r e   c u r r e n t l y   i n c l u d e d   i n 
o n  g o i n g   p r o j e c t s / c o n t r a c t s   u n d e r   I PA 
Co m p o n e nt   I   w i t h   a   v i e w   to   p re p a r i n g   t h e 
p a y i n g   a g e n c y   a t   a l l   l e v e l s   fo r   t h e   i m p l e -
ment ation  o f t he C A P  af ter acces s i on .

Recomme ndat ion	2	(b)
T h e   C o m m i s s i o n   w i l l   c o n t i n u e   t o   p r o v i d e 
a s s i s t a n c e   f o r   d e v e l o p i n g   p r o j e c t   i d e a s . 
S u c h   a s s i s t a n c e   h a s   b e e n   p r o v i d e d   u n d e r 
P h a r e   2 0 0 6   a n d   v a r i o u s   o p e r a t i o n a l   p r o -
gra m m e s.   B y   p rov i d i n g   co n s t a nt   te c h n i c a l 
a s s i s t a n ce   a l o n g   w i t h   i n c re a s e d   g u i d a n ce, 
wo r k s h o p s   a n d   s e m i n a r s,   t h e   Co m m i s s i o n 
w i l l   o f fe r   f u r t h e r   a s s i s t a n c e   fo r   g r a d u a l l y 
i m p rov i n g   t h e   m e c h a n i s m s   fo r   s t i m u l at i n g 
th e devel op ment o f p roj ec t ideas.

Recomme ndat ion	3	(a )
S i n c e   2 0 1 1 ,   t h e   C o m m i s s i o n ’s   s t r a t e g i c 
p l a n n i n g   i n c l u d e s   a   m o v e   f r o m   a   p r o j e c t 
a p p r o a c h   t o   a   s e c t o r a l   a p p r o a c h :   e f f o r t s 
a r e   b e i n g   m a d e   t o   f o c u s   o n   s e t t i n g   c l e a r 
S MA R T   o b j e c t i ve s   w h e n   d ra f t i n g   s t ra te gi c 
p l a n n i n g   d o c u m e n t s   a n d   i n   t h e   p r o g r a m -
ming process. The Commission will step up 
s y s t e m a t i c   u s e   o f   S M A R T   o b j e c t i v e s   a n d 
r e l a t e d   i n d i c a t o r s   i n   t h e   n e x t   g e n e r a t i o n 
of I PA  programmes.

Recomme ndat ion	3	(b)
T h e   C o m m i s s i o n   w i l l   l o o k   i n t o   w a y s   o n 
how to improve the qualit y of the monitor-
ing repor t s.

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

4949

REPLY OF THE  
COMMISSION

Recomme ndat ion	5	(b)
T h e   C o m m i s s i o n   i s   a d d r e s s i n g   t h i s   c o n -
c e r n .   T h e   l a s t   m o d i f i c a t i o n   o f   t h e   p r o -
g r a m m e ,   a p p r o v e d   i n   N o v e m b e r   2 0 1 0 , 
a i m e d   t o   g e n e r a t e   m o r e   p r o j e c t s   u n d e r 
I PA R D   b y :   ( 1 )   r a i s i n g   t h e   u p p e r   q u a n t i t a -
tive  ceiling  fo r  th e  s ize  of  el igib l e   f ar m s  i n 
s e c t o r s   s u c h   a s   m i l k ,   b e e f,   p i g s ,   p o u l t r y, 
c e r e a l s ,   f r u i t   a n d   v e g e t a b l e s   a n d   g r e e n -
h o u s e s ;   a n d   ( 2 )   i n t r o d u c i n g   a   n e w   t y p e 
o f   e l i g i b l e   i n v e s t m e n t   i n   t h e   m i l k   s e c t o r 
( m i l k   s h e e p   a n d   g o a t   f a r m s )   a n d   n e w   e l i -
g i b l e   i n v e s t m e n t s   i n   t h e   f r u i t   a n d   v e g e -
t a b l e s   s e c to r   ( i n c l u d i n g   gre e n h o u s e s ) .  Th e 
results are visible in the increased number 
o f   a p p l i c a t i o n s   r e c e i v e d   f r o m   p o t e n t i a l 
beneficiar ies.

