COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION Member States' replies to the Court of Auditors' 2010 Annual Report {COM(2012) 80 final}
Date: 2012-02-27
Institutions: European Commission
Subjects: EU Member State, EU research policy, administrative expenditure (EU), common agricultural policy, common transport policy, development aid, economic and social cohesion, energy policy, financial management, fund (EU), implementation of the budget

EUROPEAN COMMISSION 

Brussels, 27.2.2012  
SWD(2012) 24 final 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying the document 

REPORT FROM THE COMMISSION 

Member States' replies to the Court of Auditors' 2010 Annual Report 

{COM(2012) 80 final} 

 
 
 
 
  
  
 
The  Financial  Regulation  applicable  to  the  General  Budget  of  the  European  Union  
states  in  article  143(6)  that  as  soon  as  the  Court  of  Auditors  (the  Court)  has 
transmitted  the  Annual  Report,  the  Commission  shall  inform  the  Member  States 
concerned  immediately  of  the  details  of  that  report  which  relate  to  management  of 
the funds for which they are responsible, under the rules applicable. Member States 
should  reply  to  the  Commission  within  sixty  days  and  the  Commission  transmits  a 
summary  of  the  replies  to  the  Court  of  Auditors,  the  European  Parliament  and  the 
Council before 28 February1of the following year. 

Following  publication  on  10  November  2011,  the  Commission  duly  informed 
Member States of details of the report. This information was presented in the form of 
a letter and three questionnaires (presented as annexes) which Member States were 
required  to  complete-  Annex  1  was  a  questionnaire  on  the  paragraphs  in  the  report 
referring to the individual Member States; Annex II was a questionnaire on the audit 
findings  which  refer  to  the  individual  Member  State  and  Annex  III  was  a 
questionnaire on general findings related to shared management for DAS 2010. 

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

1 

   OJ L 390, 30/12/2006 - Financial Régulation Article 143.6 

1

 
 
 
                                                 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

CHAPTER 2 – REVENUE 

2.3 

2.4 

TOR  are established  and collected  by the Member States. 
Three quarters of these amounts are paid to the Union 
budget, the  remaining quarter  being retained to  cover 
collection  costs. Each Member State sends the  Commission 
a monthly statement of established duties (the ‘A  accounts’) 
and a quarterly statement of those established duties which 
are not included therein (the ‘B accounts’) (3). 
3 When  duties  or levies remain  unpaid  and no security  has  been provided,  or  
they  are  covered  by  securities  but  have  been  challenged,  Member  States  
may   suspend   making   these   resources available  by  entering  them  in  these 
separate accounts. 
The VAT-and GNI-based own resources are contributions 
resulting from the application of uniform rates to Member 
States’ notionally harmonized VAT assessment bases or to 
the Member States’ GNI respectively. 

2

Finland: According to the report, Finland did not give advance notice 
of revisions affecting the GNI form. This non-compliance concerned 
a time series revision published in January 2010. 

Statistics Finland did not notify Eurostat in advance of this revision, 
because overall the changes to the time series (GDP and GNI) were 
fairly small, even though some big changes were made to subsets of 
calculations. As indicated in the Commission’s reply, Statistics 
Finland had informed Eurostat in advance of the time series revisions 
at the meetings of the GNI Committee and during the inspection 
carried out in Finland in January 2009. At Eurostat’s request, 
Statistics Finland sent a letter concerning the scope of the time series 
revisions to Eurostat’s Director-General only subsequently, on 
21.4.2010. 

In the future, Statistics Finland will notify Eurostat in advance of any 
time series revisions. Statistics Finland followed this practice on 
21.6.2011, when it notified Eurostat of a small change to the 1975-
2007 time series connected with a change in the classification of 

 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

2.5 

2.7 

Certain Member States benefit from a reduced call rate for 
VAT (4) and a gross reduction in their annual GNI 
contribution (5) for the period 2007-2013. In addition, the 
United Kingdom is granted a correction in respect of 
budgetary imbalances (“the UK correction”) which involves 
a reduction in its payments of GNI-based own resources. 
4 Germany, the  Netherlands, Austria and  Sweden 
5 The Netherlands and  Sweden. 

industries. 

Austria: The legal basis is the last sentence of Article 2(4) of 
Decision 2007/436/EC, Euratom (OJ L 163, 23.6.2007, pp. 17-21) 
and is confined to the period 2007-2013. 

Germany: Not applicable since the reference body does not contain 
any objection by the Court. 

Sweden: The Court of Auditors has made no observations giving rise 
to comments from Sweden. 

UK: HMT: This is just a factual statement which includes reference to 
the fact that the UK receives abatement and requires no response. 

Annex 1.1, Part 2, describes the Court’s overall audit 
approach and methodology. For the audit of Revenue, the 
following specific points should be noted: 

UK: HMT: This simply states that the Commission undertook an 
examination of a representative sample of recovery orders and again 
requires no response. 

The audit involved examination at the Commission 

level of a representative statistical sample of 55 recovery 
orders covering all types of Revenue (see Annex 2.1). 

(b) 

The assessment of systems covered the 

systems for TOR, VAT-based and GNI-based own 

(i) 
resources; 

commission systems underlying the calculation of the 

(ii) 
UK correction (including an examination of the calculation 
of the definitive amount for 2006); 

systems for waivers of the amounts which are the 

(iii) 
subject of recovery orders, based on a sample of 19 waivers 
(amounting to a total of 11 million euro) authorized by the 

3

 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

2.9 

2.10 

Commission  in 2010 out of a total of 22 million euro; 

(iv)  Commission’s management of fines and penalties. 

(v) 
The review on Commission management 
representations covered the annual activity report of DG 
BUDG. The review on Commission management 
representations covered the annual activity report of DG 
BUDG. 

The Court carried out an assessment of supervisory and 
control systems in Italy, the Netherlands and the United 
Kingdom which contribute around 38 % of the total of TOR. 
It reviewed their accounting systems and examined the flow 
of TOR from establishment to declaration to the 
Commission in order to obtain reasonable assurance that the 
amounts recorded were accurate and complete. The auditors 
carried out testing of key controls relating to the application 
of preferential duty rates, the granting of the “super 
simplification” for users of Local Clearance Procedures 
(notification waiver) and the treatment of freight and 
insurance costs in these Member States. 

In addition, for the six TOR recovery orders included in the 
sample referred to in paragraph 2.7 the Court reconciled the 
selected monthly statement with the underlying accounting 
records of  the  Member State  concerned (6). 
6 Belgium, Czech  Republic, Germany,  France, the Netherlands and Sweden. 

4

UK: HMT: Again no response is required as the ECA merely states 
that it carried out assessments of control systems in three Member 
States including the UK. 

Belgium: SPF Budget : aucune erreur n’a été relevée 
Germany: Not applicable since the reference body does not contain 
any objection by the Court. 

France: Aucune anomalie n’ayant été constatée par la Cour sur les 
documents transmis par la France, aucune mesure n’a dû être prise. 

Sweden: The Court of Auditors has made no observations giving rise 
to comments from Sweden. 

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Belgium: On 25/06/2011 a new version (5.3) of the electronical   
clearing system PLDA (paperless douane and tax) was installed. With 
this new version it's possible to retrieve detailed data for a specific 
period directly from the system. This way correctness in the monthly 
statements is ensured. 

These detailed data are : 

- Date 

- Number of the reporting into the PLDA or the debt in PLDA 

- Amount of the debt 

With its letter of 19/07/2011 (see annex) the Minister of Finance has 
informed the European Court of auditors of the measures taken. The 
European court of auditors has reacted positively on the measures 
taken, specifically what the overview of preliminary finding n° 2 is 
concerned (see letter of CoA of 28/09/2011 in annex) 

UK: HMT: This relates to a Commission error in the calculation of the 
UK abatement which requires no response from the UK.  

2.15 

2.16 

The  Court  found  that overall the  Member States’ A 
accounts’  statements sent  to  the  Commission were free 
from material error. However, for one  transaction (7) out of 
the  six audited, it  was not  possible to  reconcile the amount 
of  TOR declared with the  underlying accounting records. 
7 A monthly statement of Belgium. This Member State accounted for 9,5 % of 
total TOR in 2010. 

The Court's audit found the calculation of Member States' 
contributions and their payment to be free from material 
error. However, the Court detected an error in the 
Commission’s calculation of the 2006 definitive amount (8) 
of the UK correction entered in the 2010 budget, resulting in 
an excessive correction granted to the United Kingdom of 
189 million euro (3,5 % of UK correction 2006) (See Annex 
2.5, in particular its paragraphs 6 and 7). In order to correct 
the error the Commission has exceptionally proposed to 
amend the 2011 budget, in agreement with all Member 
States. 
8 The definitive calculation of the UK correction of year n is entered in the 
budget of year n+4. 

5

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

2.19 

As in previous years, the Court detected problems in the 
procedures and systems which affect the amounts included 
in the B accounts’ statements. These concern in particular: 

unjustified entries (guaranteed and unchallenged cases) and 
write-offs (9), 

UK: Her Majesty’s Revenue & Customs (HMRC): The UK authorities 
submitted a detailed reply by letter dated 12/07/2011 and specific 
details can be found therein. We anticipate that the Commission will 
follow-up this matter. 

delays in the establishment of TOR, in the entry into the 
accounts and/or in the notification of the customs debts (10), 

a) Unjustified entry of guaranteed and unchallenged debts in the B 
Account (PF2702)  

belated starting of recovery actions to collect the amounts 
receivable (11). 
9 The United Kingdom. 
10 Italy, the Netherlands and the United Kingdom. 
11 The United Kingdom. 

The UK complies with EC legislation by including all guaranteed and 
unchallenged post clearance debts in the A Account. However, this 
particular issue involved 2 specific debts that the ECA maintained 
should have been entered in the A Account and not the B. The UK 
authorities replied by letter dated 12/07/2011 in which they contested 
the ECA findings and outlined their reasoning. 

b) Delays in establishment and entry in the accounts and/or 
notification of the debt (PF2702) 

The UK authorities accepted the ECA findings. However, these were 
isolated examples of specific debts and each one has been addressed 
individually in our reply dated 12/07/2011. 

c) Belated starting of recovery action 

All debts are now referred to HMRC’s Debt Management Unit 
(DMU) on a timely basis as both the International Accounts team in 
Southend and the C18 team in Grimsby have introduced checks to 
identify and action debts for timely referral to DMU for recovery 
action. 

6

 
 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

2.20 

The national authorities of Italy, the Netherlands and the 
United Kingdom were not able to fully justify the amounts 
reported in the B accounts’ statements, because they did not 
match the underlying documents. 

UK: HMRC: The UK authorities submitted a detailed reply by letter 
dated 12/07/2011 and specific details can be found therein. In our 
letter we stated that; 

“The UK authorities agree with the ECA findings and we have 
rectified the B Account balance and established new procedures and 
guidance to prevent a recurrence. All live C18s were analysed and 
summed by duty type and compared with the opening balances. 

As a result, an adjustment of £3,273,131.54 has been included within 
the ‘Corrections to establishments’ column in the Q1 2011 B 
Statement to ensure the differences are now reflected in the closing 
balance. 

The team that manages the C18 demands have been instructed not to 
make retrospective amendments to B Account closed quarters. 

Preparation of future B Statements will include an analysis of the 
actual balance outstanding. If retrospective amendments have been 
made they will be verified and an appropriate adjustment will be 
made. 

2.26 

General reservations (12) existed at the end of 2010 on GNI 
data of EU-15 Member States for the period 2002  to 2006,  
and on EU-10 Member States for the period 2004  to 2006,  
pending the completion of the analysis of the  updated or 
new GNI inventories (13). 
12 Article 10(7) of  Regulation (EC,  Euratom) No 1150/2000, as amended,  states  
that,  after  30   September of  the  fourth  year following a given  financial year, 
any changes to GNP/GNI shall no longer be taken into account, except on points 
notified within this time limit either by the Commission or by the Member State. 
These points are known as reservations. A general reservation covers all the data 
of a Member State. All GNI data of Bulgaria and Romania are open in 
accordance with the four-year rule. 

Bulgaria: Council Regulation No 2223/1996 of 25 June 1996 requires 
the Member States to submit data regarding GNI and its components 
to the European Commission by 22 September of each year. All 
Member States must submit a report describing the sources and 
methods used to calculate GNP and GNI to Eurostat. Bulgaria 
submitted its report to Eurostat in March 2010. In December 2010 
Eurostat sent a mission in connection with the report. The second 
mission will take place from 13 to 16 December 2011. 

At present Bulgaria has no reservations in respect of its GNI data. 

Romania: In 2010 and 2011 Eurostat carried out two visits to 

7

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

2.27 

2.31 

13 In accordance with Article 3  of  the  Council   Regulation (EC, Euratom) No 
1287/2003  (OJ L  181,  19.7.2003,  p. 1), Member States shall provide the  
Commission (Eurostat) with an inventory of  the  procedures and  statistics used 
to  calculate GNI and  its components according to ESA 95. 
At the beginning of 2010, there were four (14) open specific 
GNP reservations relating to the period 1995 to 2001. 
During 2010, the Commission did not lift any of these. As 
no additional specific reservations were set, the number of 
outstanding specific reservations at the year-end is 
unchanged. 
14 These open reservations concern Greece (1) and the United Kingdom (3) and 
mainly relate to methodological and compilation aspects. 

In its calculation of the UK correction for reference years 
from 2007 to 2009 the Commission did not include around 
2 % of total payments of EU funds in the figure for total 
allocated expenditure, a basic element in the calculation of 
the correction. The Commission excluded these sums 
because information on where the expenditure was made 
was not available. The Commission did not check whether 
this expenditure could have been allocated for the purposes 
of the calculation (see Annex 2.5, in particular its paragraphs 

8

Romania to analyse the GNI inventory. Following the visits, a number 
of action points to be implemented by September 2014 were drawn up 
and a timetable for their implementation. 

Greece: The European Commission (Eurostat) expressed seven 
reservations about Greece, following examination of the Greek 
inventory relating to implementation of the ESA95 system Of those 
reservations, six have been lifted since July 2009 while the seventh 
was partially lifted. That part of the reservation which remains 
outstanding relates to one aspect of transition from GDP(ESA95) to 
GNP(ESA79), and in particular the manner in which amortisation and 
depreciation for infrastructure works was calculated. ELSTAT made 
new calculations regarding this reservation and sent them to Eurostat 
on 22 September 2011 with the GNI questionnaire and comments on 
the quality report. ELSTAT is collaborating with Eurostat on these 
data. 

UK: Office of National Statistics: There is currently only one open 
reservation relating to GNP for the UK for the period 1995 to 2001, 
and it is anticipated that this will be lifted with publication of the UK 
National Accounts (Blue Book) 2012 in July 2012. 

UK: HMT: This paragraph concerns the Commission’s calculations of 
the UK abatement for the years 2007 to 2009.  It questions the 
accuracy of the Commission’s calculations, but no response is 
required from the UK. 

 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

2.33 

2.38 

2.40 

3 to 5 and 10 to 11). 

The omissions noted in the previous two paragraphs reduce 
the precision of the calculation of the UK correction. It is not 
possible to say in which direction they affect the result of the 
calculation. 

UK: HMT: This paragraph concerns the Commission’s calculations of 
the UK abatement for the years 2007 to 2009.  It questions the 
accuracy of the Commission’s calculations, but no response is 
required from the UK. 

UK: HMT: As for paragraph 2.16 and no UK response needed. 

UK: HMT: This paragraph seems to be a summary of earlier 
paragraphs, e.g. “the B accounts (paragraphs 2.15 and 2.20), and no 
specific response is required 

The error which the Court detected in the Commission’s 
calculation of the 2006 definitive amount of the UK 
correction (see paragraph 2.16) is described in the annual 
activity report of DG BUDG, which sets out the additional 
control measures put in place subsequently. However, taking 
into account the Commission’s own materiality criteria, in 
the Court’s view a reservation should have been made in the 
declaration of assurance of the director-general of DG 
BUDG. 

Based on its audit work, the Court concludes that the 
supervisory and control systems were effective in ensuring 
the regularity of Revenue. However, the Court draws 
attention to the weaknesses set out below: 

(a) The Court’s audits continue to reveal problems with the 
use of the B accounts (paragraph 2.19) and with the 
reliability of the A and B accounts’ statements (paragraphs 
2.15 and 2.20). Weaknesses were also found in national 
customs supervision (paragraph 2.21). The Court concludes 
that supervisory and control systems of Member States 
audited are only partially effective at ensuring that TOR 
recorded are complete and correct. 

(b) Long-outstanding reservations still exist (paragraph 
2.23). The Court also found weaknesses in the 

9

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Commission’s monitoring of the Member States’ application 
of the VAT directives examined (paragraph 2.25). 

(c) The Commission has not yet completed its verification of 
GNI inventories covering GNI data of Member States for the 
period 2002 onwards (paragraph 2.29), and has not yet lifted 
the remaining four open specific GNP reservations on the 
period 1995-2001 (paragraph 2.27). 

(d) There was an error in the definitive calculation of the 
2006 UK correction (15) (see paragraph 2.16). There were 
weaknesses in the calculation of the correction for 
subsequent years (see paragraphs 2.31 to 2.33). The Court 
concludes that supervisory and control systems of the 
Commission are partially effective at ensuring that the UK 
correction is correctly calculated. 

(e) The losses suffered by the budget relating to the waiver 
of amounts receivable might have been avoided or at least 
reduced if the Commission had been more proactive 
(paragraph 2.35). 
13 Moreover, in December 2009, the Commission detected an error in its 
calculation of provisional estimates of the UK correction for years 2008 and 
2009, representing an overestimation of 138 million euro (2,6 %) and 458 
million euro (13 %) respectively. See paragraph 2.17 of the 2009 Annual Report. 
The corrected amounts have been taken into account in the framework of the 
calculation of updated estimates of the UK correction, carried out in 2010 
(before the definitive amounts will be calculated in 2012 and 2013). 

Recommendation: The Commission should evaluate the full 
financial impact of incorrect BTI and update the European 
Binding Tariff Information  
(EBTI-3) database (paragraphs 45 and 46 of Special Report 

10

2.44 

Ireland: Statement of fact no action required. 

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

No 2/2008). 

Progress made: The Commission was able to demonstrate 
that it was seeking to hold Member States accountable for 
losses resulting from the issue of incorrect BTI. 

New functions were introduced in the EBTI-3 database to 
better respect the legal provisions. The user interface of the 
public EBTI-3 database is now translated into all EU official 
languages (except Maltese and Irish) and the Thesaurus is 
being progressively updated. 

Table 2.2 

Austria: In Austria's opinion, at present five reservations for 31 
December 2010 can be confirmed (see Table 1). Following the 
Commission's control visit in September 2011, the Commission is 
now drafting a new control report in which the reservations will again 
be entered. After informal contact with the Commission, it is to be 
assumed that the Austrian reservation regarding compensation for 
small firms (the sixth reservation in the Commission table, which has 
since been withdrawn) will now no longer appear in the report 
currently being drawn up.  

Table 1: Austria - reservations at 31 December 2010: 

Subject 

years concerned 

reservations of 

Weighted average 
rate (concealed 
activities) 

2002 

Commission 

Subject 

years concerned 

reservations of 

Restriction of the 

2003 

Commission 

11

 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

right to deduct input 
tax for cars 
(calculation method, 
private-use 
proportion) 

Infringement 
procedure No 
2007/2453 – 
Application of the 
Sixth VAT Directive 
(VAT exemptions) 

Infringement 
procedure No 
2007/2176 – 
Application of the 
Sixth VAT Directive 
(compensation for 
cars) 

Infringement 
procedure No 
2010/2055 – 
Application of the 
Sixth VAT Directive 
(VAT exemption for 
postal services) 

Compensation for 
SMEs (withdrawn on 
31 July 2010) 

12

2004 

Commission 

2004 

Commission 

2006 - 2009 

Commission 

2007 

Austria 

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Belgium: SPF Budget : au 31 décembre 2010, la Belgique ne fait plus 
l’objet de réserves de la part des services de la Commission 

Bulgaria: As soon as reservations were expressed, Bulgaria instructed 
the National Statistical Institute to correct the formula used to 
calculate the weighted average rate of VAT. The methodology and 
reporting of the weighted average rate were discussed in more detail 
during the visit to Bulgaria by European Commission officials in 
2011. 

Cyprus: The European Commission had three reservations concerning 
the VAT own resources base for the year 2004. After the audit of 10 
to 14 November 2008 on the VAT own resources bases for the years 
2005-2007, a further three reservations were added.  Therefore, at 31 
December 2010 there were six reservations in total. 

The Cyprus authorities (VAT Service) took a number of measures to 
remove the reservations. The VAT Service drew up observations on 
the Commission’s reservations and recommendations and sent them 
to the Commission on 30 October 2009. 

The VAT Service took further action to remove the reservations in 
2010. On 30 April 2010 it sent a report to the European Commission 
containing clarifications and comments (along with revised VAT 
bases) concerning the observations/comments made by the 
Commission in the draft summary report. The report with the 
observations/comments of the VAT Service describes in detail the 
measures taken to remove the reservations.  On 16 September 2010 
the VAT Service sent a supplementary report to the Commission with 
details and comments on additional action taken (e.g. ad hoc research 
for calculation of the VAT on the sale of new buildings and those not 
taxed because a duly completed application had been lodged with the 

13

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

competent government authority before 1 May 2004, application of a 
new method for calculating the compensation granted to farmers 
under the special scheme for farmers). 

The results with respect to the two clarification reports were outlined 
at the meeting of the Advisory Committee on Own Resources - VAT 
held in Brussels on 26 October 2010, at which two reservations were 
lifted.  The conclusions of the meeting with the amendments that 
arose were incorporated in the final summary report. 

The summary report on the findings and observations arising from the 
Commission inspection in Cyprus concerning the VAT bases for 
2005-2007 was sent to the Cypriot authorities on 31 January 2011. Of 
the six reservations two were lifted by the Commission and four are 
pending. 

To summarise the above, we would point out that action to remove 
the Commission’s reservations was taken immediately after the visit 
by EU inspectors in November 2008. Additional measures were taken 
in 2010 and the Commission was sent the clarification report on 30 
April 2010 and additional clarifications on 16 September 2010. The 
Cyprus authorities are continuing their efforts to remove the 
remaining reservations. 

Czech Republic: The reservations raised by DG Budget 
representatives concern intermediate stages in the calculation of the 
basis for the EC’s VAT-based own resources. All reservations are 
being resolved. 

Denmark: Nine reservations were registered for Danish VAT 
compensation as at 31 December 2010. 

Three of these reservations concern passenger transport. The 

14

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Commission had one reservation regarding the subsidies granted to 
public transport, taking the view that these must be included in the 
VAT base. Denmark had a reservation concerning the inclusion of 
subsidies, which have been taken into consideration since 2006. The 
Commission has lifted its reservation as it now agrees with Denmark 
that the subsidies in question should not be included in the base. 

Denmark can lift its reservation on condition that the statements since 
2006 are adjusted. The second reservation relates to a few minor 
aspects concerning long-distance coaches which do not have a ticket 
office or which are not registered in Denmark. Given the nature of the 
matter, there are no statistics throwing light on this, but it is reckoned 
to be of marginal significance. Similarly, the third open point – the 
scale of the use of Swedish taxis from the airport to Sweden (to 
halfway across the bridge) – must also be reckoned to be of marginal 
significance. The treatment will be discussed with the Commission 
during the next control visit. 

There was one reservation concerning the compensation for business 
use of cars. The Commission lifted its reservation in autumn 2011 
after Denmark reviewed a number of the conditions on which the 
compensation was based. 

One reservation concerned the compensation for travel agents. This 
reservation was lifted in autumn 2011. 

One reservation concerns an exemption for the repair and 
maintenance of aircraft which was declared illegal following the 
Cimber Air judgment on domestic flights (ECJ ruling C-382). The 
Commission appears to have misunderstood the extent of the 
calculation of compensation as this should have been taken into 
account in the objections it raised. The case will be discussed during 

15

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

the next control visit. 

One reservation concerns the calculation of compensation in 
connection with the VAT exemption for small traders (artists). The 
compensation has been recalculated, as the Commission will see in 
greater detail during the next control visit. 

Finally, there are two reservations concerning two cases of 
infringements against the Treaty relating to VAT grouping schemes 
and VAT exemption for charities. No ruling has yet been reached in 
these cases. 

Finland: The Commission carried out an inspection in Finland to 
examine VAT-based own resources calculations most recently on 22–
26.3.2010. The next inspection is planned for 2012. 

During the previous visit the Commission examined Finland's VAT-
based own resources statements for 2006 to 2008. The outstanding 
VAT reservations were also discussed during the visit and some of 
them were lifted. Before the visit there were ten VAT reservations, 
but in the course of the 2010 inspection two were lifted and two 
combined, leaving seven outstanding. Finland provided the 
Commission with information on the VAT reservations for the 2009 
summary report in December 2010. 

Since then the following changes have occurred in the VAT 
reservations. Prior to completing the summary of its inspection in 
June 2011, the Commission lifted one reservation and Finland entered 
another one. The reservation lifted by the Commission concerned the 
2001-2009 VAT exemption for the supply of services on board ships 
sailing through the Åland Islands to another EU Member State. The 
VAT own resources base statement for 2009 was incomplete in this 
respect, but Finland remedied this satisfactorily shortly after giving its 

16

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

reply concerning the statement in December 2010. The new 
reservation entered by Finland concerned the effects of car tax and of 
the VAT paid on car tax (ELV) on Finland’s VAT own resources 
base. The reservation entered (ref. Ares (2010) 481036) covers the 
different effects of the car tax issue on Finland's VAT own resources 
base. 

In the summary of the inspection the Commission had added a new 
reservation, which was not discussed during the visit. The reservation 
concerned the fuel calculation included in the car compensation 
related to the VAT own resources base (§ 5.3.7 of the summary) in 
2007 and 2008. When examining the calculation the Commission 
inspectors found it unusual that the average fuel consumption per 100 
kilometres of cars running on diesel was higher than that of cars using 
petrol. Finland revised the fuel calculation satisfactorily in autumn 
2011, but as the reform was approved in 2011 it did not yet have an 
effect on the VAT reservations of 2010. 

In its replies contained in the 2009 audit report Finland also 
mentioned that it will examine the Commission’s reservation related 
to the pro-rata of non-deductibility of exempted industries for the 
years 2004 to 2008. The calculation was revised during 2011 and the 
changes were notified to the Commission’s inspectors in July 2011 in 
connection with Finland's VAT-based own resources statement for 
2010. The tables with the new weighted average rate for 2004-2008 
were delivered to the Commission in September 2011. In the annual 
meeting of the Advisory Committee on Own Resources (ACOR 
meeting of 22.10.2011), the Commission inspectors stated that they 
will still review the calculation changes but that they were satisfied 
with them at this stage. The reservation is expected to be lifted by the 
time the next audit report is prepared. 

17

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Following the above-mentioned changes, there were eight 
reservations outstanding on 31.12.2010. The most long-standing of 
these is Finland's reservation concerning the Åland Islands, which 
dates from 1995. Three reservations concern infringement procedures. 

France: La réserve la plus ancienne a été émise en 2004 lors du 
contrôle des relevés de 2001 à 2003. La Commission a demandé la 
mise en place de nouvelles modalités de calcul de la compensation 
« Véhicules Particuliers ». Cette méthodologie a fait l’objet de 
discussions lors des contrôles sur place suivants et est en passe d’être 
définitivement acceptée moyennant la production par l’Etat français 
de quelques pièces justificatives complémentaires qui sont soumises à 
la Commission à l’issue du contrôle sur place du 28 novembre au 2 
décembre 2011. 

Les autres réserves sont essentiellement des réserves émises en lien 
avec une procédure d’infraction engagée par la DG TAXUD. 

Germany: Not applicable since the reference body does not contain 
any objection by the Court. 

Greece: Regarding the seven outstanding reservations (inspection of 
VAT own resources - 9/2010), Greece has already sent its comments 
to the European Commission auditors and awaits their response for 
the future withdrawal of reservations 

Hungary: 

1. The Commission itself did not express its definitive point of view 
on this matter (which also concerns other states) before the ACOR 
meeting of 26 October 2010, at which it was debated.  At the meeting, 
the majority of Member States supported the Commission position 
that 'invisible' items should be included in WAR at the appropriate 

18

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

VAT key, even though in practice these items do not generate any 
revenue. We will draw up the amended declarations to be submitted 
by the end of 2010 in accordance with this position. We have asked 
the Central Statistical Office to adjust the WAR accordingly. The 
Central Statistical Office sent the amended calculations on 
8 December 2011. 

2. At the Commission’s request, we asked MAHART for data on 
water transport for 2005-2007, which will be included in our amended 
declarations to be submitted by the end of 2010. 

3. The Central Statistical Office has sent the new calculations for the 
compensation for new passenger cars, so these calculations can now 
be included in the amended declarations to be submitted by the end 
of 2010. In agreement with the Commission, the Hungarian 
authorities will not calculate a positive item for used passenger cars 
for 2004-2007. In agreement with the Commission, the negative 
compensation item for used passenger cars will be calculated for 
2004-2007 at the rate for private use (30%). On the possibility of and 
method for taking into consideration the open-end leasing of 
passenger cars, expert consultation is still required with the Hungarian 
Leasing Association. In the case of the fuel compensation, the 
drawing up of a new methodology and database should be considered. 

4. The preliminary estimate for 2007 was submitted to the 
Commission on 5 July 2009. The report does not take into account the 
amounts included in the compensatory levy for intermediate 
consumption, investments and emissions relating to activities in the 
areas of forestry and fisheries, indicating that their effect is 
insignificant. However, in the control report the Commission 
requested that the numbers be included in the declarations. In our 
remarks on the control report, we indicated that the amounts 

19

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

concerning the final year and the other years would be included in the 
declarations in accordance with the methodological reconciliation 
carried out together with the Central Statistical Office. The 
methodological reconciliation has not been concluded yet. 

Italy: The action taken takes the form of a document containing Italy's 
proposals for resolving the reservations still outstanding. At the 
beginning of 2010, in the light of the results of the Commission 
inspection in November 2009, there were eight reservations still 
outstanding for Italy. The measures taken as a result of that inspection 
resolved five more reservations during 2010 and led to five new ones 
being formulated, bringing the total number of reservations to eight. 

In 2011 Italy replied to further comments sent by the Commission on 
24 May 2011 with a document sent on 5 August 2011. In the course 
of the year three more reservations were lifted and two new ones were 
made, with the result that there are currently seven reservations still 
outstanding for Italy. The outstanding reservations will be discussed 
with the Commission at the next inspection, due to take place in April 
2012. 

Latvia: Following the European Commission’s inspection visit, which 
lasted from 7 to 11 June 2010, Latvia updated the calculation of its 
VAT resource base and sent the updated calculations to the European 
Commission on 28 January 2011. On 11 November 2011 the 
European Commission sent a Summary Report ‘Results and 
observations arising from the Commission control in Latvia’ to Latvia 
pursuant to Article 6 of Council Regulation No 1026/1999. Following 
on from this Report, one reservation was cancelled for Latvia and 5 
reservations continued, with 2004 being the earliest year the 
reservations refer to. Thus, in 2011, Latvia has 5 VAT reservations 

20

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

from previous years. 

Lithuania: In view of the report on a VAT-based own resources 
monitoring visit of the European Commission to Lithuania in 2009, 
Lithuania presented its observations including updated calculations 
for the purpose of correcting errors and lifting reservations established 
during the monitoring visit on 5 March 2010. At the request of the 
Commission, additional adjustments were submitted on 10 May 2010 
and 22 June 2010. At a meeting of the Commission’s Advisory 
Committee on Own Resources (ACOR) on 26 October 2010, the 
Commission’s representatives presented the monitoring visit report 
and a summary document on the observations and clarifications of 
Lithuania lifting five of seven remaining reservations. Two 
reservations were left until the Commission’s representatives 
reviewed the documents justifying the corrections, although the 
calculation methodology presented by Lithuania was acceptable. The 
results regarding the remaining two VAT reservations should be 
presented by the Commission after a monitoring visit to Lithuania 
scheduled for June 2012. 

Luxembourg: Date fin = date de diffusion du rapport de la 
Commission sur les résultats de la visite de contrôle du 24 au 26 
novembre 2010, confirmant la levée des réserves + voir correctif dans 
le tableau pour la ligne concernant le Luxembourg 

Malta: Following the control visit in November 2011, VAT 
department and NSO have address all action points and are now 
waiting for the lifting of reservations. 

Poland: The actions aimed at lifting the Commission’s reservations 
regarding the Polish reports on the calculation of a uniform basis for 
VAT own resources commenced soon after the end of the first audit 

21

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

by the Commission (the audit visit took place between 17 and 20 
April 2007). 

However, it is difficult to determine the date of lifting of the 
Commission’s reservations and, consequently, the completion date of 
the actions in this respect. As part of the on-going, periodical audit of 
the statements by the authorised Commission inspectors, new 
comments are often made as regards the calculations that have already 
been the subject of a reservation, thus making the work on correcting/ 
lifting them much more difficult. During the current year, Poland has 
prepared the corrected calculations of those parts of the statements 
that were subject to the reservations (taking into account, above all, 
the findings of the last audit, which took place between 14 and 18 
September 2009). It is therefore possible that the reservations in 
question will be lifted in 2012 in full (or in part). In addition, at the 
beginning of 2011, the Commission, as part of a report summarising 
the audit of statements for 2006-2007, withdrew the reservation 
regarding the calculation of compensation in respect of scientific 
research services. Therefore, the number of reservations has now 
decreased from 6 to 5. 

In connection with the reservations regarding VAT-exempt farmers 
and the weighted average VAT rate, the relevant corrections had 
already been taken into account in the statements for 2008 – 2010 and 
in the audited statements for 2004 – 2007. The corrections require EU 
approval. 

Romania: (UCRBUE) [Unit for coordination of budgetary relations 
with the European Union] 

The first inspection by the European Commission concerning the 
control of own resources from VAT – Annual Declarations for 2007 

22

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

and 2008 took place between 11 and 15 October 2010. However, the 
Inspection Report (English language version) was sent by the 
Commission to the Romanian authorities on 11 January 2011, with 
the official version in Romanian following on 22 February 2011. 

Slovakia: The three outstanding reservations to the calculation of the 
Slovak Republic's harmonised VAT base registered as at 
31 December 2009 were lifted by the Commission following the 
replies and explanations received from the Slovak Republic in 2009 
and 2010. 

Spain: Table 2.2 of the Court of Auditors' Report contains an 
outstanding reservation as of 31 December 2010 concerning VAT in 
Spain. The reservation arises from a proceeding brought against 
Spanish regulations for infringement of Community law on the 
special VAT scheme for travel agencies (Articles 306-310 of the VAT 
Directive). The Spanish authorities have stated that with the 
information currently available, no negative impact can be identified 
in the calculation of the VAT base, since the special scheme 
establishes an alternative mechanism for calculating the tax payable. 
The aim of this mechanism is neutrality, i.e. the tax ultimately 
payable on transactions is the same as the tax that would be payable 
under the normal scheme. This reservation has not yet been resolved 
because the Commission has maintained it while awaiting legal 
certainty through the demonstration of the likely outcome of a 
compensation calculation. 

Sweden: The Court of Auditors has made no observations giving rise 
to comments from Sweden. 

Finland: According to the report, Finland did not give advance notice 
of revisions affecting the GNI form. This non-compliance concerned 

Annex 2.4 

Recommendation follow-up table for revenue. 

23

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

a time series revision published in January 2010. 

Statistics Finland did not notify Eurostat in advance of this revision, 
because overall the changes to the time series (GDP and GNI) were 
fairly small, even though some big changes were made to subsets of 
calculations. As indicated in the Commission’s reply, Statistics 
Finland had informed Eurostat in advance of the time series revisions 
at the meetings of the GNI Committee and during the inspection 
carried out in Finland in January 2009. At Eurostat’s request, 
Statistics Finland sent a letter concerning the scope of the time series 
revisions to Eurostat’s Director-General only subsequently, on 
21.4.2010. 

In the future, Statistics Finland will notify Eurostat in advance of any 
time series revisions. Statistics Finland followed this practice on 
21.6.2011, when it notified Eurostat of a small change to the 1975-
2007 time series connected with a change in the classification of 
industries. 

CHAPTER 3 – AGRICULTURE AND RURAL DEVELOPMENT 

3.2 

3.3 

The objectives (16) of the common  agricultural policy as set 
out  in  the  Treaty are to  increase agricultural  productivity, 
thus  to  ensure  a  fair  standard  of  living for  the  
agricultural community,  to  stabilise markets, to  assure  the 
availability  of supplies   and   to   ensure  that   supplies   
reach  consumers  at reasonable prices. 
16 Article 39 of the Treaty on the Functioning of the European Union. 

The EU budget finances the common agricultural policy 
expenditure mainly through two Funds (17): the European 
Agricultural Guarantee Fund (‘EAGF’), which fully 
finances EU direct aid and market measures (18), and the 

24

 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

European Agricultural Fund for Rural Development 
(‘EAFRD’), which co-finances at varying rates rural 
development programmes. 
17 Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of 
the common agricultural policy (OJ L 209, 11.8.2005, p. 1). 

18 With  the  exception  of  certain  measures  such  as   promotion measures 
and the school fruit scheme which  are co-financed. 

3.4 

The main measures financed by EAGF (43 990 million 
euro) are: 

— the direct  aid ‘Single  Payment  Scheme’ (SPS). SPS 
payments are based on ‘entitlements’ (19)  each of which  is 
activated with one hectare of eligible land declared  by the 
farmer. SPS represented in  2010  29 070 million euro of 
expen- diture (73 %  of direct aids), 

— the  direct  aid ‘Single  Area Payment   Scheme’  (SAPS)  
which provides  for   the   payment   of   uniform   amounts   
per eligible  hectare  of   agricultural  land   and   is  
currently applied in ten of the new Member  States (20)  and 
in 2010 accounted for 4 460 million  euro  of expenditure 
(11 %  of direct aids), 

Czech Republic: This is only information about the system of direct aid 
applied in the Czech Republic (SAPS). It is not a finding; no action can 
be taken. 

Hungary: Intervention storage and export refunds have been declining 
in importance in recent years. In 2010, EUR 64.417 million was paid 
from the EAGF for intervention relating to cereals, sugar and alcohol, 
which also included storage expenses and settlements caused by 
quantitative changes in intervention stocks. In addition, 
EUR 14.77 million was settled under the EU’s 2010 food aid 
programme. Thus, the total amount was EUR 79.187 million. 

Latvia: See comments in Annex II, Part A, Paragraph 1 and Annex II 

Poland: In the budget year 2010, above all: 

payments were commenced under the “Single Area Payment Scheme” 
and under other direct aid schemes (direct payments linked to 
production volume) for the 2010 campaign (from 1 December 2010); 

— other direct   aid  schemes  ‘coupled payments’   linked   
to specific types of  agricultural production.  In  2010  
those schemes accounted for 6 146 million euro of  
expenditure (16 %  of direct aids), 

payments were continued to be made under the “Single Area Payment 
Scheme” and under other direct aid schemes (direct payments linked to 
production volume) for the 2009 campaign, which commenced on 1 
December 2009; 

payments were continued to be made under the “Single Area Payment 

25

 
 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

— interventions  in agricultural  markets:  the  principal  
measures are  intervention  storage  and  export   refunds,  
both   of which have been declining in  importance in 
recent years, and other measures such as  specific support 
for the wine, fruit   and   vegetable   and   food   
programmes   (in   total amounting to 4 314 million euro in 
2010). 

19 The number and value of each farmer’s  entitlement was calculated by the 
national authorities according to one of the models provided for under EU 
legislation. Under the  historical model  each farmer is granted entitlements  
based  on the average amount of aid received and area farmed during the 
reference period 2000 to 2002. Under the regional model all entitlements of a 
region have the same flat-rate value and the farmer is allocated an  entitlement 
for every eligible hectare declared in the  first  year of application. The hybrid  
model combines the historical element with a flat rate amount and, if it is 
dynamic, the  historical component  decreases each   year   until  it becomes a 
predominantly flat rate-system. 

20 Bulgaria, Czech  Republic,  Estonia,  Cyprus,  Latvia,   Lithuania, Hungary, 
Poland, Romania and Slovakia. 

Scheme” for the remaining campaigns (2004-2008) and under other 
direct aid schemes (direct payments linked to production volume) for 
the remaining campaigns (2007-2008). 

Romania: (APIA) 

As regards export refunds, the National Customs Authority (ANV) sent 
the annual attestation reports, concerning the checks performed, to the 
Paying and Intervention Agency for Agriculture (APIA). The annual 
attestation reports are sent each year on the basis of the Protocol for 
permanent inter-institutional collaboration between APIA and ANV 
over the management of the system of import and export licences for 
agricultural products and the implementation of Community 
regulations on the operation of export refund schemes for agricultural 
products (Protocol No 1602/33176/2010). 

Through the annual control report, the National Customs Authority 
attests to the fact that it has met its obligations under the Protocol 
(whose legal basis comprises EU and national legislation in the area of 
the common agricultural policy concerning exports of agricultural 
products for which refunds are granted from EAGF) and that the 
methods used to meet its responsibilities are those specific to ANV's 
area of competence and relate to goods that form the subject of exports 
for which export refunds have been claimed. 

APIA's Directorate for Foreign Trade and Promotion of Agricultural 
Products (DCEPPA) examined the export refund claim files and other 
available information, particularly export documents and remarks made 
by the customs services (allocations made on the back of certificates, 
setting the refund in advance) or all the evidence at its disposal 
(authorisations, certificates, control reports, T5 control documents, 
transport documents, third country import customs declarations and 

26

 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

translations thereof, where appropriate), which provided justification, 
in accordance with the EU regulations and national legislation in force, 
for authorisation of the payment and the actual payment of the amounts 
in question. 
As regards the promotion of wines in third countries, which is a 
measure included in the National Support Programme for the wine 
sector, APIA - DCEPPA examined the following in connection with 
EAGF payments for the 2010 financial year: claims submitted by 
beneficiaries and the necessary supporting documents, reports on 
technical and accounting checks, and notes sent by the Ministry of 
Economic Affairs, Trade and Business Environment following 
participation in actions carried out in third countries targeted by 
information and promotion programmes. 

Protocol No P19 of 23 November 2010 on inter-institutional 
collaboration to monitor the performance of actions for the 
implementation of information and promotion programmes for 
agricultural products on the internal market and in third countries 
(whose legal basis comprises EU and national legislation covered by 
the common agricultural policy concerning the promotion of 
agricultural products and wines for which aid is granted from EAGF 
and from the state budget) was concluded between APIA (the Ministry 
of Agriculture and Rural Development) and the Ministry of Economic 
Affairs, Trade and Business Environment. 

The procedure used by DCEPPA to examine payment files is laid down 
in the procedural manuals (drawn up on the basis of EU and national 
legislation for the granting of export refunds and support for the 

27

 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

promotion of wines) approved at APIA and Ministry level for the 
promotion of wines. For each payment claim, the Directorate draws up 
checklists, in compliance with the principle of double verification, for 
authorisation of the payment and payment authorisation documents. 