M o r e o v e r,   t h e   C o m m i s s i o n   i s   c u r r e n t l y 
evaluating the new proposal for revision of 
t h e   p r o g r a m m e.   O n e   o f   t h e   c h a n g e s   a i m s 
t o   b ro a d e n   t h e   s c o p e   o f   p o t e n t i a l   b e n e f i -
c i a r i e s   u n d e r   M e a s u r e   1 0 1  ‘ I n v e s t m e n t   i n 
a g r i c u l t u r a l   h o l d i n g s’  t o   a l s o   i n c l u d e   t h e 
abovementio ned s ec to rs.

Recommendatio n	6 	(a)
T h i s   r e c o m m e n d a t i o n   i s   a l r e a d y   b e i n g 
i m p l e m e n t e d   a s   d e m o n s t r a t e d   b y   t h e 
multiannual indicative planning document 
( M I P D)   fo r   2 0 1 1 – 1 3   fo r   Cro at i a .   I n   t h e   f i r s t 
y e a r   a f t e r   a c c e s s i o n ,   t h e   E U   w i l l   p r o v i d e 
te m p o ra r y   f i n a n c i a l   a s s i s t a n ce   ( ‘ t ra n s i t i o n 
facilit y ’) to Croatia to build up its adminis -
t rat i ve   a n d   j u d i c i a l   c a p a c i t y   to   i m p l e m e nt 
a n d   e n f o r c e   E U   l e g i s l a t i o n   a n d   t o   f o s t e r 
exc han ges  of bes t prac t ice  bet wee n  pe e r s.

Recommendatio n	6 	(b)
T h e   C o m m i s s i o n   w i l l   c o n t i n u e   t o   f o l l o w 
t h i s   i s s u e   c l o s e l y ,   i n   c l o s e   c o o p e r a t i o n 
with  OLAF.

Recommendatio n	7 	(a)
T h e   C o m m i s s i o n   a g r e e s   w i t h   t h i s   r e c o m -
men dat ion .

Recommendatio n	7 	(b)
T h e   Co m m i s s i o n   t a k e s   n o t e   o f   t h e   re c o m -
m e n d at i o n   a n d   w i l l   d raw   l e s s o n s   f ro m   t h e 
Croatian  exper ience. 

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

Special Report No 14/2011 – Has EU assistance improved Croatia's capacity to manage post-accession funding?

51

European Court of Auditors

Special	Report	No	14/2011

Has	EU	assistance	improved	Croatia's	capacity	to	manage	post-accession-funding?

Luxembourg: Publications Office of the European Union

2011 — 49 pp. — 21 × 29.7 cm

ISBN 978-92-9237-399-3

doi:10.2865/32546

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Q
J
-
A
B
-
1
1
-
0
1
3
-
E
N

-
C

THE  COURT  CONCLUDES  THAT  EU  PRE-ACCESSION  ASSISTANCE  HAS  SIG-

NIFICANTLY  CONTRIBUTED  TO  CROATIA’S  PROGRESS  IN  BUILDING  UP  ITS 

CAPACITY  TO  MANAGE  INCREASED  EU  FUNDING  AFTER  BECOMING  A 

MEMBER  STATE.  THE  ASSISTANCE  WAS  SOUNDLY  PLANNED,  TAKING  INTO 

ACCOUNT LESSONS LEARNED FROM PREVIOUS ENLARGEMENTS. HOWEVER, 

THE OBJECTIVES OF THE ASSISTANCE HAVE NOT YET BEEN FULLY ACHIEVED 

AND MORE CAPACITY BUILDING WORK REMAINS TO BE DONE. THE COURT’S 

RECOMMENDATIONS ADDRESS THE NEED TO STRENGTHEN ASSISTANCE IN 

RELATION TO PROCUREMENT CAPACITY, REGIONAL BODIES, PROJECT PREP-

ARATION,  RURAL  DEVELOPMENT  PROGRAMMES  AND  ANTI-CORRUPTION 

MEASURES, AND TO DRAW LESSONS FROM EXPERIENCE GAINED IN CROATIA 

IN THE COMMISSION’S MANAGEMENT OF PRE-ACCESSION ASSISTANCE TO 

OTHER COUNTRIES.

EUROPEAN COURT OF AUDITORS