Slovakia: Under the currently applicable Regulation (EC) No 73/2009 , 
the direct aid system "single payment scheme (SPS)“ will be applied in 
the new Member States  after 2013. At the moment (and until 2013), 
the system applied also in Slovakia is the "single area payment scheme 
(SAPS)“. The SPS scheme was introduced with a view to separating 
payments from production ("decoupling"). In order to become eligible 
for support under SPS, farmers must first acquire ‘entitlements’ which 
will be established for Slovakia in accordance with the currently 
applicable Regulation (EC) No 73/2009. 

Czech Republic: In the Czech Republic, further to a Memorandum of 
Understanding of 14 July 2010 between SAO and the ECA, and as part 
of a project on a coordinated audit with the ECA, Check 10/29 was 
conducted on funds earmarked to improve the environment and the 
landscape under the Rural Development Programme (SAO Check 
Findings No 10/29 and the ECA’s initial audit findings, filed under 
reference numbers 4393 and 4447, are available). 

The check comprised two modules: 

Module 1: assessment of the principal supervisory and control systems 
established to ensure legality and regularity, and 

Module 2:  the testing of individual transactions carried out by the final 
beneficiary (30 payments). 

3.16 

Annex 1.1, Part 2, describes the Court’s overall audit 
approach and methodology. For the audit of policy group 
Agriculture and Natural Resources the following specific 
points should be noted: 

- the assessment of systems covered for EAGF IACS 
audits, selected using a combination of materiality, risk and 
random (MUS) criteria, in 5 paying agencies in three 
Member States applying the SPS - Germany (Sachsen and 
Niedersachsen), Spain (Castilla La Mancha and 
Extremadura) and United Kingdom (Wales) - and in one 
Member State (France) the control system relating to the 
measure “restructuring of the sugar industry”. For Rural 
Development, the Court randomly selected and tested the 
supervisory and control systems in Germany 

28

 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

(Mecklenburg-Vorpommern), United Kingdom (Scotland), 
Romania, Poland, Portugal, Italy (Toscana), Latvia and 
France. For Environment the Court tested the internal 
control system of DG ENV; 

- a follow-up of weaknesses related to Land Parcel 
Identification System (LPIS) and on-the-spot inspections 
reported under DAS 2008 and 2009 was carried out for 
three paying agencies: in Greece, Bulgaria and Romania, 

- in addition to the audits of payments and systems 
mentioned above, for the Netherlands and the Czech 
Republic co-ordinated audits were undertaken with the 
Dutch and Czech Supreme Audit Institutions. In the 
Netherlands, the audit involved the examination of an 
additional sample of 55 payments of which 53 were made 
under EAGF measures and two related to Rural 
Development expenditure and an assessment of the 
relevant supervisory and control systems. In the Czech 
Republic the audit involved the examination of 30 
payments related to four measures of the Rural 
Development programme and an assessment of the relevant 
supervisory and control systems. The results of the 
examination of these additional samples are included in the 
error rate calculation; 

with respect to cross compliance, the Court limited its 
testing to GAEC obligations (minimum soil cover, 
avoiding the encroachment of unwanted vegetation) for 
which evidence can be obtained and a conclusion reached 
at the time of the audit visit. Certain statutory management 
requirements (animal identification and registration) were 

29

France: Voir réponse à la question suivante. 

Germany: Not applicable since the reference body does not contain any 
objection by the Court. 

Latvia: See comments in Annex II, Part A, Paragraph 1 and Annex II 

Poland: The information set out above, regarding the actions taken and 
completed and the dates when such actions were taken and completed, 
relates to the financial audit carried out in 2010 by the European 
Agricultural Fund for Rural Development (EAFRD) as part of the 
Statement of Assurance for the budget year 2010 (DAS 2010). During 
the audit in question, certain primary management requirements 
(animal identification and registration) were examined in Poland. 

Romania: (APIA) 

Romania has completed the action plan for improving the quality of 
LPIS. By means of the measures taken under the action plan and the 
updating of LPIS every three years on the basis of new ortho-photos, 
the annual updates on the basis of the results of on-the-spot checks and 
other sources providing information on changes in the field, APIA 
ensures that non-agricultural areas are not included in the LPIS 
reference area. Where payments are made unduly, they are recovered 
using the procedures in force. 

Spain: There were no observations. 

UK: RPA: The specific observations made during the assessment of 
systems are commented on in Annex II. 

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Example 3.2 

tested in respect of EAFRD payments. Furthermore, in the 
context of its systems audits, the Court has examined the 
implementation (at national level) of the GAEC standards 
and the control systems implemented by Member States. 
When non-compliance is detected it is currently not 
included in the error rate calculation, 

- the review of the Commission’s management 
representations covered the annual activity reports of DG 
AGRI, DG CLIMA, DG ENV, DG MARE and DG 
SANCO;  

- in addition, in order to assess the basis for the 
Commission’s financial clearance decisions the Court 
reviewed 61 of the certification bodies’ certificates and 
reports related to 56 paying agencies. 

In Spain (Castilla-La-Mancha and Extremadura) the Court 
observed cases of permanent pasture reference parcels 
which were recorded in the LPIS as being fully eligible 
although they were only partly covered with grass and the 
remainder with ineligible elements such as rocks, bush 
land, dense forest, etc. In Greece, there were cases where 
entire forests were regarded as permanent pasture and were 
therefore considered eligible for SPS payments. As a result, 
the eligible area recorded in LPIS and used for the cross-
checks was often overstated. This adversely affected the 
quality of such cross-checks. 

30

Greece: Given that in Greece a reference parcel designated by physical 
boundaries (physical block) is used as a unit, the cross-check is 
therefore designed to ‘run’ by unit. As a consequence each common 
pasture is usually a reference parcel by itself, and as a result the cross-
check affects the specific reference parcel and not all the reference 
parcels in the system. 

According to the Greek authorities there is no danger to the Fund 
because, regardless of the area of pasture declared by the producers, for 
the single payment scheme aid is based on the corrected area of pasture 
based on LU (livestock units) (0.2 LU/ha) and not the total declared 
and, for second pillar payments (compensatory allowance) aid is not 
based on the total area declared but a specific maximum area limit for 
pasture that is typically much smaller than the total pasture area 
declared. 

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

3.31 

The Land Parcel Identification System  (LPIS) is a database 
in  which all the  agricultural area (reference  parcels) of  
the Member  State  is  recorded  including  the   optional  
use  of ortho-photos (28).  In  three  Member  States 
(Greece, Romania and   Spain),  the   Court   found    cases   
where ‘permanent pasture’ (29) reference parcels  were 
recorded in the LPIS  to be 100 % eligible  despite the fact 
that they were partially covered with dense forest or other 
ineligible features and therefore only partially eligible (see 
example 3.2). 

3.32 

In five Member States (Bulgaria, Netherlands (30), Greece, 
Romania and Spain) the Court identified  weaknesses in 
keeping the LPIS up to date. 

31

Spain: The Action Plan to improve LPIS-GIS updating submitted to 
the Commission includes a methodology for calculating and assigning 
an eligibility coefficient in LPIS-GIS recintos used as pasture land. The 
results obtained in the different Autonomous Communities are being 
analysed with a view to adopting the final decision on introduction of 
the methodology. 

Greece: Areas within the pasture land with shrubs and herbaceous 
plants that grow normally in the natural pastures of the Mediterranean 
basin, are food for the small ruminants which primarily use these 
pastures and make up the main animal population of the country 
Therefore, these areas cannot be an exception to the eligible area of the 
pasture. 

Already in the year 2011 a new COVER ID was added, based on photo 
interpretation for woodland areas labelled ‘COVER ID 12 forage 
woodland’.    

Romania: (APIA) Under APIA procedures, these types of area are 
excluded from the reference area of physical blocks in LPIS. The 
isolated cases identified are the result of errors in photo interpretation. 

Spain: The Action Plan to improve LPIS-GIS updating submitted to 
the Commission includes a methodology for calculating and assigning 
an eligibility coefficient in LPIS-GIS recintos used as pasture land. The 
results obtained in the different Autonomous Communities are being 
analysed with a view to adopting the final decision on the introduction 
of the methodology. 

Greece: Clearly, it is not possible at any time to update the database in 
every respect and for the whole country with every small or larger 
change that occurs in it, which obviously objectively happens in all the 
Member States. As indicated by the JRC, the way to renew the LPIS 

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

database for such cases that happen to arise is to treat them as isolated 
cases, until the total renewal of the database with the necessary 
information in the whole country, which is done once a year before the 
submission of applications for next season. 

When engineering structures are built or other permanent changes 
made to the land, both the OPEKEPE and producers are informed by 
the authorities and bodies which have carried out those changes, so that 
they can be taken into account both in the updating of the LPIS and for 
applications for the current year, so that the correct area is declared. 
There is therefore no risk to the Fund. 

For 2011 applications the database is available, up to date with any 
changes that have been made regarding the eligibility and planning of 
units. 

Note that, as mentioned above, the maintenance of the mapping 
database is done on an annual basis.  Already for the 2012 application 
the satellite images of 2010 used for the remote sensing checks for that 
year are ready to be integrated, and soon the satellite images used for 
the corresponding remote sensing checks for 2011 will be graded and 
evaluated for integration. Furthermore, with the remote sensing checks 
for the years 2010 and 2011, the changes resulting in non-eligible areas 
are also ready to integrate into the new database that will form the basis 
for the 2012 application. 

Romania: (APIA) 

By means of the measures taken under the action plan and the updating 
of LPIS every three years on the basis of new orthophotos, the annual 
updates on the basis of the results of on-the-spot checks and other 
sources providing information on changes in the field, APIA ensures 
that non-agricultural areas are not included in the LPIS reference area. 

32

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Where payments are made unduly, they are recovered using the 
procedures in force. 

Spain: The Action Plan to improve LPIS-GIS updating submitted to 
the Commission includes a methodology for calculating and assigning 
an eligibility coefficient in LPIS-GIS recintos used as pasture land. The 
results obtained in the different Autonomous Communities are being 
analysed with a view to adopting the final decision on introduction of 
the methodology. 

France: Les autorités françaises se sont conformées à la 
réglementation en matière de restructuration de l’industrie sucrière en 
autorisant un fabricant de sucre à modifier la capacité de production de 
l’usine destinée à être complètement démantelée, cette modification 
correspondant à la capacité maximale théorique de production de 
l'ensemble des sites du fabricant, y compris le site litigieux. La 
réglementation ne définit pas la « capacité de production » et n’indique 
pas les règles permettant de la fixer. La réglementation n'indique pas 
davantage que la capacité de production est limitée à la production 
effective passée. La terminologie reprise dans la règlementation 
communautaire confirme qu’il ne saurait s’agir de la production déjà 
atteinte par l’usine qui par essence varie non seulement en fonction du 
potentiel de production mais aussi de facteurs exogènes tels que 
notamment des conditions climatiques. 

France: Voir réponse à la question précédente. 

3.33 

As regards the non-IACS control system for the measure 
‘restructuring of the sugar industry’ in France, the Court 
found the system to be partially effective only (see example 
3.3). 

Example 3.3 

Under an EU restructuring plan sugar producers giving up 
all or part of their quota receive an aid per tonne of sugar 
quota in 2008/2009 renounced ranging from 218,75 euro 
(simple renunciation) to 625 euro (in the case of a full 
dismantling of a production facility). The producer must 
assign the abandoned quota to production facilities up to a 
maximum of the production capacity of those facilities. 10 

33

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

% of the aid must be paid to the growers who as a result 
lose their delivery rights for sugar beet to the sugar 
producer. In France a sugar producer was granted aid for 
dismantling a production facility equivalent to 93 500 
tonnes of quota renounced. However, immediately before 
applying for the aid, the beneficiary had applied for 
upgrading the production capacity of this facility from 72 
000 to 93 500 tonnes and his request had been approved. 
However, the actual production of the plant had never 
exceeded 60 000 tonnes. The increase in capacity was 
artificially created to obtain the higher aid rate of 625 
euros/tonne for a quantity of at least 21 500 tonnes. In 
addition, the 10 % of this aid was paid to growers who had 
never delivered sugar beet to the dismantled facility. 

For some EAFRD projects the administrative checks shall 
include a verification of the compliance of the operation 
with applicable national and EU rules including public 
procurement. The Court found that, in Portugal, the costs 
related to the construction of a dam had been split over 
several contracts which could thus be awarded directly 
instead of being put out to tender. This was not detected by 
the administrative checks. 

3.36 

34

Portugal: See reference II.5. of the national authorities' comments on 
the Court of Auditors' preliminary findings in the 2010 DAS Audit – 
EAFRD (Annex 1). 

Administrative checks on applications for payment for projects under 
Action 1.6.2 under the responsibility of EDIA are carried out by the 
PRODER management authority, on the basis of the relevant 
regulations  laid down by the paying agency, and include compliance 
checking for public procurement procedures relating to the expenses 
submitted by the beneficiary in support of applications for payment for 
projects (at the time the checks were carried out jointly with the paying 
agency). 

For the projects/applications for payment audited, a standard check list 
established by the paying agency indicates that compliance with 
national and Community legislation on public procurement, as covered 
by Article 9 of Directive 2004/18/EC of the European Parliament and 

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

of the Council of 31 March 2004, was checked with regard to the 
division of archaeology work.  

The PRODER managing authority considered the basic information 
submitted by EDIA to be acceptable, as regards analysis of applications 
for payment in the light of the unpredictability and urgency of 
archaeological services.  

In many cases, the urgency in carrying out archaeological work, which 
only became apparent once the project was under way, because of the 
specific nature of events (e.g. archaeological remains buried on site), 
i.e. after the initial impact reduction measures were identified, was 
intended to avoid long stoppages entailing a significant increase in cost.  

The pipes crossed various points of cultural and archaeological interest, 
which at the time of the project were not fully  known. While it was 
possible for the environmental impact study, or the Instituto de Gestão 
do Património Arquitectónico e Arqueológico (IGESPAR), to identify 
some of these points, it was not possible, at that stage, to know the 
number and size of them, the area involved, the richness and 
importance of the findings and the degree of technical rigour required, 
the quantity and quality of the work to be done, and the length of the 
operation. 

The PRODER management team therefore considered, in the specific 
case of archaeological work, that there was no intention to split work 
over several contracts to ensure that the Directive in question did not 
apply. 

Although not directly relevant, it should be noted that the ceiling 
applied to EDIA for the purchase of goods and services was EUR 206 
000 and not EUR 133 300, as stated in point 11 of the report, since 
EDIA is an awarding body as set out in Article 1(2) of DL 18/2008 of 

35

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Example 3.4 

In Bulgaria, Greece, Romania, the Czech Republic and the 
Netherlands the Court re-performed parcel measurements 
carried out by national inspectors. The eligible areas 
reported by the national inspectors were found to be 
incorrect for 13 out of 43 parcels in Bulgaria, 6 out of 32 
parcels in Greece, 12 out of 29 parcels in Romania, 35 out 
of 67 parcels in the Czech Republic and 16 out of 174 
parcels in the Netherlands. However, in the cases examined 
the financial effects were limited. 

36

29 January 2008 (Public Procurement Code - Código dos contratos 
públicos - CCP). The above limit was EUR 206 000 at the date in 
question, in line with Article 20(b) of the CCP (falling to EUR 193 000 
from 1 January 2010, in accordance with Regulation 177/2009). 

Bulgaria: The discrepancies were due to the time lag between the 
measurements and changes to the boundaries of the parcels used by the 
beneficiary. 

Czech Republic: In its audit, the SAO reviewed 10 beneficiaries for 
compliance with the eligibility criteria during 2009. The aim of this 
audit was to verify that the paying agency’s checks on beneficiaries 
were carried out properly. In this review, the SAO identified several 
(35) cases in which the checks carried out by the State Agricultural 
Intervention Fund (SAIF) in 2009 failed to identify the true situation 
regarding the land checked. Nevertheless, with the exception of one 
case, these errors did not affect the amount of the payments made to the 
beneficiaries checked. 

Greece: The classic spot checks are carried out on the basis of reliable 
LPIS data using GPS and with detailed instructions given to the 
auditors. Any deviations relate to isolated cases. 

Romania: (APIA) 

The Agency's analysis of the 12 identified cases indicated that the 
differences detected were the result of the updating of LPIS, the 
manner in which the technical requirements for joint cultivation were 
implemented, the length of time that had passed between the date when 
the images were collected for interpretation by remote sensing and the 
date when the measurements were taken in the field, or of errors made 
by farmers when indicating the boundaries of the parcel in use. The 
process of digitisation of the parcels inside physical blocks began in 

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

2010, when the IPA Online application for the identification of parcels 
in a GIS environment began to be widely used. The farmers selected 
for checks by remote sensing were given priority in this process, so 
practically the parcels of all farmers checked by remote sensing were 
digitised. As a result, checks by remote sensing were carried out earlier, 
took less time and the results were much improved. 

Moreover, through the measures taken under the action plan and the 
updating of LPIS every three years on the basis of new ortho-photos, 
the annual updates on the basis of the results of on-the-spot checks and 
other sources providing information on changes in the field, APIA 
ensures that non-agricultural areas are not included in the LPIS 
reference area. Where payments are made unduly, they are recovered 
using the procedures in force. 

3.39 

3.47 

In EAFRD, the Court found weaknesses in the planning of 
the on-the-spot checks and the analysis of the results. In 
Portugal, for instance, almost all checks (97,5 %) were 
carried out with considerable delays, e.g. 1 or even 2 years 
after the year for which the payment was claimed, which 
makes it harder to detect cases of non-compliance. 

Portugal: As stated in the European Commission's reply (page 85 of 
the Court of Auditors' 2010 Annual Report ), the national authorities 
implemented a substantial set of measures in 2010, which made up for 
the delays in on-the-spot checks for 2008 and 2009 and also enabled 
the checks for 2010 to be carried out.   The European Commission 
monitored the implementation of the on-the-spot checks. 

Whilst the Court’s own re-performance of EAGF area 
inspections carried out in Bulgaria, Romania, Greece and 
the Netherlands (21) showed weaknesses in the quality of 
national inspections, the respective certification bodies 
reported that the quality of inspections was good (22) or at 
least adequate (23). 
21

 See example 3.4. 

22

23

 Greece and Netherlands. 
 Bulgaria and Romania. 

Greece: The classic spot checks are carried out on the basis of reliable 
LPIS data using GPS and with detailed instructions given to the 
auditors.  

They were assessed by the Certification Body, which described the 
quality of the checks as good. 

Romania: (APIA) 

In accordance with Commission Guideline No 5, the Certifying Body 
must validate the quality of on-the-spot checks carried out by paying 

37

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Annex 3.2 

Results of examination of systems for agriculture and 
natural resources 

agencies implementing EAGF and EAFRD for both the IACS and non-
IACS populations. In order to issue the certification report for the 
EAGF and EAFRD financial year, the Certifying Body re-performed 
the on-the-spot checks for both the IACS and non-IACS populations. 
The weaknesses identified were presented in the audit reports sent to 
the European Commission. The financial impact of the weaknesses was 
insignificant. 

As regards the EAGF and EAFRD IACS populations, for 2010 the 
Certifying Body carried out separate audit missions at the final 
beneficiaries of EAGF and EAFRD financial aid, concerning the 
consolidation of the guarantee of the legality and correctness of the 
payments made by the paying agency (APIA),.  Following the 
performance of these checks, APIA's internal control system was 
evaluated as being satisfactory as regards on-the-spot checks. 

Czech Republic: Not applicable – there is no error involved. 

France: Voir Annexe III. 

Germany: Not applicable since the reference reflects the Court's 
assessment. 

Poland: 3.2.2. Assessment of selected supervisory and control systems 
— Rural development 

Column: “Implementation and control of GAEC/Cross-compliance” 

During the financial audit carried out in 2010 by the European 
Agricultural Fund for Rural Development (EAFRD) – Statement of 
Assurance for the budget year 2010 (DAS 2010), certain primary 
management requirements (animal identification and registration) were 
examined in Poland, where some irregularities were detected. 

38

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

All cross-compliance requirements relating to animal identification and 
registration, listed in Annex II to Council Regulation (EC) No 73/2009 
of 19 January 2009 establishing common rules for direct support 
schemes for farmers under the common agricultural policy and 
establishing certain support schemes for farmers, amending 
Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) 
No 378/2007 and repealing Regulation (EC) No 1782/2003, have been 
correctly implemented and are monitored as part of that scheme. This 
relates mainly to the requirement to keep an up-to-date cattle register 
and pigs register, and to notify any events concerning cattle on time. 

Events concerning movements of pigs are not monitored under the 
cross-compliance control system, since the EC rules applicable in that 
respect do not impose any obligation on the farmers to record 
movements of pigs in the central register of farms (in Poland – the 
Central Database of the AIR System), or for any such movements to be 
notified timely to the said register by the owners of the animals. 
Therefore, the requirement to notify the paying agency by the owner of 
the animals within 30 days of any events concerning pigs (set forth in 
the Act of 2 April 2004 on the Animal Identification and Registration 
System) and the obligation to monitor compliance with the 
abovementioned requirement by the audit authority, was not included 
in the Regulation of the Minister of Agriculture and Rural 
Development of 25 March 2009 as regards the number of points given 
for any detected non-compliance, and the percentage reduction in the 
direct payment, sugar payment or tomato payment, nor was it included 
in the form of the report on cross-compliance control as regards animal 
identification and registration and, consequently, is not subject to 
verification during such control. Therefore, one cannot regard as non-
compliance the fact that events concerning pigs are not being notified, 

39

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

as ascertained during the on-the-spot inspection. 

On the other hand, the irregularities regarding the maintenance of the 
cattle register, the pigs register and notification of any events 
concerning cattle, detected during the inspection, were assigned point 
scores in accordance with the rules set out in the Regulation of the 
Minister of Agriculture and Rural Development of 25 March 2009 as 
regards the number of points given for any detected non-compliance, 
and the percentage reduction in the direct payment, sugar payment or 
tomato payment. 

Portugal: In the light of the aspects assessed by the Court of Auditors, 
we wish to make the following points:  

Administrative controls - See references II.5. and II.9. of the national 
authorities' comments on the ECA's preliminary findings in the 2010 
DAS Audit – EAFRD (Annex 1). 

On-the-spot checks - See references II.1, II.2, II.3, II.4 and II.6. of the 
national authorities' comments on the ECA's preliminary findings in the 
2010 DAS Audit – EAFRD (Annex 1). 

Cross-compliance - See references II.7. and II.8. of the national 
authorities' comments on the ECA's preliminary findings in the 2010 
DAS Audit – EAFRD (Annex 1). 

Romania: (APDRP) 

The continuous improvement of the control system is ensured by the 
periodical updating of working procedures in line with legislative 
amendments, recommendations by the European Commission, the 
European Court of Auditors, the Romanian Court of Auditors, and 
amendments of the National Rural Development Programme (for 
example: the introduction at the project eligibility verification stage of 

40

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

a new item for verification relating to the applicant's creation of 
artificial conditions in order to obtain payments and advantages). 

Spain: The Action Plan to improve LPIS-GIS updating submitted to 
the Commission includes a methodology for calculating and assigning 
an eligibility coefficient in LPIS-GIS recintos used as pasture land. The 
results obtained in the different Autonomous Communities are being 
analysed with a view to adopting the final decision on introduction of 
the methodology. 

Annex 3.2.1 

Annex 3.2.2 

Annex 3.3 

Assessment of selected supervisory and control systems 
(IACS) - EAGF 

UK: RPA: The specific observations made during the mission to Wales 
are dealt with in Annex II. 

Assessment of selected supervisory and control systems 
Rural Development 

UK: RPA: The specific observations made during the mission to 
Scotland are dealt with in Annex II. 

Results of review of commission management 
representations for agriculture and natural resources 

Germany: Not applicable since the reference reflects the content of GD 
MARE's management statement. 

Portugal: In response to the deficiencies detected by DG AGRI, 
Portugal implemented an action plan in 2010 for on-the-spot checks, 
which made up for the delays in on-the-spot inspections for 2008 and 
2009 and enabled checks for 2010 to be conducted conducted in 2010. 

With a view to updating the Land use Register, Portugal also 
implemented an LPIS-GIS action plan designed to ensure the reliability 
of the information in that system. 

Both Action Plans were monitored by DG AGRI. 

UK: RPA: DG MARE dropped its reservation for the UK. 

Annex 4.2 

Assessment of selected supervisory and control systems : 

France: Méthodologie d’audit (liste de contrôles)  

CHAPTER 4 - COHESION 

41

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Audit authorities (AA) – compliance with key regulatory 
requirements and effectiveness in ensuring the regularity of 
operations 

Il est rappelé que comme l’Etat membre (France) l’a indiqué dans sa 
réponse en date du 01/06/2011, les listes des contrôles relatives aux 
contrôles d’opérations ont été complétées et ont fait l’objet d’une 
diffusion aux entités responsables de l’exécution des contrôles 
(janvier 2011).  La Commission européenne (DG REGIO) n’a pas 
communiqué à l’Etat membre sa validation finale mais avait indiqué 
initialement que la défaillance identifiée par la Cour dans son 
évaluation n’avait pas d’impact. Sur les autres points de contrôle en 
cause dans l’évaluation faite par la Cour, la Commission (DG 
REGIO), dans le cadre de la procédure contradictoire, avait indiqué 
qu’elle partageait l’avis de l’Etat membre (France/CICC notamment  
sur la question du contrôle de l’ingénierie financière) sur la 
méthodologie proposée par la CICC, un contrôle régulier, au fur et à 
mesure de l’exécution. 

Méthodologie d’échantillonnage  

En ce qui concerne la méthode d’échantillonnage pour la sélection des 
opérations devant faire objet d’un contrôle que la Cour recommande, 
celle-ci n’est qu’une note d’orientation du comité de coordination des 
fonds (COCOF). 

Germany: See Part II 

Poland: The table shows that as regards Cohesion, Energy and 
Transport, the supervisory and control systems in Poland are 
effective. There was no need to take any action. 

Spain: Comments of 15 June 2011. In addition, a letter was sent to 
DG REGIO on 16 November 2011 on the Autonomous Community 
of Valencia. 

The following actions have been taken in 2011 concerning the ESF: 

42

 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Coordination has been stepped up between the ESF Audit Authorities 
(the Spanish State Auditing Agency and the Autonomous Community 
audit authorities) within the General Coordination Committee set up 
to carry out the functions assigned to the audit authority under 
Community rules. 

Direct communication between the various ESF audit authorities and 
the European Commission's audit unit has been stepped up in order to 
address the specific issues that have arisen in each of the Operational 
Programmes with reference to the annual control report. 

The European Commission has drawn up a "Guide for treatment of 
errors notified in the Annual Control Report (final version of 7 
December 2011) which addresses various issues such as the 
calculation and treatment of errors relating to the sampling 
methodology generally used in Spain and the Monetary Unit 
Sampling system. 

All this will be included in the annual control reports to be submitted 
by the audit authorities by 31 December 2011, in compliance with 
Article 62(1)(d)(i) and (ii) of Regulation (EC) No 1083/2006. 

The Andalusian Public Accounts Department has submitted the 
following comments on actions taken on 1 March 2011: 

Delays in the performance of audits of systems and projects: The 
Andalusian Public Accounts Department, the body which collaborates 
with the Audit Authority in the OP ERDF Andalusia 2007/2013 and 
the Audit Authority in the OP ESF Andalusia 2007/2013, is rectifying 
the delays in carrying out the audits of operations by starting work at 
the time the control sample is obtained. This makes it possible to 
make a more in-depth review of the draft reports and carry out quality 
controls of the final reports so as to obtain reasonable and sufficient 

43

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

guarantees in order to correct any errors made during the audits. 

Insufficient checklists: The checklists are approved by the General 
Coordination Committee, made up of all the Spanish audit authorities 
and control bodies. These lists are being reviewed by the working 
party set up within the General Coordination Committee to implement 
the Court of Auditors' comments. 

CHAPTER 6 – RESEARCH AND OTHER INTERNAL POLICIES 

Annex 6.2 

Assessment of selected supervisory and control systems 

Austria: The controls of the Österreichischen Austauschdienstes 
(OEAD) [Austrian Academic Exchange Service] were described as 
effective by the Commission.  

Belgium: N/A 

France: La Commission a été destinataire de toutes nos réponses à la 
Cour des comptes européenne à la suite de son audit de novembre 
2010 (courriel du 8/7/2011). Cette dernière a maintenu ses 
constatations sur les contrôles secondaires de la France (4/8/2011) et, 
dans la foulée, l’autorité nationale a adapté sa démarche, chaque fois 
qu’elle était en mesure de le faire : 

Autorité nationale - Exigence principale n°1 – Définition, répartition 
et séparation des fonctions 

1/ Le document régissant la relation entre l’autorité nationale et 
l’agence nationale ne décrit pas le système de contrôles secondaires : 
aucune révision, lourde et complexe par nature, de la convention 
constitutive du GIP « Agence 2E2F » n’est nécessaire pour permettre 

44

 
 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

la réalisation, dans des conditions satisfaisantes, des contrôles 
secondaires et des surcontrôles (c’est le rôle de l’Inspection Générale 
de l'Administration de l'Education Nationale et de la Recherche,  
IGAENR), hors audit financier (c’est le rôle d’un cabinet d’audit 
externe) ; la Commission européenne vient d’ailleurs d’abandonner 
cette recommandation dans son évaluation de la DoA 2010 de la 
France. 

2/ Non supervision du cabinet d’audit externe en charge du contrôle 
financier (certification des comptes) par l’autorité nationale : bien que 
le souhait de l’autorité nationale de voir l’IGAENR – dont la mission 
centrale en matière de contrôles secondaires est dûment établie dans 
la DoA ex-ante de la France – vérifier et prendre en compte la 
certification globale des comptes à partir de 2010 n’ait pas été suivie 
d’effet (l’IGAENR ayant décliné cette mission supplémentaire pour 
des raisons d’organisation interne), le nécessaire a été fait pour 
maintenir la cohérence de la piste d’audit : pour ce faire, le 
commissaire aux comptes a été invité à formuler aussi des 
recommandations (DoA 2010) ; celles que l’autorité nationale aura 
retenues feront l’objet d’un suivi de la part de l’IGAENR (DoA 
2011) ; par ailleurs, le commissaire aux comptes devra procéder au 
contrôle systématique de l’intégralité des données financières du 
rapport annuel de l’agence (DoA 2011). Ces dispositions sont autant 
de modifications introduites dans le cahier des charges de l’auditeur 
externe à l’initiative de l’autorité nationale. 

3/ Approche méthodologique applicable aux contrôles secondaires : 
bien que l’autorité nationale ne souhaite pas changer 

45

 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

fondamentalement son approche pour ne pas risquer de déstabiliser la 
chaîne de contrôle et d’audit mise en place en 2007 et consolidée 
depuis, elle a demandé à l’IGAENR (lettre de mission du 31/10/2011 
en vue de la DoA 2011) de décrire, dès son rapport sur l’exercice 
2011, la méthodologie des contrôles qu’elle aura utilisée ; s’agissant 
plus particulièrement du contrôle des bénéficiaires (contrôles 
secondaires sur les contrôles primaires), l’autorité nationale a précisé 
ses attentes de la manière suivante : l’IGAENR devra réaliser un bilan 
complet des contrôles effectués par l’agence, puis faire porter ses 
surcontrôles sur une partie des subventions accordées au cours de 
l’année écoulée ; l’échantillon représentatif  à analyser devra être à la 
fois diversifié (projets de toute dimension et de toute nature) et 
pertinent au regard des taux de correction financière supérieurs à 2% 
relevés antérieurement. 

Autorité nationale - Exigence principale n°2 – Contrôles secondaires 

1/ Absence de relation contractuelle entre l’autorité nationale et 
l’auditeur externe (commissaire aux comptes) : le fait que l’agence 
soit chargée de l’appel d’offres permettant le choix du commissaire 
aux comptes et contractualise avec lui (ce que l’autorité nationale ne 
peut pas faire) ne constitue pas une source de conflit d’intérêts pour 
l’autorité nationale (cette procédure est déjà à l’œuvre dans les 
universités françaises) qui exerce, de toute façon, comme on l’a vu 
plus haut, son droit de regard sur le cahier des charges de l’auditeur et 
utilise avec discernement les résultats des contrôles lors de 
l’élaboration des DoA ; plus généralement, la fiabilité des travaux du 
commissaire aux comptes tient au fait qu’ils obéissent à des normes 
internationales qui ne lui sont dictées ni par l’autorité nationale ni par 

46

 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

l’agence qui passe commande. 

2/ Contrôles relatifs au rapport annuel de l’agence nationale : 
l’autorité nationale estime que tout contrôle systématique et 
formaliste de la fiabilité des données du rapport annuel de l’agence 
par l’autorité nationale serait d’autant moins opportun qu’il 
entraînerait un allongement de la durée des audits (d’un mois environ, 
ce qui obligerait à décaler un peu plus dans le temps la remise déjà 
tardive de la DoA) et un accroissement de leur coût ; néanmoins, 
l’autorité nationale continue à demander à l’IGAENR de faire reposer 
ses surcontrôles sur le rapport annuel de l’agence et confie au 
commissaire aux comptes la tâche nouvelle, comme on l’a vu plus 
haut, de réviser l’ensemble des données financières de ce même 
rapport. 

3/ Risque de conflit d’intérêts : le risque mentionné par la Cour des 
comptes n’existe plus depuis la fin de l’année 2009, le cabinet en 
charge de la certification des comptes ayant été dessaisi de la 
réalisation des contrôles primaires externalisés par l’agence. 

4/ Etalement des contrôles secondaires sur l’année : la pratique du 
« contrôle en continu » n’étant pas compatible avec le mode de 
fonctionnement de l’IGAENR, cette modalité de mise en œuvre des 
contrôles secondaires n’est pas envisageable. 

5/ Présentation tardive de la DoA à la Commission européenne : le 
temps nécessaire à la réalisation des contrôles et des surcontrôles et à 

47

 
 
 
 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

leur exploitation ainsi que les contraintes organisationnelles et 
humaines auxquelles l’autorité nationale est confrontée ne permettent 
guère d’envisager une réduction importante du retard avec lequel, de 
manière récurrente, la DoA est transmise à la Commission 
européenne (cette situation n’est d’ailleurs pas spécifique à la France). 
Face à la lourdeur de la chaîne de contrôle et d’audit dont la 
rationalisation a longtemps été réclamée en vain, l’autorité nationale a 
toujours fait passer la qualité des contrôles avant le respect de la date 
de présentation.  

Enfin, on rappellera que la Cour fonde ses constatations 
principalement sur deux textes qui n’ont pas la force juridique de la 
base légale du programme Education et Formation Tout au Long de la 
Vie (EFTLV) : la décision C(2007)1807 de la Commission du 
26/04/2007 et les Orientations à l’intention des autorités nationales 
(mises à jour chaque année par la Commission), ces dernières n’ayant 
en aucun cas le caractère contraignant que leur prête la Cour. 

Germany: Not applicable 

Poland: The audits carried out by ECA as regards the implementation 
of the Lifelong Learning Programme showed that the primary controls 
implemented by the National Agency for the Programme, i.e. the 
Education System Development Foundation, are effective and 
efficient. The National Agency complies with the Commission’s 
requirements regarding the supervision over the beneficiaries of the 
programme.  

At the same time, the ECA audit showed a partial effectiveness as 
regards secondary controls, i.e. the controls exercised by the National 
Authorities of the Programme (the Ministry of National Education 

48

 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

and the Ministry of Science and Higher Education). 

In light of the above, the National Authorities took the following 
actions aimed at improving the situation within the scope described 
above: 

the auditor selected pursuant to the public procurement procedure 
carried out an audit of the annual report of the National Agency on the 
implementation of the programme in 2010 and carried out an 
examination of the management systems applicable at the National 
Agency, including the primary control procedure, along with the 
verification of the audits of the beneficiaries that had been carried out. 
The report on the implementation of the above task was an integral 
annex to the Statement of Assurance submitted to the Commission 
annually. The Commission approved the document submitted in 2011. 
The above audit had been carried out in accordance with the rules and 
within the scope specified in the Detailed Guidelines for National 
Authorities, published by the Commission; during the audit, particular 
attention was given to the recommendations and suggestions 
communicated by the Commission after the evaluation of the 
Statement of Assurance submitted in 2010; 

in addition, in order to strengthen the supervision of the programme, 
the National Authorities commissioned an external auditor to audit the 
implementation of the Comenius Programme (sectoral scheme under 
the Lifelong Learning Programme) in 2010-2011. The scope of the 
audit included the procedures and systems applicable during the 
implementation of the programme (in accordance with the 
Commission’s guidelines). During the audit, particular emphasis was 
placed on the primary controls, including inspections of the 
programme beneficiaries, carried out directly by the auditor; 

49

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

in order to enhance the secondary controls, the representatives of the 
National Authority participate in the inspections of the programme 
beneficiaries carried out by the employees of the National Agencies 
as observers (accompanied visits); 

in September 2011, the National Authorities of the programme 
prepared general guidelines regarding the secondary control 
procedure for the Lifelong Learning Programme. These guidelines are 
being prepared on the basis of Commission Decision of 26 April 2007 
on the mutual obligations of the Member States, the Commission and 
national agencies in the implementation of the Lifelong Learning 
Programme for 2007-2013. Those guidelines set out, amongst others, 
the basis for the control system relating to the operation of the 
programme, the rules and procedures regarding the actions taken as 
part of secondary control and the entities carrying out the secondary 
control, the scope and degree of detail of the actions taken as part of 
the secondary control, the significance and scope of the statement of 
assurance. 

Spain: There were no observations. 

Sweden: Manual to be updated in spring of 2012. 

Diagram I 

Budget 2010 – Estimated revenue and final appropriations 
for payments 

Austria: No comments, as the chart breaks down 2010 estimated 
revenue by Member State only. 

ANNEX I 

Belgium: N/A 

Czech Republic: Not applicable – there is no error involved. 

France: N/A 

Germany: Not applicable since the reference does not contain any 

50

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Diagram V 

Own resources in 2010, by Member State 

objection by the Court. 

Hungary: This part did not require any measure by Hungary. 

Poland: The diagram relates to  information regarding general budget 
revenues and expenditures and does not contain any reservations in 
relation to Poland 

Spain: There were no observations. 

Sweden: The Court of Auditors has made no observations giving rise 
to comments from Sweden. 

Austria: No comments, as the chart breaks down 2010 own resources 
by Member State only. 

Belgium: N/A 

Czech Republic: Not applicable – there is no error involved. 

France: N/A 

Germany: Not applicable since the reference does not contain any 
objection by the Court. 

Hungary: This part did not require any measure by Hungary. 

Poland: The diagram relates to information regarding general budget 
own resources, divided into individual Member States, and does not 
contain any reservations in relation to Poland 

Spain: There were no observations. 

Sweden: The Court of Auditors has made no observations giving rise 
to comments from Sweden. 

Diagram VI 

Payment made in 2010, in each Member State 

Austria: No comments, as the chart breaks down 2010 payments by 

51

 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

Member State only. 

Belgium: N/A 

Czech Republic: Not applicable – there is no error involved. 

France: N/A 

Germany: Not applicable since the reference does not contain any 
objection by the Court. 

Hungary: This part did not require any measure by Hungary. 

Luxembourg: Observation générale sur la catégorie des dépenses 
administratives : Lettre officielle envoyée à la Cour des comptes 
européenne manifestant notre désaccord sur la présentation de cette 
catégorie qui était différente dans le passé. 

Poland: The diagram relates to payments from the general budget in 
individual Member States and does not contain any reservations in 
relation to Poland 

Spain: There were no observations. 

Sweden: The Court of Auditors has made no observations giving rise 
to comments from Sweden. 

CHAPTER 7 – ADMINISTRATIVE AND OTHER EXPENDITURE 

7.19 

The convention for the construction of the Residence Palace 
Building in Brussels, signed with the Belgian State in 2008 
for planned completion in 2013 and for a total estimated cost 
of 310 million euro (estimated prices 2013), provides for the 
possibility of making advance payments. In the period 2008-
2010, the Council made advance payments totalling 235 
million euro, of which 30 million euro were included in the 

52

Belgium: SPF Budget : Le Conseil a répondu à cette remarque  

 
 
 
ANNEX I. Paragraphs in the 2010 Annual Report and for each of the 2010 findings made by the Court referring to each 
particular country 

Paragraph 

Observation in the 2010 Annual Report 

Member State reply 

7.20 

budget line for the acquisition of buildings in the Council’s 
initial budget. The additional funds of 205 million euro (i.e. 
87 % of the total funds paid in advance) came from 
budgetary transfers made at the end of each year from 2007 
to 2010 (mostly from budget lines for interpretation costs 
and delegations’ travel expenses). 

The repeated under-utilisation of these budget lines 
throughout the 2008-2010 period and the size of the amounts 
transferred with respect to total advance payments made 
does not comply with the principle of budget accuracy. In 
addition, the payment in the first 3 years of 235 million euro 
out of the convention’s total value of 310 million euro did 
not match payments to the progress of the building work. 

Belgium: SPF Budget : Le Conseil a répondu à cette remarque  

53

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

AGRICULTURE and RURAL DEVELOPMENT CHAPTER 

(1) In the area of agriculture and rural development, the Court of Auditors has put forward several recommendations for further improving the 
related  management  and  control  systems  (§3.58-3.59).  Since  the  common  agricultural  policy  is  implemented  under  shared  management, 
Member States have a role to play in this endeavour.  

Has  your  Member  State recently  taken  any  relevant  initiative  to  further  improve  the  management  and  control  systems  for  agricultural 
expenditure and to enhance the effectiveness of the checks carried out, notably in the area of rural development? 

COHESION, ENERGY and TRANSPORT CHAPTER 

 (2) In the Cohesion chapter (§4.25), the Court considers that sufficient information was available for the Member State authorities to have 
detected and corrected at least some of the errors (prior to certifying the expenditure to the Commission) for 58% of the transaction affected 
by error. 

In your opinion, what can be done to improve the situation? 

(a) 

 reinforce guidance to beneficiaries to prevent irregularities from occurring 

(b) 

 reinforce documentary checks on claims submitted by beneficiaries 

(c) 

 increase on-the-spot verifications on operations before certification 

(d) 

 any other suggestions 

54

 
 
 
 
 
(3) In the Cohesion chapter (§4.28) the Court found that wholly ineligible projects "account for 14% of all quantifiable errors and make up 
approximately 35% of the estimated error rate". 

In your opinion, what can be done to improve the situation? 

(a) 

 more training for staff in national/regional/managing authorities and intermediate bodies  

(b) 

 training which specifically targets national/regional authority staff and beneficiaries   

(c) 

 more detailed guidelines be provided to Member States by the Commission 

(d) 

 any other suggestions 

(4) In the Cohesion chapter (§4.20 & §4.29) the Court noted that for Cohesion expenditure the main risk to regularity is that beneficiaries 
declare ineligible costs. If this is not detected by the different layers of control in the Member State, it leads to an incorrect certification of 
expenditure by the Member State. If not corrected by the Commission at the latest at the end of the programming period, this results in an 
overpayment from the EU budget to the OP concerned. Furthermore, the Court found that various ineligible costs "account for 59% of all 
quantifiable errors and make up approximately 33% of the estimated error rate". 

What does the Member State do in order to avoid the risk that ineligible expenditure is declared by beneficiaries? 

(a) 

 guidance and training at the level of beneficiaries 

(b) 

 reinforced controls and audits on the spot 

(c) 

 simplification of rules 

(d) 

 common checklists used by managing authorities 

(e) 

 any other suggestions 

55

 
 
 
 
(5)  In  the  Cohesion  chapter (§4.26)  the  Court  noted  that  serious  failures  to  respect  EU  and  national  public  procurement  rules  "account for 
24% of all quantifiable errors and make up approximately 22% of the estimated error rate". 

In your opinion, what can be done to improve this situation? 

(a) 

 more training for staff of national/regional/managing authorities and  intermediate bodies 

(b) 

 more training to be provided for beneficiaries 

(c) 

 more guidelines to be provided to Member States by the Commission 

(d) 

 any other suggestions 

(6) In the Cohesion chapter (§4.40) the Court's audit highlighted several weaknesses concerning Audit Authorities- AAs. 

Which of the following would you consider as most effective in order to overcome these weaknesses? 

(a) 

 detailed checklists which cover all risks to the regularity of expenditure 

 specific guidance by the Commission on the scope of verifications and the extent of checks to be undertaken for the audit of projects 

(b) 
           and the reporting of audit findings 

(c) 

 the use of  standard sampling methodology 

(d) 

 additional staff resources 

(e) 

 re-structuring of training for audit authorities 

(f) 

 any other suggestions 

56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIMPLIFICATION 

(7) Has your Member State introduced any initiatives addressed at simplifying the implementation of EU programmes during the current 
programming period (2007-2013)? 

Yes 

No 

(a) In which areas do you see the greatest potential for simplification: in Commission rules (EU rules) or your own rules (Member State 
rules)? 

(b)  For  the  new  programming  period  the  Commission  is  extending  the  possibility  of  using  lump  sums  or  flat  rates.  Do  you  see  your 
Member State  making use of lump sums and flat rates ? 

(1) 

 No   

(2) 

 Yes, but minimal use 

(3) 

 Yes, extensive or exclusive use 

57

 
 
 
 
 
  
 
 
 
 
 
 
 
MEMBER 
STATE 

AGRICULTURE and 
NATURAL 
RESOURCES 
CHAPTER 

COHESION, ENERGY and TRANSPORT CHAPTER 

SIMPLIFICATION  

QUESTION 1 

QUESTION 2 

QUESTION 3 

QUESTION 4 

QUESTION 5 

QUESTION 6 

QUESTION 7 

QUESTION 7a 

QUESTION 7b 

In the Cohesion chapter 
(§4.26) the Court noted that 
serious failures to respect EU 
and national public 
procurement rules "account 
for 24% of all quantifiable 
errors and make up 
approximately 22% of the 
estimated error rate". 

in the Cohesion 
chapter (§4.40) the 
Court's audit 
highlighted several 
weaknesses 
concerning Audit 
Authorities- AAs. 

In which areas do 
you see the 
greatest potential 
for simplification: 
in Commission 
rules (EU rules) 
or your own rules 
(Member State 
rules)? 

For the new 
programming period 
the Commission is 
extending the 
possibility of using 
lump sums or flat 
rates. Do you see your 
Member State  making 
use of lump sums and 
flat rates ? 

Has your 
Member State 
introduced any 
initiatives 
addressed at 
simplifying the 
implementation 
of EU 
programmes 
during the 
current 
programming 
period (2007-
2013)? 

In the Cohesion chapter 
(§4.28) the Court found that 
wholly ineligible projects 
"account for 14% of all 
quantifiable errors and make 
up approximately 35% of the 
estimated error rate". 

In the Cohesion chapter 
(§4.25), the Commission 
considers that sufficient 
information was available 
for the Member State 
authorities to have 
detected and corrected at 
least some of the errors 
(prior to certifying the 
expenditure to the 
Commission) for 58% of 
the transaction affected 
by error. 

In the area of 
agriculture and rural 
development, the 
Court of Auditors 
has put forward 
several 
recommendations 
for further improving 
the related 
management and 
control systems 
(§3.58-3.59). Since 
the common 
agricultural policy is 
implemented under 
shared management, 
Member States have 
a role to play in this 
endeavour. 

In the Cohesion 
chapter (§4.20 & 
§4.29) the Court 
noted that for 
Cohesion 
expenditure the 
main risk to 
regularity is that 
beneficiaries 
declare ineligible 
costs. If this is not 
detected by the 
different layers of 
control in the 
Member State, it 
leads to an 
incorrect 
certification of 
expenditure by the 
Member State. If not 
corrected by the 
Commission at the 
latest at the end of 
the programming 
period, this results 
in an overpayment 
from the EU budget 
to the OP 
concerned. 
Furthermore, the 
Court found that 
various ineligible 
costs "account for 
59% of all 
quantifiable errors 
and make up 
approximately 33% 
of the estimated 
error rate". 

Has your Member 
State recently taken 
any relevant 
initiative to further 
improve the 
management and 
control systems for 

In your opinion, what can 
be done to improve the 
situation? 
(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from 
occurring 

In your opinion, what can be 
done to improve the 
situation? 
(a) more training for staff in 
national/regional/managing 
authorities and intermediate 
bodies  

What does the 
Member State do in 
order to avoid the 
risk that ineligible 
expenditure is 
declared by 
beneficiaries? 

In your opinion, what can be 
done to improve this 
situation? 
(a) more training for staff of 
national/regional/managing 
authorities and  intermediate 
bodies 

Which of the 
following would you 
consider as most 
effective in order to 
overcome these 
weaknesses? 
(a) detailed 

 YES/NO 

(1) No   
(2) Yes, but minimal 
use 
(3) Yes, extensive or 
exclusive use 

58

 
 
 
 
  
agricultural 
expenditure and to 
enhance the 
effectiveness of the 
checks carried out, 
notably in the area 
of rural 
development? YES 
(If yes, please 
provide some 
examples)/NO       

(b) reinforce documentary 
checks on claims 
submitted by 
beneficiaries 
(c) increase on-the-spot 
verifications on 
operations before 
certification 
(d) any other suggestions 

(b) training which specifically 
targets national/regional 
authority staff and 
beneficiaries   
(c) more detailed guidelines 
be provided to Member 
States by the Commission 
(d) any other suggestions 

(b) training to be provided for  
national/regional authority 
staff and beneficiaries 
(c) more guidelines to be 
provided to Member States 
by the Commission 
(d) any other suggestions 

(a) guidance and 
training at the level 
of beneficiaries 
(b) reinforced 
controls and audits 
on the spot 
(c) simplification of 
rules 
(d) common 
checklists used by 
managing 
authorities 
(e) any other 
suggestions 

Austria 

YES -  Measures to 
ensure that the control 
statistics under Article 84 
of Regulation (EC) No 
1122/2009 and Article 34 
of Regulation (EC) 
1975/2006 are complete, 
correct and accurate.  
- Compulsory digital 
identification of declared 
areas.  

Belgium 

NON - FEDER Région 
de Bruxelles-Capitale 

(a)  reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(c)  increase on-the-spot 
verifications on operations 
before certification 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies 
(c) more detailed guidelines be 
provided to Member States by the 
Commission 

(a) 1 guidance and 
training at the level of 
beneficiaries 
(b) 1 reinforced controls 
and audits on the spot by 
managing authority and 
certifying authority 
(c) 1 simplification of 
rules, where appropriate 

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies  
(b) more training to be provided for 
beneficiaries 
(c) more guidelines to be provided to 
Member States by the Commission 

 (a) donner davantage de 
conseils aux bénéficiaires en 
vue d'empêcher la 
survenance d'irrégularités 
                 XInspection des 
Finances 
                 XFEDER Région 
wallonne  
                 XFSE Région 
wallonne : Ces conseils 
personnalisés devraient être 
donnés avant le dépôt du 
premier dossier de solde 
financier d’une      
programmation, ce qui est 
difficilement réalisable vu les 
exigences liées à la clôture 
de la programmation 
précédente. (Les autres 
réponses peuvent également 
être cochées mais ne 
signifient en rien qu’aucune 
mesure n’est prise en la 
matière visée par la question 
générale) 

(a) offrir davantage de formations 
au personnel des services 
gestionnaires/nationaux/régionaux 
et des organes intermédiaires 
                 XInspection des 
Finances (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
                 XFEDER Région 
wallonne (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
(b) offrir des formations ciblant de 
manière spécifique le personnel 
des services responsables 
nationaux/régionaux et les 
bénéficiaires 
                 XInspection des 
Finances (Ces réponses positives 

(a) conseils et 
formation au niveau 
des bénéficiaires 
               XInspection 
des Finances (Ces 
réponses positives ne 
doivent pas être 
considérées comme 
indiquant le fait qu’il 
n’existe déjà pas 
d’effort en la matière 
mais comme une 
amélioration possible.) 
               XFEDER 
Région wallonne (Ces 
réponses positives ne 
doivent pas être 
considérées comme 
indiquant le fait qu’il 
n’existe déjà pas 
d’effort en la matière 
mais comme une 
amélioration possible.) 
               XFSE Région 
de Bruxelles-Capitale  

(a) offrir davantage de formations 
au personnel des services 
gestionnaires/nationaux/régionaux 
et des organes intermédiaires 
               XInspection des 
Finances (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
               XFEDER Région 
wallonne (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
               XFSE Région de 
Bruxelles-Capitale  
               XFEDER Région de 
Bruxelles-Capitale  
               XFSE Région flamande  
(b) offrir davantage de formations 
aux bénéficiaires 

59

checklists which 
cover all risks to the 
regularity of 
expenditure 
(b) specific guidance 
by the Commission 
on the scope of 
verifications and the 
extent of checks to 
be undertaken for the 
audit of projects and 
the reporting of audit 
findings 
(c) the use of  
standard sampling 
methodology 
(d) additional staff 
resources 
(e) re-structuring of 
training for audit 
authorities 
(f) any other 
suggestions 

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings  
(d) additional staff 
resources 

(a) listes de contrôle 
détaillées couvrant tous 
les risques d'irrégularité 
en ce qui concerne les 
dépenses 
              XInspection des 
Finances (Ces réponses 
positives ne doivent pas 
être considérées comme 
indiquant le fait qu’il 
n’existe déjà pas d’effort 
en la matière mais 
comme une amélioration 
possible.) 
              XFEDER 
Région Bruxelles-
Capitale  
(b) conseils spécifiques 
prodigués par la 
Commission concernant 
la portée des 
vérifications et l'étendue 
des contrôles à effectuer 
dans le cadre de l'audit 
des projets et rapport 

YES 

(3) Yes, extensive or 
exclusive use - with the 
comment: in particular ESF, 
in part also ERDF 

It would be desirable 
to have more precise 
instructions from the 
Commission 
regarding eligibility for 
funding and the 
requirements 
applicable to the 
managing authority 
and certifying 
authority. 

OUI - Inspection 
des Finances  
             FEDER 
Région wallonne 
             FEDER 
Région flamande 
: Introducing flat 
rate indirect 
costs, electronic 
entering and 
processing of 
payment claims 
of beneficiaries 
(digital counter) 
            FSE 
Région flamande 
            FEDER 
Région de 
Bruxelles-
Capitale                   
NON - FSE 
Région de 
Bruxelles-
Capitale  

FEDER Région 
wallonne : Les 
projets générateurs 
de recettes : taux 
forfaitaire 
raisonnable, 
l’extension des 
coûts simplifiés, etc.
FSE Région 
wallonne : frais de 
personnel et coûts 
de formation 
FSE Région de 
Bruxelles-Capitale : 
Les règles de la 
Commission et dans 
les possibilités 
d’actions, veiller à 
ce que les règles 
données aux 
bénéficiaires soient 
claires et 
ininterprétables. 
FEDER Région de 
Bruxelles-Capitale : 

(2) Oui, mais de manière 
minimale 
               XFEDER Région 
flamande ( ERDF projects 
are less suitable for the 
use of standard costs and 
lump sums ) 
(3) Oui, de manière 
importante ou exclusive 
               XInspection des 
Finances  (Ces réponses 
positives ne doivent pas 
être considérées comme 
indiquant le fait qu’il 
n’existe déjà pas d’effort 
en la matière mais comme 
une amélioration 
possible.) 
               XFEDER Région 
wallonne  
               XFSE Région de 
Bruxelles-Capitale   
               XFEDER Région 
de Bruxelles-Capitale  
               XFSE Région 

 
 
flamande : ESF VL is 
applying this this already 
in the program 2007-2013 

  FSE Région wallonne : 
Dans la mesure où les 
règles européennes ne 
laissent pas de possibilité 
d’interprétation (tout 
auditeurs confondus) 

Les règles et les 
orientations de la 
Commission 
données aux 
différentes autorités.
FEDER Région 
flamande : EU 
legislation (our own 
(complementary) 
legislation is largely 
based on the need 
to meet the 
requirements of the 
EC and the 
recommendations 
resulting from the 
system audits) 
FSE Région 
flamande :  Both 
regulations 

                 XFSE Région de 
Bruxelles-Capitale  
                 XFEDER Région 
de Bruxelles-Capitale  
                 XFSE Région 
flamande  
(b) renforcer les contrôles 
documentaires des 
déclarations soumises par les 
bénéficiaires 
                  XFSE Région de 
Bruxelles-Capitale  
(d) autres suggestions 
                  XInspection des 
Finances : Simplifier les 
règles d’éligibilités 
                  XFEDER Région 
flamande : Simplifier les 
règles d’éligibilités 
                  XFEDER Région 
de Bruxelles-Capitale : 
Simplifier les règles 
d’éligibilités 

ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
                 XFEDER Région 
wallonne (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
                 XFSE Région flamande 
(c) prévoir la mise à disposition, 
par la Commission, de lignes 
directrices plus détaillées à 
l'intention des États membres 
                 XInspection des 
Finances  (Ces réponses 
positives ne doivent pas être 
considérées comme indiquant le 
fait qu’il n’existe déjà pas d’effort 
en la matière mais comme une 
amélioration possible.) 
                 XFEDER Région 
wallonne (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
                 XFSE Région de 
Bruxelles-Capitale  
                 XFEDER Région de 
Bruxelles-Capitale  
                 XFEDER Région 
flamande  
                 XFSE Région flamande 
(d) autres suggestions 
                 XFSE Région flamande 
: Simplifier les règles Européens 
d’éligibilités 

               XInspection des 
Finances (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
               XFEDER Région 
wallonne (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
               XFSE Région de 
Bruxelles-Capitale  
               XFEDER Région de 
Bruxelles-Capitale  
               XFSE Région flamande  
(c) prévoir la mise à disposition, 
par la Commission, de lignes 
directrices plus détaillées à 
l'intention des États membres 
               XInspection des 
Finances  (Ces réponses 
positives ne doivent pas être 
considérées comme indiquant le 
fait qu’il n’existe déjà pas d’effort 
en la matière mais comme une 
amélioration possible.) 
               XFEDER Région 
wallonne (Ces réponses positives 
ne doivent pas être considérées 
comme indiquant le fait qu’il 
n’existe déjà pas d’effort en la 
matière mais comme une 
amélioration possible.) 
               XFSE Région de 
Bruxelles-Capitale  
               XFEDER Région de 
Bruxelles-Capitale  
(d) autres suggestions 
               XFEDER Région 
flamande : Simplifier les règles 
d’éligibilités 
               XFSE Région flamande : 
Simplifier les règles Européens 
d’éligibilités 

relatif aux résultats de 
celui ci 
              XInspection des 
Finances  (Ces 
réponses positives ne 
doivent pas être 
considérées comme 
indiquant le fait qu’il 
n’existe déjà pas d’effort 
en la matière mais 
comme une amélioration 
possible.) 
              XFEDER 
Région flamande  
              XFEDER 
Région de Bruxelles-
Capitale  
(c) utilisation d'une 
méthodologie 
d'échantillonnage 
standard 
              XFSE Région 
flamande  
(d) effectifs 
supplémentaires 
              XFSE Région 
flamande  
(f) autres suggestions 
              XFSE Région 
flamande : Simplifier les 
règles Européens 
d’éligibilités 
              XFSE Région 
wallonne : L’autorité 
d’Audit responsable des 
programmes FSE gérée 
par l’AGFSE n’est pas 
concernée par cette 
remarque mais il nous 
semble que cette 
question devrait être 
adressée aux Autorités 
d’Audit et non aux 
Autorités de Gestion. 

               XFEDER 
Région de Bruxelles-
Capitale  
               XFSE Région 
flamande  
(b) contrôles renforcés 
et audits sur place 
               XInspection 
des Finances (Ces 
réponses positives ne 
doivent pas être 
considérées comme 
indiquant le fait qu’il 
n’existe déjà pas 
d’effort en la matière 
mais comme une 
amélioration possible.) 
               XFEDER 
Région de Bruxelles-
Capitale  
               XFSE Région 
flamande  
(c) simplification des 
règles 
               XInspection 
des Finances (Ces 
réponses positives ne 
doivent pas être 
considérées comme 
indiquant le fait qu’il 
n’existe déjà pas 
d’effort en la matière 
mais comme une 
amélioration possible.) 
               XFEDER 
Région wallonne (Ces 
réponses positives ne 
doivent pas être 
considérées comme 
indiquant le fait qu’il 
n’existe déjà pas 
d’effort en la matière 
mais comme une 
amélioration possible.) 
               XFEDER 
Région flamande  
(d) utilisation de listes 
de contrôle communes 
par les services de 
gestion 
               XInspection 
des Finances (Ces 
réponses positives ne 
doivent pas être 
considérées comme 
indiquant le fait qu’il 
n’existe déjà pas 
d’effort en la matière 
mais comme une 
amélioration possible.) 
               XFEDER 
Région wallonne (Ces 
réponses positives ne 
doivent pas être 

60

 
 
  
 
considérées comme 
indiquant le fait qu’il 
n’existe déjà pas 
d’effort en la matière 
mais comme une 
amélioration possible.) 
(e) autres suggestions 
               XFSE Région 
de Bruxelles-Capitale : 
Expliquer avec 
exemples à l’appui les 
méthodes de 
justification des 
prorata, des clés de 
répartition, … 
               XFSE Région 
flamande : Simplifier 
les règles Européens 
d’éligibilités 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(b) reinforce documentary 
checks on claims submitted by 
beneficiaries 
(c) increase on-the-spot 
verifications on operations 
before certification 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries  
(c) more detailed guidelines be 
provided to Member States by the 
Commission 

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and audits on the spot 
(c) simplification of rules 
(d) common checklists 
used by managing 
authorities 

(a) more training for staff of 
national/regional/managing 
authorities and intermediate bodies 
(b) more training to be provided for 
beneficiaries 
(c) more guidelines to be provided to 
Member States by the Commission 

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings 
(c) the use of standard 
sampling methodology 

Bulgaria 

YES - The paying agency 
is updating its internal 
rules and procedures for 
the departments 
implementing the 
Regional Development 
Policy on the basis of the 
recommendations 
received from the audit 
authorities and/or 
amendments to Bulgarian 
and EU law. 
In connection with the 
new electronic registers 
being built by other 
government agencies, 
new types of 
questionnaires and 
checks are being 
introduced to step up the 
scrutiny of the 
documentation and 
declarations the 
beneficiaries submit with 
their payment requests.  

61

(2) Yes, but minimal use 

YES - The 
certifying authority 
has developed 
guidelines for the 
management of 
resources from the 
Operational 
Programme co-
financed by the EU 
Structural Funds 
and the Cohesion 
Fund As they were 
introduced, the 
effectiveness of the 
procedures was 
analysed and ways 
were sought to 
streamline them. It 
was found that 
changes needed to 
be made. The 
purpose was to 
speed up 
payments to 
beneficiaries, allow 
the managing 
authorities more 
flexibility in making 
payments whilst 
maintaining the 
proper level of 
management 
accountability, and 
make 
implementing EU 
funds as efficient 
and effective as 
possible. 
Moreover the 
following measures 
have been 
introduced at the 
national level: 
• improved 
coordination; 
• simplification of 
the legal rules 

 
 
  
regarding public 
procurement and 
improvement of the 
preliminary 
procedural checks 
on public 
procurement 
involving EU funds; 
• raising the ceiling 
for advances to 
public beneficiaries 
to 35%; 
• standard 
deadlines for 
checking 
expenditure and 
making payments 
to beneficiaries; 
• a new 
methodology for 
making financial 
corrections; 
• new Instructions 
for handling 
irregularities, 
financial 
corrections and 
verified 
expenditure under 
the Operational 
Programmes co 
financed by the EU 
Structural Funds 
and the Cohesion 
Fund;  
• new Instructions 
for projects 
generating revenue 
and the application 
of Article 55 of 
Council Regulation 
(EC) No 1083/2006 
of 11 July 2006. 

YES with the 
comment:As a 
Member State, 
under the current 
system we are 
unable to take any 
initiatives aimed at 
simplifying the 
implementation of 
the programmes.  

Cyprus 

Comment: The 
Management Authority 
applies the management 
and control framework as 
specified in the relevant 
European Union 
regulations.  

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(c) increase on-the-spot 
verifications on operations 
before certification 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries   

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies 
(b) more training to be provided for 
beneficiaries 

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and audits on the spot 
(c) simplification of rules 
(d) common checklists 
used by managing 
authorities 

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings 
(c) the use of standard 
sampling methodology 
(d) additional staff 
resources 

Czech 
Rep 

YES - • Since 30 June 
2011, grant beneficiaries 
have been screened in 
the Insolvency Register 
for all RDP projects 

(b) Reinforce documentary 
checks on claims submitted by 
beneficiaries - Including 
preventive control of pre-
procurement verifications in 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and audits on the spot 

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies 
(b) more training to be provided for 
beneficiaries  

a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
b) specific guidance by the 
Commission on the scope 

YES 

62

(2) Yes, but minimal use - 
with the comment: Our 
general our aim is to simplify 
both with respect to farmers 
and the government 
authorities, so we believe 
that we will be making 
greater use of lump sums or 
flat rates in the new 
programming period (small 
farmers’ scheme). 

(2) Yes, but minimal use  

For example 
consistency with the 
7th support 
framework for 
research as regards 
the flat rates. 

There are many 
possibilities for 
simplifying 
Commission rules, 
mainly as regards 
monitoring the rural 
development 
programme (many 
reports required) and 
the rules on cross-
compliance. 

In both cases. Some 
areas covered by the 
rules of the 
Commission (EU) are 
not sufficiently clear 

 
 
 
reimbursed in the period 
over which the projects 
must follow their 
designated purpose 
(screening takes place at 
the end of the quarter). 
• In the Czech Republic, 
the method for checking 
the stocking intensity 
under AEM, LFA and 
Natura 2000 measures 
has been modified. This 
modification was 
introduced by 
amendments to 
Government Regulations 
No 75/2007 and No 
79/2007, prepared by the 
Ministry of Agriculture. 
The monitored period was 
extended from one day 
(31 July) to three months 
(from 1 June to 31 
August); on-the-spot 
checks will mainly take 
place in this period – the 
checks have been 
delegated to the Czech 
Breeding Inspectorate 
(CBI). 
• Multiple selections of 
entities for on-the-spot 
checks during the 
calendar year (eligibility 
and cross-compliance) – 
selections in spring, 
summer, autumn – the 
performance of on-the-
spot checks spread 
throughout the calendar 
year. 

YES - Over the past two 
years Denmark has 
implemented a major 
inter-agency project called 
the "Better control" 
project. Under this project 
it identified high-risk areas 
in connection with control 
sampling and the 
implementation of 
integrated on-the-spot 
controls across all the 
area aid schemes. The 
project ended in 2011 and 
one of the objectives was 
to considerably reduce 
the error rate in the area-
based part of the rural 
development programme. 

Denmark  

risks areas. 
(d) Other suggestions - Simplify 
the rules for drawing on funds at 
both national and European 
level. 

beneficiaries   

(c) simplification of rules 

(d) any other suggestions 

of verifications and the 
extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings 
d) additional staff 
resources 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring  

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries   

(a) guidance and training 
at the level of 
beneficiaries  
(c) simplification of rules 
(d) common checklists 
used by managing 
authorities  

(a) more training for staff of 
national/regional/managing 
authorities and intermediate bodies  
(b) more training to be provided for 
beneficiaries  

(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings  
(e) re-structuring of 
training for audit 
authorities  

YES - Agriculture 
and natural 
resources policy 
area 
One initiative taken 
in Denmark is for 
area aids forming 
part of direct 
agricultural aid or 
rural development 
aid to be allocated, 
paid and controlled 
from the same field 
map system and 
the same common 
form, and the 
paying agency has 
the same 
management and 
control authority for 
the two aid 
schemes in order 
to facilitate 
implementation of 

63

and may be 
interpreted in different 
ways. The 
Commission (EU) 
rules do not set clear 
guidelines for the 
performance of the 
Commission’s 
activities (deadlines, 
procedures). Some 
areas are specified in 
the Commission’s 
guidelines (but not 
always clearly), 
although these are 
only recommendatory; 
however, control 
bodies (the 
Commission, the 
ECA) require 
compliance with them. 
As beneficiaries are 
obliged to observe, in 
general, rules on the 
provision of funding, 
and the financing of 
final beneficiaries in 
the Czech Republic is 
based on the pre-
financing of 
expenditure from the 
central government 
budget, they must 
proceed in 
accordance with both 
national and 
European legislation. 
This places an 
increased burden on 
beneficiaries and 
requires knowledge of 
regulations and 
guidelines. 

Agriculture and 
natural resources 
policy area 
Commission rules. 

Cohesion policy area 
Commission rules 
concerning state aid, 
procurement and the 
period for keeping 
documents. 

(2) Yes, but minimal use 
(agriculture and natural 
resources policy area). 
(3) Yes, extensive or 
exclusive use (cohesion 
policy area). 

 
 
 
the rural 
development 
programme. 
There is now a 
possibility that, 
instead of 20-year 
agri-environmental 
payments, 
agricultural land 
can be turned into 
wetlands with the 
State purchasing 
the land and re-
selling it subject in 
perpetuity to land 
use requirements. 
It is hoped that this 
can lead to 
simplification. 
Moreover, it has 
proved difficult to 
simplify the 
implementing and 
controlling 
provisions which 
are at the same 
time extremely 
extensive, 
restrictive and 
detailed. 
Cohesion policy 
area 
Denmark has 
introduced a 
standard rate for 
overheads, 
increased the limit 
for accelerated 
depreciation and 
simplified 
requirements for 
proof of payment 
on salary slips. 

YES with the 
comment: Twelve 
different rates for 
the reimbursement 
of expenditure from 
the ESF on the 
basis of 
standardised unit 
prices have been 
implemented in 
Estonia. 

a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
b) specific guidance by the 
Commission on the scope 
of verifications and the 
extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings 
c) the use of standard 
sampling methodology 
d) additional staff 
resources 
e) re-structuring of training 
for audit authorities 

1) No 

First and foremost, 
the Commission’s 
rules should be 
simplified. For 
example, the use of a 
method for the 
reimbursement of 
indirect expenditure 
on a flat-rate basis 
should not be limited 
to cases where public 
procurements etc are 
used to carry out the 
action, because this 
significantly 
complicates and limits 
simplification. The 
costs which constitute 
direct and indirect 
expenditure should 
also be more clearly 
defined. 

Estonia 

a)  reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
b)  reinforce documentary 
checks on claims submitted by 
beneficiaries 

a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
c) more detailed guidelines be 
provided to Member States by the 
Commission 

a) guidance and training 
at the level of 
beneficiaries 
b) reinforced controls 
and audits on the spot 

a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies 
b) organise more training for 
beneficiaries 

64

 
 
  
Finland 

YES - All parcels have 
been inspected  

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(b) reinforce documentary 
checks on claims submitted by 
beneficiaries 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies   
(c) more detailed Commission 
guidelines for Member States 

(b)  renforcer les contrôles 
documentaires des déclarations 
soumises par les bénéficiaires 
La circulaire du Ministère de 
l’intérieur du 6 mai 2011 a eu 
pour objet le « Renforcement 
des procédures de gestion et de 
contrôle des programmes 
opérationnels FEDER 2007-
2013. La mise en œuvre des 
règles nationales d’éligibilité des 
dépenses du FEDER a été 
complétée par le décret du 21 
janvier 2011. 

(a) offrir davantage de formations au 
personnel des services 
gestionnaires/nationaux/régionaux et 
des organes intermédiaires 
Le ministère de l’intérieur va 
proposer à partir du 1er trimestre 
2012 des formations sur des thèmes 
particuliers d’éligibilité des dépenses 
(régimes d’aides, instruments 
d’ingénierie financière, projets 
générateurs de dépenses, marchés 
publics…). Ces formations seront 
ouvertes aux instructeurs et aux 
contrôleurs d’opération des services 
de l’Etat et des collectivités 
territoriales régionales. 

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and on-the-spot audits  
(c) simplification of rules 
(d) common checklists 
used by managing 
authorities 

(a) conseils et formation 
au niveau des 
bénéficiaires 
(b) contrôles renforcés et 
audits sur place 
(d) utilisation de listes de 
contrôle communes par 
les services de gestion 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) more training for beneficiaries  

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
(c) the use of standard 
sampling methodology 

YES 

(3) Yes, extensive or 
exclusive use 

In both areas. As 
regards agricultural 
business and project 
aid (priority axis 3), 
our own rules have 
the greatest potential 
for simplification.  

(a) offrir davantage de formations au 
personnel des services 
gestionnaires/nationaux/régionaux et 
des organes intermédiaires 

(f) autres suggestions - 
Aucune des suggestions 
indiquées de (a) à (e) n’est 
pertinente au regard des 
commentaires formulées 
par la Cour des comptes 
européenne sur l’Autorité 
d’audit de l’Etat membre 
concerné par le présent 
questionnaire (France). 

OUI -- Il a été mis en 
place pour la campagne 
2011 des aides SIGC 
(aides du 1er pilier PAC, 
aides à la surface du 
développement rural et 
aides animales) une 
procédure ayant pour 
objet la traçabilité et la 
supervision de la saisie et 
de l'instruction des 
dossiers. Elle décrit les 
éléments devant 
impérativement être 
tracés sur une fiche de 
suivi ainsi que les 
principes de la 
supervision hiérarchique 
devant être réalisée au 
sein des services 
déconcentrés instructeurs 
des aides. Cette 
disposition doit contribuer 
au renforcement du 
contrôle administratif des 
aides surfaces du second 
pilier.  
- Au titre de la campagne 
2011, la déclaration sur 
l'honneur de la régularité 
de sa situation fiscale 
n'est plus demandée au 
demandeur, mais fait 
l'objet d'un contrôle croisé 
par recherche 
automatique du  numéro 
fiscal entre les services 
de l'Etat. Cette disposition 
doit permettre de faciliter 
et fiabiliser le contrôle 
administratif croisé sur ce 
point.  

France  

Germany 

(d) Other suggestions: 
Simplification of the project 
selection criteria and national 
funding eligibility rules, 
information and guidance for 
authorising bodies, clear 
instructions/checklists/guidelines 
and also explanations before the 
funding period begins, 
consideration of national audit 
authorities' findings and 
remedies introduced regarding 
the calculation of error levels. In 
its reply regarding 4.25, the 

(d) Other suggestions: The ECA's 
examples under 4.28 already 
showed that the errors detected 
were based on infringements of very 
different requirements (in some 
cases specific national 
requirements). Covering all areas in 
training and guidance where 
infringements are possible may 
create considerable difficulties.              

(d) Other suggestions:  
Simplification of the 
European rules; 
information events, 
training and guidelines 
for authorising bodies; 
standardised checklists, 
clear provisions 
regarding funding 
eligibility: result-oriented 
funding;  
- on-the-spot controls 
and checks and constant 
simplification efforts are 

(d) Other suggestions:  Simplification 
of the guidelines, rules and award 
criteria; increase in the maximum 
amounts for direct puchases in 
relation to works and other services 
and supplies; information and 
guidance for the authorising bodies;  
- in the case of flat-rate corrections 
for errors in the award procedure, we 
see the problem that the flat-rate 
errors are often higher than the 
actual financial damage. This results 
in error rates being too high. 
Suggestion: differentiated and well-

(f) Other suggestions: the 
Commission's extensive 
requirements are too 
exacting for the audit 
authorities to implement. 
Despite these extensive 
requirements, there are 
still areas of uncertainty 
with regard to 
implementation 
concerning, for example, 
sampling for small 
populations or drawing up 
annual  control reports and 

YES -  Flat rates, 
doing without 
programmes, 
redistribution of 
resources in favour 
of funding criteria 
which are easier to 
implement with 
large project 
volumes; by laying 
down national 
funding rules 
(conditions), a 
funding policy 

The greatest potential 
for simplification lies 
in the EU rules. The 
Commission often 
lays down extensive 
and highly 
complicated 
guidelines for the 
interpretation of the 
rules specified in the 
Regulations, 
describing these as 
working methods. If 
these guidelines, 

Not yet possible to predict 
fully as the exact details are 
not yet known. 

65

 
 
  
  
  
  
measures which are 
regularly adopted.  

founded guidelines with many 
practical examples.                                

Commission correctly points out 
thatfurther findings are made 
during on-the-spot checks, 
which only take place when a 
project is already at an 
advanced stage. On the basis of 
these findings, corrections are 
then made if necessary to 
certifications of expenditure. 
Simpler and clearer rules for the 
funding of large projects and 
cost-based assistance related to 
expense-based assistance. 

tailored to specific 
regional features is 
being pursued 
which may set 
different (possibly 
also more 
restrictive) 
priorities than the 
standardised 
European-wide 
rules. The trend 
towards defining 
grant eligibility 
rules largely at 
national level is 
expressly 
welcomed. The 
error rate 
mentioned will 
automatically fall in 
so far as fewer 
binding 
requirements are 
laid down at 
European level. 

opinions including the 
question of error 
projection. The views of 
individual DGs 
(EMPL/REGIO) also differ 
here. The effort to be 
made in terms of 
verification according to 
the requirements is barely 
feasible since increasing 
numbers of staff will be 
required to implement all 
the requirements. 
However, staff cannot be 
made available in 
unlimited numbers, 
especially since this also 
raises the question of the 
proportionality of  
administrative effort on 
implementation. The short 
deadlines for the 
verification of projects is a 
further issue. Given the 
large number of projects to 
be verified, it is practically 
impossible to conclude all 
the projects to be verified 
within the time limit 
specified by the Regulation 
(up to 30.06 of the year). 
Even the Commission's 
concession that these 
checks need not be carried 
out until the annual control 
reports are drawn up 
provides only limited relief. 
Either the requirements 
concerning the scope of 
the projects to be verified 
will have to be reduced or 
more time must be given 
to carry out audits 
properly. 
- Improving communication 
between the Commission 
and the audit authorities; 
the Commission should in 
particular work in 
partnership and consider 
in more detail specific 
experiences of the audit 
authorities in terms of 
practice and context 

which are not legal in 
nature, are not 
observed, there is a 
risk of the 
Commission imposing 
restrictions. To this 
extent, the 
Regulations, which 
already involve 
considerable 
administrative effort, 
entail further 
uncertainties. In 
general, the rules on 
implementation (Basic 
Regulation, 
Implementing 
Regulations) need to 
be worded clearly and 
unambiguously. The 
reduction of red tape 
which has often been 
promised should be 
introduced in 
particular in the 
forthcoming 2014-
2020 round of 
projects, in order to 
reduce adminstrative 
effort by paying 
special attention to 
continuity and, 
possibly, selected 
further development 
where required. 
Unfortunately, the 
new draft rules 
submitted paint a 
different picture; even 
if at one level (e.g. 
administration), 
simplification is the 
aim, this is to the cost 
of the other level (e.g. 
verification). It is to be 
feared that, overall, 
there will be a further 
increase in red tape.  
- Application of 
national procedural 
law; introduction of de 
minimis thresholds; 
simplification of 
national funding 
eligibility 
requirements; 
simplification of flat 
rate costs; iincreased 
use of flat rate 
funding,  

Greece 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(b) reinforce documentary 
checks on claims submitted by 
beneficiaries 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries   

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and audits on the spot 
(c) simplification of rules 
(d) common checklists 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies 
(b) more training to be provided for 
beneficiaries 

YES 

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
(d) additional staff 
resources 
(e) re-structuring of 
training for audit 

In particular as 
regards the 
Commission’s rules 
we would note the 
introduction of major 
legislation to simplify 
the rules for eligibility 

(2) Yes, but minimal use - 
According to the ministerial 
decision of 04/03/2011, the 
Audit Committee, as Audit 
Authority for the NSRF, may 
impose proportionate, 
extrapolated and flat rate 

66

 
 
  
used by managing 
authorities 

authorities 

Hungary 

NO 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring  

(b) training which specifically targets 
national/regional authority staff and 
beneficiaries - BIS 
(c) more detailed guidelines be 
provided to Member States by the 
Commission 

(c) simplification of rules 

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies 
(c) more guidelines to be provided to 
Member States by the Commission  

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 

YES. In this 
respect, we can 
provide the 
following non 
exhaustive list of 
examples:  
- customers fill in, 

67

of expenditure on 
projects under the 
ESF and the ERDF 
(see ‘simplified 
costs’). It should 
however be noted that 
implementation of 
these provisions, 
which were 
introduced almost in 
the middle of the 
programming period, 
requires considerable 
preparation by the 
Member States and a 
considerable time 
consulting with the 
Commission services 
in order to provide the 
necessary security 
regarding eligibility. 
Therefore it is 
considered as an 
important parameter 
of the whole process 
not only to introduce 
rules and regulations 
for simplification, but 
to simplify 
implementation of 
those provisions. 
Possibilities for further 
simplification are 
identified in the 
requirements laid 
down by the existing 
Regulation for 
revenue-generating 
projects (Article 55 of 
Regulation (EC) No 
1083/2006). Further 
we would note that 
the simplification of 
implementation is 
very often associated 
not only with the 
simplicity of existing 
rules but also with 
stability throughout 
the implementation 
period and full 
expertise from the 
beginning. An 
example of the latter 
is the application of 
Article 44 of 
Regulation (EC) No 
1083/2006 on 
financial engineering 
instruments. 

Simplification is 
equally necessary in 
both areas. 

corrections following checks 
on systems and operations 
and checks on closure 
procedures carried out. Flat 
rate corrections may be 
imposed either following 
individual irregularities or 
systemic irregularities. 
The Financial Control 
Department (EDEL) 
assesses the significance of 
the findings 
(formal/substantial) and the 
frequency (single/recurring) 
in order to detect any 
systemic problems as a 
result of failure by the 
controlled entities to 
implement reliable methods 
to ensure the eligibility of EU 
certified costs, and to apply 
the appropriate flat rate 
corrections.  

(1) No - with the comment: 
We are not using them at 
present, but may decide to 
do so in the light of the 
detailed regulation, in the 
next programming period. 

 
 
undertaken for the audit of 
projects and the reporting 
of audit findings 
(c) the use of  standard 
sampling methodology 

on an annual basis 
through the 
customer portal, 
their general 
agricultural data 
and monitoring 
data relating to the 
financial and 
physical 
implementation of 
operations carried 
out by them, 
pursuant to Decree 
No 18/2009 of the 
Minister for 
Agriculture and 
Rural Development 
of 6 March 2009 
laying down 
detailed rules on 
providing 
monitoring data 
concerning 
measures 
receiving 
assistance from 
the European 
Agricultural Fund 
for Rural 
Development; 
- the customer 
uses the single 
application, 
electronically, to 
request the aid that 
might be granted 
under certain 
schemes, pursuant 
to Decree No 
36/2009 of the 
Minister for 
Agriculture and 
Rural Development 
of 3 April 2009 
laying down 
standard rules of 
procedure for 
granting certain aid 
funded from the 
European 
Agricultural 
Guarantee Fund 
and the European 
Agricultural Fund 
for Rural 
Development;  
- in the event of 
natural disasters, 
extreme weather 
conditions, 
epidemics, 
infectious 
diseases, or 
embargoes, the 
Agricultural 
Administration 
Office submits the 
expert authority’s 
position, certifying 

68

 
 
the cases of force 
majeure mentioned 
above, directly to 
the Agriculture and 
Rural Development 
Office, pursuant to 
Article 6(1) of 
Decree No 
34/2010 of the 
Minister for 
Agriculture and 
Rural Development 
of 34 April 2010 
laying down 
standard rules of 
procedure for 
granting certain aid 
funded from the 
European 
Agricultural 
Guarantee Fund, 
the European 
Agricultural Fund 
for Rural 
Development and 
the central budget 
in 2010. Thus, 
customers do not 
have to use 
separate paper 
based forms to 
submit the 
certificates; 
- technical 
assistance is 
available when 
submitting the 
single application 
or notifying data 
changes, pursuant 
to Decree No 
22/2011 of the 
Minister for Rural 
Development of 25 
March 2011 laying 
down standard 
rules of procedure 
for granting certain 
aid funded from the 
European 
Agricultural 
Guarantee Fund, 
the European 
Agricultural Fund 
for Rural 
Development and 
the central budget 
in 2011; 
- Article 8(7) of 
Government 
Decree No 
82/2007 of 25 April 
2007 on the 
development of 
financial, 
accounting and 
control systems 
and rules of 
settlement for 

69

 
 
programmes and 
measures 
receiving 
assistance from 
the European 
Agricultural Fund 
for Rural 
Development, the 
European 
Fisheries Fund and 
the European 
Agricultural 
Guarantee Fund 
has enabled the 
customer to 
relinquish the grant 
through a 
declaration and the 
Agriculture and 
Rural Development 
Office to remove 
the unpaid 
amounts from the 
obligations in its 
records; 
- pursuant to 
Government 
Decree No 
158/2010 of 6 May 
2010 on questions 
concerning the 
export of 
agricultural and 
food products, 
under the export 
and export refund 
authorisation 
scheme, in addition 
to the earlier usual 
paper based export 
authorisation 
(paper based 
application and 
export certificate) 
and export refund 
(paper based 
export refund 
applications), a 
one stop shop 
system for customs 
administration has 
been implemented, 
under which 
customers are able 
to submit export 
certification and 
export refund 
applications 
electronically, and 
export certificates 
are sent to the 
customs authority 
electronically. 

Ireland 

YES - The Rural 
Development measures 
adopted in Ireland are 
mainly land based and as 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(b) reinforce documentary 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies 
(b) more training to be provided for 

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
(b) specific guidance by 

YES 

Ireland has 
continuously stressed 
the need to 
concentrate efforts on 

(2) Yes, but minimal use 

70

 
 
such the LPIS covers both 
Pillar 1 and Pillar 2 
supports.  The LPIS is 
regularly updated by the 
use of ortho imagery, 
results of on-the-spot 
controls and by 
administrative checks. 

checks on claims submitted by 
beneficiaries 
(c) increase on-the-spot 
verifications on operations 
before certification 
(d) any other suggestions - 
Training needs to be 
targeted/tailored at the various 
levels in the financial 
management and control 
cascade with regular follow-up 
refresher courses.  Clarification 
and simplification of eligibility, 
procurement, transparency and 
advertising rules at national and 
European level is also required. 

national/regional authority staff and 
beneficiaries   
(c) more detailed guidelines be 
provided to Member States by the 
Commission 
(d) any other suggestions - Training 
needs to be targeted/tailored at the 
various levels in the financial 
management and control cascade 
with regular follow-up refresher 
courses.  Clarification and 
simplification of eligibility, 
procurement, transparency and 
advertising rules at national and 
European level is also required. 

and audits on the spot 
(c) simplification of rules 
(d) common checklists 
used by managing 
authorities 
(e) any other 
suggestions - Training 
needs to be 
targeted/tailored at the 
various levels in the 
financial management 
and control cascade with 
regular follow-up 
refresher courses.  
Clarification and 
simplification of eligibility, 
procurement, 
transparency and 
advertising rules at 
national and European 
level is also required. 

beneficiaries 
(c) more guidelines to be provided to 
Member States by the Commission 
(d) any other suggestions - Training 
needs to be targeted/tailored at the 
various levels in the financial 
management and control cascade 
with regular follow-up refresher 
courses.  Clarification and 
simplification of eligibility, 
procurement, transparency and 
advertising rules at national and 
European level is also required.  We 
would welcome a Commission/ECA 
initiative to provide more targeted 
guidance in this regard as different 
interpretations of the rules exist at 
Member State, Managing, Certifying 
and Audit Authorities and 
Commission levels and at the ECA.  

the Commission on the 
scope of verifications and 
the extent    of checks to 
be undertaken for the audit 
of projects and the 
reporting of audit findings 
(c) the use of  standard 
sampling methodology 
(e) re-structuring of 
training for audit 
authorities 
(f) any other suggestions: 
Greater clarity on eligibility 
rules. 

simplification 
of programme 
structures and the 
financial management 
and control systems 
taking into account 
the principles of 
simplification and 
proportionality. A 
main part of any 
simplification for 
management and 
beneficiaries 
is allowing flexibility 
were 
possible. Therefore, 
all simplification 
proposals from the 
Commission rules 
should be optional 
and not 
mandatory. However, 
at Member State level 
a balance is required, 
as a more flexible 
approach to 
specific operations 
could be a 
simplification to the 
beneficiaries but, 
potentially, not a 
simplification for 
management because 
a higher staff 
management 
resource would be 
required than setting 
general national rules. 

Italy 

Latvia 

YES - Since 2007 Italy 
has been systematically 
updating land uses (the 
‘Refresh’ project) in 
relation to both EAGF and 
EAFRD, resulting in a 
noticeable improvement in 
the IACS. 

YES - The system for 
administrating measures 
has been improved, 
including with regard to IT 
systems. For example: 
1. A price catalogue has 
been established in the 
RDP IS system to 
compare prices between 
project applications 
submitted, as well as the 
prices offered in the 
catalogues of various 
manufacturers and 
distributors; experts have 
been involved in drawing 
up price estimates for 
construction and 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring  

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies 
(c) more detailed guidelines be 
provided to Member States by the 
Commission 

(a) guidance and training 
at the level of 
beneficiaries 
(c) simplification of rules 

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies 
(b) more training to be provided for 
beneficiaries 
(c) more guidelines to be provided to 
Member States by the Commission  

(b) Reinforce documentary 
checks on claims submitted by 
beneficiaries - Including 
preventive control of pre-
procurement verifications in 
risks areas. 
(d) Other suggestions - Simplify 
the requirements for entities 
implementing the EU funds, 
provide elucidation of the 
application of norms and 
improve human resources 
capacity for controls. 

(a) More training for staff in 
national/regional/managing 
authorities and intermediate bodies 
(b) Training which specifically targets 
national/regional authority staff and 
beneficiaries 
(c) More detailed guidelines be 
provided to Member States by the 
Commission 
(d) Other suggestions - The 
methodology of audited entities and 
auditors should be improved, to 
make it possible to select most risky 
samples even during verifications. 

(a) Guidance and 
training at the level of 
beneficiaries 
(b) Reinforced controls 
and audits on the spot 
(c) Simplification of rules 
(d) Common checklists 
used by managing 
authorities 
(e) Other suggestions - 
Developed guidelines 
‘No 10.11 Guidelines for 
the reporting of 
irregularities and 
ineligible expenditure 
identified in 
implementing the EU 
funds in the 2007-2013 

(a) More training for staff of 
national/regional/managing 
authorities and intermediate bodies 
(b) Training to be provided for 
beneficiaries 
(c) More guidelines to be provided to 
Member States by the Commission 
(d) Other suggestions - The 
institutions involved in the 
administration of EU funds work with 
the Public Procurement Bureau and 
the State Treasury in order to 
arrange regular training for the 
beneficiaries on procurement 
matters. From 2012 on, pre-
procurement verifications, apart from 
the PPB, will be carried out by the 
RI/CI, reducing/preventing 

71

(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings 
(e) re-structuring of 
training for audit 
authorities 

(a) Detailed checklists 
which cover all risks to the 
regularity of expenditure 
(f) Other suggestions - 
Audit institutions should 
apply international auditing 
standards, rather than their 
interpretation in the 
context of regulations. The 
auditor's professional 
judgment should be relied 
on. The head of the audit 
institution must meet the 
requirements of the 
Directive and must be a 
certified auditor. 

YES 

Both, mainly on the 
Commission side. 

3) Yes, where possible. 

YES 

We believe that the 
EC should draw up a 
uniform simplification 
system to be followed 
by the Member States 
in taking simplification 
measures nationally.  

In Cohesion 
Simplification 
measures taken at the 
national level  
To simplify the EU 
funds management 
and control system, 
amendments were 
made to a number of 
Cabinet regulations:  

(2) Yes, but minimum use - 
We believe that the EC 
should draw up a unified 
methodology of simplified 
expenditure to be applicable 
to all Member States, setting 
a single standard rate of 
indirect expenditure, 
standard unit prices for 
different positions, etc.  
In Latvia, a flat rate of 
indirect expenditure has 
been developed and 
implemented, however it 
took two years to be 
approved by the EC, which 
we feel is unsuitable for a 

 
 
 
reconstruction projects 
and for groups of specific 
equipment; information on 
price compliance is also 
obtained through the 
Internet or by contacting 
manufacturers. 
2. With regard to the 
growth of an aid 
applicant's operations, an 
evaluation is made of 
information obtained from 
a variety of databases – 
turnover growth, the 
number of livestock, 
farmed areas. 

infringements in the area of public 
procurement. 

programming period’; 
Developed guidelines 
‘No 10.10 Guidelines for 
the application of 
financial corrections to 
the EU funds financed 
projects’ (Paragraph 1.8 
of the Guidelines provide 
that this procedure 
applies to the 
EEA/Norwegian 
Financial Mechanism as 
well); 
The Cabinet information 
report ‘Information 
Report of the Ministry of 
Finance on implementing 
foreign financial 
resources (EU Structural 
Funds and the Cohesion 
Fund, the EEA Financial 
Mechanism, Norwegian 
Financial Mechanism 
and the Latvian-Swiss 
Cooperation 
Programme)’ provides 
information on ineligible 
expenditure, risks and 
action on a quarterly 
basis; 
The issues related to the 
prevention of corruption 
and to risk reduction are 
discussed in the 
meetings of the 
Coordination Council for 
protection of the EU 
financial interests 
(Cabinet Regulation No 
269, Cabinet Order No 
168) and, in accordance 
with the Managing 
Authority's initiative, the 
Council agreed to hold a 
technical meeting of the 
Council sub-group with 
the representatives of 
law enforcement 
institutions to discuss 
practical cases of 
suspected fraud, 
corruption risks, etc. 
In order to prevent 
irregularities in projects 
implemented by State 
authorities, on the MoF 
initiative, on 8 March 
2011 the Cabinet 
examined the matter of 
disciplinary cases 
(Protocol No 14 of 8 
March 2011, § 21, 
paragraph 4). According 
to this paragraph of the 
Protocol Decision, the 
Ministry of Finance 
(MoF) will request on a 
quarterly basis that 
heads of public 

72

matter of such importance. 

(a) Administrative 
work was facilitated 
for project risk-
assessment and for 
carrying out project 
checks. 
(b) The procedure for 
planning on-the-spot 
checks was improved. 
(c) The procedure for 
reporting verification 
results was simplified.
(d) The practice of on-
the-spot checks was 
optimised and unified. 
The risk of multiple 
checks of a single 
beneficiary being 
carried out under the 
project by more than 
one institution 
involved in the EU 
funds administration 
at the same time was 
limited. With the 
practice of checks 
being unified, the risk 
of repeated requests 
for the beneficiary’s 
documents that were 
already at the 
disposal of the audit 
institution was limited.
(e) Information 
turnover among 
institutions involved in 
EU funds 
management and 
electronic data entry 
were optimised in line 
with the EC 
requirements. The 
practice was also 
unified for the 
administration of 
irregularities and 
recovery of ineligible 
expenditure. The 
administrative burden 
was reduced as 
concerns the 
administration of 
irregularities both for 
beneficiaries and for 
the institutions 
involved in EU funds 
management. 
(f) A significant step 
forward in improving 
the EU funds 
management and 
control system was 
the supply of the 
explanatory materials 
for institutions 
involved in EU funds 
management. In order 
to reduce possible 
systemic errors, the 

 
 
administration authorities 
provide information on 
the number of 
disciplinary cases 
initiated under their 
control. In order to 
mitigate and prevent the 
risk of improper conduct, 
different issues of the EU 
funds monitoring, 
acquisition and 
implementation were 
addressed by the EU 
Funds Monitoring 
Committee meeting 
convened at least once 
every six months (on 4 
March 2010 and 24 
November 2010), 
involving regional, social 
and non-governmental 
partners. 
The Managing Authority 
has developed a risk 
management register, 
where conflicts of interest 
and fraud, including 
corruption, are classified 
as average risk. To 
mitigate and prevent this 
risk, under a number of 
EU funds management 
processes statements of 
lack of interest are used, 
as well as effective staff 
training is under way 
(various workshops are 
held; for example, on 21, 
22 October 2010 a 
seminar was held on 
irregularities and their 
identification in 
cooperation with the 
EC/OLAF), funded by the 
technical assistance 
project. In the future, at 
the request of the 
responsible 
institutions/cooperation 
institutions (RI/CI), in 
cooperation with the 
State Treasury additional 
seminars will be 
organized. 
In accordance with 
Cabinet Regulation No 
740, meetings with the 
institutions referred to in 
Paragraph 3 of Cabinet 
Regulation No 740 on 
the irregularities 
identified during the 
relevant quarter are held 
on a quarterly basis, and 
it was agreed that the 
cases of irregularities 
should be reported the 
EC/OLAF. In addition, 
this meeting addresses 

73

Ministry of Finance 
has developed and 
improved a series of 
guidelines and 
methodologies, 
standardising 
practices and 
determining the 
optimum (minimum 
and maximum) 
requirements, thus 
facilitating the work of 
both institutions 
involved in EU funds 
management and 
beneficiaries. 
At EC level  
(a) We believe that 
the EC should review 
the rules regarding 
mandatory reporting 
of fraud where the 
total of ineligible 
expenditure is less 
than EUR 10 000 (EU 
funded part).  
(b) We suggest that 
the EC draw up 
guidelines for the 
application of 
proportional financial 
corrections not only 
for infringements in 
procurement, but for 
those in other areas 
as well, including a 
detailed description of 
cases and amounts of 
corrections 
applicable. We 
believe that such 
guidelines are 
required for the 
application of identical 
penalties for identical 
infringements in 
implementing EU 
projects in all EU 
Member States. The 
Managing Authority 
informed the EC 
about the necessity to 
draw up such 
guidelines or to 
supplement the 
existing ones.  

In Agriculture and 
Rural Development 
Simplification 
measures taken at the 
national level  
Measures were taken 
to reduce the 
administrative burden 
for the beneficiaries 
and the process of 
application for aid was 
simplified: 

 
 
 
other issues related to 
the identification and 
prevention of 
irregularities, 9. On 27 
May 2011, the Managing 
Authority held training for 
public prosecutors on 
various EU funds issues, 
including the nature and 
identification of 
irregularities, and other 
issues. 
Improving the capacity of 
Public Procurement 
Bureau and carrying out 
pre-procurement 
verifications to reduce 
the risk of irregularities in 
the area of procurement, 
resulting in extended 
periods of project 
implementation; 
Improving the knowledge 
of and consulting for the 
beneficiaries on the EU 
funds, organizing 
seminars and training, 
improving the fulfilment 
of its functions by the 
MoF as the EU funds 
responsible institution (in 
relation to projects under 
activity 1.5.1.1.1 and TA 
activities), streamlining 
the flow of information 
between the parties/units 
involved in implementing 
the projects. 

74

(a) IT system 
operation and 
cooperation with other 
institutions directly or 
indirectly involved in 
EU funds 
implementation were 
improved; for 
example, filing a 
project application, 
the applicants need 
not submit documents 
that may be obtained 
by the administrating 
authority from 
databases of other 
State institutions. 
(b)  The information 
system was improved: 
the electronic 
application system 
enables the 
beneficiaries to file 
both reports of the 
monitoring period and 
project applications 
under specific 
measures. 
(c) The system for 
administration of 
project applications 
was simplified, 
reducing the 
administrative burden 
both for the 
administrating 
authority and for the 
applicant: 
commitment upon 
filing a project 
application (including 
the applicant’s 
declaration, statement 
of compliance with the 
provisions and norms 
of legal enactments, 
authenticity of the 
data supplied, etc.) 
and the decision of 
the administrating 
authority on granting 
the aid and approval 
of the project 
application 
(administrative act), 
waiving the procedure 
of entering into a 
bilateral contract, 
which is time-
consuming and in fact 
duplicated legal 
norms currently set 
forth in regulations. 

At EC level  
The Commission 
rules may be 
simplified, for 
example, in the 

 
 
 
following areas: 
(a) State aid approval 
procedure. Current 
situation: the MS is to 
implement a separate 
procedure for 
approval of the State 
aid by the Directorate 
General for 
Competition, and only 
after the scheme is 
approved the MS may 
submit amendments 
to the relevant 
programming 
documents. As the 
Commission is a 
single institution, it is 
necessary to simplify 
this process and 
provide for the aid 
scheme to be 
approved once, 
ensuring cooperation 
within the 
Commission. 
(b) Necessary 
information requested 
by the Commission – 
scope and frequency. 
Current situation: 
under the system of 
continuous 
evaluation, to ensure 
monitoring, the MS is 
to supply extensive 
information on the 
results achieved in 
implementing the EU 
funds. Due to the 
considerable scope of 
necessary 
information, as part of 
the information is 
supplied to the 
Commission in other 
documents; this 
results in additional 
administrative burden 
for the MS; therefore 
the Commission 
needs to evaluate the 
sources of obtaining 
the necessary 
information and the 
necessity of 
information 
requested. 
The suggestions were 
made, taking into 
account the EC 
regulations proposed 
for the following 
programming period 
(2014-2020), as well 
as discussion on the 
simplification is under 
way between COM 
and the MSs under 

75

 
 
(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring; 
(b) reinforce documentary 
checks on claims submitted by 
beneficiaries; 
(c) increase on-the-spot 
verifications on operations 
before certification; 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies;  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries;   
(c) more detailed guidelines be 
provided to Member States by the 
Commission; 

(a) guidance and training 
at the level of 
beneficiaries; 
(b) reinforced controls 
and audits on the spot; 
(c) simplification of rules;
(d) common checklists 
used by managing 
authorities; 

a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies; 
b) more training to be provided for 
beneficiaries; 
c) more guidelines to be provided to 
Member States by the Commission; 
d) any other suggestions. Guidelines 
should be prepared on time rather 
than in the middle of the 
programming period as often 
happens. 

YES 

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure;  
(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings; 
(c) the use of standard 
sampling methodology; 
(f) any other suggestions. 
Improvement of the level 
of qualifications of the 
audit institution and 
application of appropriate 
measures to ensure lower 
staff turnover. 

Lithuania 

YES - 1. In order to 
ensure high-quality cross-
checks, orthophotos are 
updated in Lithuania on a 
regular basis (last 
updated in 2009–2010). 
2. In 2010, the Land 
Parcel Identification 
System was linked to the 
Simplified Direct Payment 
Information System, thus 
ensuring the receipt of 
relevant information on 
the land parcels 
controlled.  
3. Since 2010 when 
electronic declaration was 
fully implemented in 
Lithuania, 100% 
graphically drawn parcel 
data have been used 
during cross-checks in the 
process of the 
management of 
applications for direct 
payment for agricultural 
land and crops as well as 
Lithuanian rural 
development 2007–2013 
area-related measures. 

76

(2) Yes, but minimal use 

the new programming 
period – in working 
groups for proposed 
EC regulations (a 
separate simplification 
working group has 
been established). 

Rules (other legal 
acts) issued by the 
Commission could 
promote simplification 
the most, thus 
providing more clarity 
in the determination 
and application of 
simplification 
methods.  
All simplifications are 
already applied in 
Lithuania and the 
following legal acts 
have been prepared: 
1. The terms and 
application of 
simplifications are 
provided for in the 
Rules on compliance 
with expenditure and 
financing 
requirements for 
projects performed 
under the Lithuanian 
Strategy for the Use 
of EU Structural 
Assistance for 2007–
2013 and 
implementing 
operational 
programmes, 
approved by 
Government 
Resolution No 1179 of 
31 October 2007 
(Žin., 2007, No 117-
4789; 2009, 76 – 
3115; 2010, 110-
5635); 
2. Rules for 
estimating and 
covering indirect 
project expenditure on 
a flat-rate basis, 
approved by Order No 
1K-112 of 27 March 
2008 of the Minister 
for Finance of the 
Republic of Lithuania 
(Žin., 2008, No 37-
1348; 2011, No 78-
3826).  
3. Rules for 
determining and 
applying fixed unit 
costs of project 
expenditure and fixed 
project expenditure 
amounts, approved by 

 
 
(2)  Oui, mais de manière 
minimale (Ministère de 
l’Economie - FEDER, 
Ministère du Travail - FSE, 
Autorité d’audit - IGF) 

Order No 1K-264 of 4 
August 2011 of the 
Minister for Finance of 
the Republic of 
Lithuania (Žin., 2011, 
No 102-4795). 
Flat rates are widely 
used for estimating 
and covering indirect 
expenditure (only in 
European Social Fund 
projects). The 
application of fixed 
unit costs of project 
expenditure and fixed 
project expenditure 
amounts has just 
been started. 
Institutions are 
encouraged to use 
these simplifications 
in new measures, 
methodologies are 
being prepared and 
studies for justification 
of the establishment 
of simplifications are 
carried out. 

La réglementation 
européenne 
(Autorité d’audit - 
IGF, Ministère de 
l’Economie - FEDER, 
Ministère du Travail 
- FSE, Ministère du 
Développement 
durable et des 
Infrastructures – 
URBACT, 
INTERACT, 
INTERREG, ESPON) 

Autorité d’audit - IGF : 
coûts forfaitaires, 
seuils en matière de 
marchés publics, 
méthodes standard 
de calcul des frais de 
personnel horaire 

Programmes qui sont 
en gérance par le 
Ministère du 
Développement 
durable et des 
Infrastructures 
(URBACT, 
INTERACT, 
INTERREG, ESPON) 
: Les procédures de 
marchés publics en 
dessous des seuils 
pour lesquelles une 
procédure 
européenne est 
prescrite pourraient 
avoir des fourchettes 

(a) offrir davantage de formations au 
personnel des services 
gestionnaires/nationaux/régionaux et 
des organes intermédiaires (Autorité 
d’audit - IGF, Min. Econ. - FEDER) 
(c) prévoir la mise à disposition, par 
la Commission, de lignes directrices 
plus détaillées à l'intention des États 
membres (Autorité d’audit - IGF, 
Ministère de l’Economie - FEDER, 
Ministère du Travail - FSE) 

(a) donner davantage de 
conseils aux bénéficiaires en 
vue d'empêcher la survenance 
d'irrégularités (Autorité d’audit – 
IGF°, Ministère de l’Economie - 
FEDER, Ministère du Travail - 
FSE)  °IGF = Inspection 
générale des finances 
(b) renforcer les contrôles 
documentaires des déclarations 
soumises par les bénéficiaires 
(Autorité d’audit - IGF) 
(c) augmenter les vérifications 
sur place des opérations, avant 
la certification (Ministère du 
Travail - FSE) 

(a) conseils et formation 
au niveau des 
bénéficiaires (Autorité 
d’audit – IGF, Ministère 
de l’Economie - FEDER, 
Ministère du Travail - 
FSE) 
(b) contrôles renforcés et 
audits sur place (Autorité 
d’audit - IGF, Min. du 
Travail-FSE) 
(c) simplification des 
règles (Min. Economie-
FEDER) 
(d) utilisation de listes de 
contrôle communes par 
les services de gestion 
(Min. du Travail-FSE) 

(a) offrir davantage de formations au 
personnel des services 
gestionnaires/nationaux/régionaux et 
des organes intermédiaires   
(Autorité d’audit - IGF, Min. du 
Travail-FSE) 
(b) offrir davantage de formations 
aux bénéficiaires (Autorité d’audit - 
IGF, Ministère de l’Economie - 
FEDER, Ministère du Travail - FSE) 
(c) prévoir la mise à disposition, par 
la Commission, de lignes directrices 
plus détaillées à l'intention des États 
membres (Autorité d’audit - IGF, 
Ministère de l’Economie - FEDER, 
Ministère du Travail - FSE) 
(d) autres suggestions - Simplifier le 
dispositif applicable en matière de 
marches publics (Ministère de 
l’Economie -FEDER) 

(a) listes de contrôle 
détaillées couvrant tous 
les risques d'irrégularité en 
ce qui concerne les 
dépenses (Autorité d’audit 
– IGF) 
(b) conseils spécifiques 
prodigués par la 
Commission concernant la 
portée des vérifications et 
l'étendue des contrôles à 
effectuer dans le cadre de 
l'audit des projets et 
rapport relatif aux résultats 
de celui ci (Autorité d’audit 
– IGF) 

OUI - Ministère de 
l’Economie                 
NON - Ministère du 
Travail 

Luxembo
urg 

YES - Etablissement d’un 
manuel de procédure 
pour les contrôles sur 
place. 
- Meilleure coordination 
des services concernés 
par la gestion des 
débiteurs (réunions 
mensuelles pour faire le 
point, revoir certains 
dossiers…). 
- Adaptations diverses 
des systèmes  
informatiques, notamment 
au niveau du SIPA 
(système d’identification 
des parcelles agricoles) 
- Participation de notre 
organisme de certification 
à l’initiative facultative 
Assurance renforcée 
concernant la légalité et la 
régularité des 
transactions au niveau 
des bénéficiaires finaux 
de la Commission 
européenne.  

77

 
 
 
 
Malta  

Netherlan
ds 

Poland 

YES - To improve the 
management and control 
system for agricultural 
expenditure and to 
enhance the effectiveness 
of controls, Malta has 
implemented information 
systems covering all 
measures under the 
program of rural 
development which 
includes measures for 
investments and services. 
Moreover Malta has 
recently issued a tender 
for the provision of 
specialised technical 
services to improve 
monitoring and control of 
projects. 

YES - Poland, similarly to 
other Member States, has 
been obliged since 2010 
to carry out an annual 
audit of the agricultural 
plots identification system, 
in accordance with 
Commission Regulation 
(EU) No 146/2010.  
In addition, since 2009 
measures have been 
implemented in Poland in 
order to improve the 
quality of the LPIS 
reference database by, 
amongst others, 
shortening the update 
period of the 
orthophotomap from 5 to 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring  
(c) increase on-the-spot 
verifications on operations 
before certification  

(d) any other suggestions 

(c) simplification of rules 

(c) more guidelines to be provided to 
Member States by the Commission  

(a) more training for staff 
of 
national/regional/managing 
authorities and  
intermediate bodies  

YES 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries   
(c) more detailed guidelines provided 
to Member States by the 
Commission 
(d) any other suggestions: 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(b) reinforce documentary 
checks on claims submitted by 
beneficiaries 
(c) increase on-the-spot 
verifications on operations 
before certification 
(d) any other suggestions - 
Create and maintain a stable 
legal framework and transparent 
and simple rules described in 
the national guidelines, backed 
up by detailed examples for 
each sector/group of projects. 

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and audits on the spot 
(c) simplification of rules 
(d) common checklists 
used by managing 
authorities 
(e) any other 
suggestions: 
- Identification of the 
provisions the 
amendment/simplification 
of which may lead to a 
smaller number of errors 
being made; 
- Creation of precise 
expenditure eligibility 

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies 
(b) more training to be provided for 
beneficiaries 
(c) more detailed guidelines to be 
provided to Member States by the 
Commission 
(d) any other suggestions: 
- Identifying the provisions the 
amendment/simplification of which 
may lead to a smaller number of 
errors being made, and making the 
relevant simplifications; 
- Creation and maintenance of a 
stable legal framework and 
transparent and simple rules 
described in the national guidelines, 
backed up by detailed examples for 

78

YES 

In accordance with Annex 
4.2 to the report, the 
general assessment of the 
Audit Authority in Poland 
has been issued under the 
category: effective. 

de montants soumis à 
des procédures bien 
définies: 

- fournitures très 
petites: sans aucune 
formalité. Cette 
fourchette pourrait 
aller, selon le niveau 
de prix du 
Luxembourg, jusqu'à 
5.000 €. Cela 
concerne surtout des 
fournitures courantes 
(restauration, 
consommables 
bureautiques) 
- une fourchette de 
5.000 à 20.000 €, 
pour lesquelles il y a 
lieu de demander des 
offres. 

There are still 
substantial benefits 
that can be derived 
from further 
simplification of EU 
Rules. 

In both cases there is 
potential for 
simplification; 
however: 
1) In the opinion of 
the Managing 
Authority of the 
Operational 
Programme Human 
Resources, the 
greatest potential for 
simplification exists in 
the Commission rules. 
Nevertheless, the 
simplifications 
introduced by the 
Commission often 
lead to problems with 
documenting the 

3) Yes, extensive or 
exclusive use  

(2) Yes, but minimal use 

 
 
 
  
  
  
  
  
  
  
  
  
rules to enable the 
beneficiaries to avoid 
errors in the application 
of those rules 

each sector/group of projects; 
- Preparation of a database of 
findings at EU level (an IT database 
with a search function) resulting in 
recommendations as regards the 
imposition of financial corrections. 
The database should contain a list of 
specific breaches, citing the specific 
provisions of EU legislation the 
breach of which has been detected 
and should contain a justification of 
the findings and a reference to the 
decisions of the European Court of 
Justice; 
- Creation of a closed list of 
irregularities that have a real effect 
on the market and the Community 
budget, at the same time refraining 
from the imposition of financial 
corrections if any errors of a purely 
formal nature are detected. 

4 years. The precision of 
the orthophotomaps is 
also being increased for 
almost half of the country, 
by changing the pixel 
resolution from 0.5m to 
0.25m. 
In addition, in 2009 and 
2010 the Agricultural 
Market Agency put 
forward an initiative at the 
25th Conference of the 
Directors of the Paying 
Agencies in Prague (22-
24.04.2009) and the 27th 
DAP Conference in 
Oviedo (28-30.04.2010) to 
make more precise the 
EU regulations relating to 
cooperation between the 
EU paying agencies in 
various Member States as 
regards the exchange of 
information (mutual 
support) for the purposes 
of the ex-ante control. It 
was proposed to create 
horizontal regulations or 
to add the relevant 
provisions to the 
Commission’s regulations 
governing the 
implementation of the 
CAP mechanisms 
introducing the 
requirement and possibly 
the terms of mutual 
assistance in order to 
carry out ex-ante (pre-
payment) control. This 
applies to the 
mechanisms under which 
agricultural products are 
[text missing] (and 
processed) within the EU. 
The introduction of such 
specific provisions would 
be aimed at putting in 
order and facilitating the 
implementation of the first 
pillar CAP mechanisms 
(mainly the so-called 
market mechanisms). 

expenditure incurred 
under the project. 
There is a serious risk 
that, in relation to any 
expenditure cleared 
as a lump sum, the 
auditors will require 
the submission of 
extensive 
documentation 
confirming the 
completion of the 
service/task under the 
project. This means 
that, instead of the 
accounting 
documents confirming 
the completion of the 
service/task, the 
beneficiaries will be 
obliged to prepare 
other, more extensive 
documentation 
confirming the said 
completion of the 
project. Therefore, in 
parallel with the 
simplification of the 
rules, detailed 
Commission 
guidelines will be 
required as early as at 
the preliminary 
implementation stage.

2) In the opinion of 
the Managing 
Authority of the 
Operational 
Programme 
Innovative Economy, 
the simplification of 
the implementation of 
EU programmes is 
more straightforward 
and quicker in terms 
of the national rules. 
This is due to the 
lengthy process of 
amending the EU 
rules, which then 
entails a complex 
process of 
implementation at the 
national level (i.e. 
amendments to the 
durability rules or 
lump sums). It is 
simpler and quicker to 
amend the national 
rules, as a result of 
which the EU 
programmes can be 
implemented more 
efficiently.  

Portugal 

YES - Following DG 
AGRI's audits of area aid 

YES - The ESF 
Information System 

In Portugal, national 
rules are designed to 

(3) Yes, extensive or 
exclusive use - In the new 

79

 
 
 
  
  
  
  
  
and rural development 
measures,  carried out as 
part of conformity 
clearance, Portugal 
implemented a substantial 
set of measures, 
including, in particular, the 
following:  
• Implementation of the 
LPIS-GIS Action Plan in 
2010 and 2011, with the 
aim of correcting the 
deficiencies identified by 
DG AGRI. As part of this 
work, ortho-photo maps 
from 2010 were used to 
update the system.  
• As part of the action plan 
for on-the–spot checks, 
the delays in checks for 
2007, 2008 and 2009 
were made up for and on-
the-spot checks for 2010 
were carried out by the 
end of that year;  
• 2011 on-the-spot checks 
were carried out in a 
timely fashion in the 
course of that year. 

programming period the 
national authorities intend to 
extend application of the 
simplified costs systems, 
ensuring widespread 
application of the systems 
set up at Community level. 

follow the procedures 
established by 
Community 
legislation, therefore 
the simplification 
decided at 
Community level will 
certainly have an 
impact on the ESF 
management system, 
in particular as 
regards the 
procedures laid down 
for beneficiaries. 

(SIIFSE) was a key 
instrument of 
simplification 
implemented in 
Portugal in this 
programming 
period. It is an 
integrated system, 
covering all ESF 
Operational 
Programmes and 
is used by all ESF 
managing 
authorities, 
intermediate 
bodies, certification 
authorities and 
beneficiary 
organisations.  It 
incorporates all the 
relevant functions 
and information for 
management, 
certification, follow-
up, physical and 
financial 
monitoring, 
assessment, 
control and audit 
operations. All 
projects are 
entered in the 
system by the 
beneficiary 
organisations, 
thereby ensuring 
that all the 
information is 
stored 
electronically and 
that the whole 
management 
process is 
automated.  As all 
the information 
flows are 
automated, the 
quality and 
reliability of the 
data is fully 
guaranteed.  
As part of the 
Community 
process for 
simplifying access 
to the ESF, new 
forms of 
declaration of 
eligible costs were 
adopted, extending 
the procedure for 
detailed statement 
of costs to 
standard scales of 
unit cost.   In this 
context, in 2010, 
the process of 
implementing the 
unit cost system 

80

 
 
started to be 
applied to 
applications for 
vocational courses 
and 
education/training 
courses.  This will 
help to simplify 
procedures 
considerably, with 
a resulting 
reduction in the 
administrative 
burden involved in 
project 
management and a 
positive impact on 
beneficiaries. This 
is an innovative 
financing system, 
with an impact on 
the management 
system and the 
accountability 
rules, requiring all 
stakeholders - from 
the beneficiary 
organisations to 
the bodies 
responsible for the 
management and 
control system - to 
adapt their working 
methods in order to 
simplify the 
financing process, 
without prejudice to 
the legality and 
regularity of 
expenditure.   

Romania 

YES - (APDRP) 
1) debt compensation 
between EAGF and 
EAFRD; 
2) surface area cross 
checks between the 
surface areas recorded at 
APIA and those in the 
Agricultural Land 
Register, on the basis of 
documents and access to 
the IACS database;  
3) using the portal of the 
National Trade Register 
Office - Insolvency 
Proceedings Bulletin (BPI) 
- general information - 
persons published in BPI. 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring; 
(ACIS + ACP) [Coordinating 
Authority for Structural Funds + 
Certification and Payment 
Authority] 
(b) reinforce documentary 
checks on claims submitted by 
beneficiaries; (ACIS) 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies;  
(ACIS + ACP) 
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries; (ACIS) 
(c) more detailed guidelines be 
provided to Member States by the 
Commission; (ACP)   

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies; 
(ACIS + ACP) 
(b) more training to be provided for 
beneficiaries; (ACIS) 
(c) more guidelines to be provided to 
Member States by the Commission; 
(ACP) 

(a) guidance and training 
at the level of 
beneficiaries; (ACIS + 
ACP) 
(b) reinforced controls 
and audits on the spot; 
(ACIS) 
(c) simplification of rules; 
(ACIS) 
(d) common checklists 
used by managing 
authorities; (ACIS + 
ACP) 

(d) additional staff 
resources; (Audit 
Authority) 

YES - (ACIS + 
DGDR)                       
NO - (APDRP) 

(2) Yes, but minimal use 
(ACIS + DGDR) 

(APDRP) Commission 
(EU) rules: 
- reporting 
requirements have 
different deadlines 
and cover different 
periods, so Member 
States are asked to 
provide some reports 
covering the calendar 
year and others the 
financial year, which 
implies a complicated 
monitoring system;  
the contents of the 
reports change 
frequently and this 
implies changes in the 
computerised 
systems, with direct 
consequences for the 
additional costs 
incurred by the 
Member States and 
resulting in non 
uniform monitoring 
arrangements. 

81

 
 
(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(b) reinforce documentary 
checks on claims submitted by 
beneficiaries 
(c) increase on-the-spot 
verifications on operations 
before certification  

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries  
(c) more detailed guidelines be 
provided to Member States by the 
Commission 

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and audits on the spot 
(c) simplification of rules, 
where appropriate  

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies  
(b) more training to be provided for 
beneficiaries 
(d) any other suggestions  

(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings 
(f) any other suggestions 

Slovakia 

YES - Section 3.59. As 
regards non-IACS 
measures in the area of 
Rural Development, the 
Slovak Republic adopted 
an amendment to the 
Public Procurement Act 
No 158/2011, which also 
amends Act No 25/2006, 
with a view to improving 
the effectiveness of the 
management and control 
systems for agricultural 
expenditure through 
changes to Slovak 
legislation. 

82

(1) No   
(3) Yes, extensive or 
exclusive use - For certain 
measures under the rural 
development programme, it 
is suitable to use lump sums 
or flat rates; however, it will 
be necessary to ensure a 
suitable proportion of 
simplification and obligation 
on the part of the Member 
States to verify the eligibility 
of expenditure and to ensure 
protection of EU financial 
interests. It depends on the 
results of a SWOT analysis 
whether the Slovak Republic 
will implement more 
measures under the 2014-
2020 rural development 
programme for which lump 
sums or flat rates are 
suitable. 

Both EU rules and 
national rules should 
be simplified (DGDR) 

State aid area 
EU rules on the basis 
of which the national 
rules are created, 
such as in the area of 
state aid where 
"double approval" is 
currently being 
applied for measures 
that are also subject 
to state aid schemes. 
Such measures are 
approved under the 
rural development 
programme as well as 
under a state aid 
scheme. 
Direct payments: 
Slovakia suggests 
that the Commission 
rules be simplified (in 
particular in the area 
of cross-compliance –
specifically, statutory 
management 
requirement 10 
should be abolished 
and statutory 
management 
requirement 11 
should be simplified 
by linking the 
conditions to primary 
agricultural production 
so that applicants 
would be penalised 
only for the 
infringement of those 
conditions laid down 
by law which they are 
able to affect by their 
production activities. 
We also propose that 
statutory 
management 
requirements 12-15 
and the statutory 
management 
requirements 
concerning bird 
protection be 
abolished and the 
number of GAEC 
requirements be 
reduced from 15 to 8, 
which would result in 
shorter on-the-spot 
checks, as well as 
abolition of ex-post 
controls in case of 
minor infringements 
and the application of 
de minimis). 

YES - Document 
"Problematic areas 
of implementation 
of operational 
programmes and 
horizontal priorities 
of the National 
Strategic Strategic 
Reference 
Framework – new 
version”. 
In cooperation with 
the Slovak Ministry 
of Finance, the 
Central 
Coordination Body 
drew up this 
document with a 
view to providing 
the Slovak 
Government, 
relevant entities 
and the general 
public with 
comprehensive 
information on the 
problematic areas 
of implementation 
of operational 
programmes and 
horizontal priorities 
of the National 
Strategic Strategic 
Reference 
Framework. For 
each problematic 
area identified, a 
description of the 
facts is given, as 
well as of the 
specific tasks that 
need to be 
performed in order 
to improve the 
situation identified. 
Successful 
completion of all 
the tasks defined 
should definitely 
help speed up the 
implementation 
and make it more 
effective; it should 
also make the 
access to EU funds 
easier for the 
general public and 
thus speed up their 
implementation 
and their impact on 
the Slovak 
economy, while 
complying with the 

 
 
 
principles of 
transparency and 
sound financial 
management. 
Under the 2007-
2013 Slovak Rural 
Development 
Programme, the 
Slovak Republic 
adopted a series of 
measures which to 
a certain extent 
simplify the 
implementation of 
the procedures 
involved in the 
implementation of 
the programme. 

NO 

Member State rules 
are more likely 
candidates for 
simplification than 
Commission rules. 

(3) Yes, extensive or 
exclusive use  

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring  
(c) increase on-the-spot 
verifications on operations 
before certification  

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries 
(c) more detailed guidelines to be 
provided to Member States by the 
Commission  

(a) guidance and training 
at the level of 
beneficiaries  
(b) reinforced controls 
and audits on the spot  
(c) simplification of rules  

(a) more training for staff of 
national/regional/managing 
authorities and intermediate bodies  
(b) more training to be provided for 
beneficiaries  

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure  
(d) additional staff 
resources  
(e) re-structuring of 
training for audit 
authorities  

83

Slovenia 

YES - Among the major 
improvements to the 
effectiveness of controls 
in the field of rural 
development we should 
mention first and foremost 
the introduction of 
electronic filing for 
measures under axis 1 of 
the Rural Development 
Programme. To speed up 
the management of 
applications and make it 
more effective, the 
Managing Authority for 
the Rural Development 
Programme in the 
Republic of Slovenia for 
the period 2007-2013 
devised the electronic 
filing ("e-PRP") pilot 
project for measure 121 - 
Modernisation of 
agricultural holdings – in 
2010. As a result of the e-
PRP pilot project, less 
time is spent on carrying 
out administrative controls 
as applicants make fewer 
mistakes when preparing 
their applications 
electronically, 
considerably reducing the 
work of the paying agency 
and ensuring that the 
controls are effective. At 
the same time, e-PRP 
allows data and 
documents from the 
official records to be 
checked. 
In 2011 the Managing 
Authority extended the 
use of e-PRP to other 
measures under axes 1 
and 3 of the Rural 
Development Programme 
for 2007-2013. The 
following phase of 

 
 
improvements planned by 
the Managing Authority is 
the adjustment of e-PRP 
for the entry of payment 
applications. 
As regards measures 
under axis 2 of the Rural 
Development Programme, 
Slovenia has considerably 
improved the quality of 
the findings of on-the-spot 
inspections and use of the 
system of sanctions by 
updating the list of 
infringements and 
sanctions in respect of 
agri-environmental 
measures. For payments 
in less-favoured areas, 
however, the Managing 
Authority has introduced a 
new method of calculation 
based on a points system 
for bio-physical criteria on 
individual farms. 
The quality of on-the-spot 
inspections is under the 
constant supervision of 
the paying agency. We 
organised training 
courses for inspectors 
every year during the 
2007-2011 period, thus 
increasing the quality of 
inspection. When 
requirements are more 
exacting, the paying 
agency hires judicial 
experts from various 
fields. 
The inspection findings for 
all measures under the 
Rural Development 
Programme for 2007-
2013 contained in the 
report referred to in Article 
34 of Regulation No 
1974/2006 are regularly 
discussed at the 
headquarters of the 
Managing Authority, 
which judges the 
percentage of errors 
detected from a number 
of angles, including 
possible changes at 
programme level. 

YES - 1710. The Action 
Plan to improve LPIS-GIS 
updating submitted to the 
Commission includes a 
methodology for 
calculating and assigning 
an eligibility coefficient in 
LPIS-GIS recintos used 
as pasture land. The 
results obtained in the 

Spain 

(a) reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring 
(d) any other suggestions: 
Simplify and clarify the 
applicable rules 

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries   
(c) more detailed guidelines be 
provided to Member States by the 
Commission 

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and audits on the spot 
(c) simplification of rules 
(d) common checklists 
used by managing 
authorities 
(e) any other 

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies 
(b) more training to be provided for 
beneficiaries 
(c) more guidelines to be provided to 
Member States by the Commission 
(d) any other suggestions: Clarify the 
rules by reducing imprecise legal 
concepts and the possibility of 

(a) detailed checklists 
which cover all risks to the 
regularity of expenditure 
(b) specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 
projects and the reporting 
of audit findings 

YES 

In EU rules. 

(2) Yes, but minimal use 
(3) Yes, extensive or 
exclusive use 

84

 
 
suggestions: Guidance 
and training of control 
bodies 

subjective interpretations. 

(b) reinforce documentary 
checks on claims submitted by 
beneficiaries  
(c) increase on-the-spot 
verifications on operations 
before certification  

(a) more training for staff in 
national/regional/managing 
authorities and intermediate bodies  
(b) training which specifically targets 
national/regional authority staff and 
beneficiaries  

(a) guidance and training 
at the level of 
beneficiaries 
(b) reinforced controls 
and audits on the spot  
(c) simplification of rules  

(a) more training for staff of 
national/regional/managing 
authorities and  intermediate bodies  
(b) more training to be provided for 
beneficiaries  

No selected options. 

YES 

EU rules 

(3) Yes, extensive or 
exclusive use 

Sweden 

different Autonomous 
Communities are being 
analysed with a view to 
adopting the final decision 
on introduction of the 
methodology. Thus, for all 
the CAP measures, 
periodic reviews are 
carried out of control 
procedures, taking into 
account the comments by 
both the Court of Auditors 
and the European 
Commission during visits 
to Spain. 

YES - EAGF:  
- Mobile check on 
animals. The aim is to 
increase effectiveness, 
the result being speedier 
checks.  
- Full-day conference 
organised by the Swedish 
Board of Agriculture in 
conjunction with the 
country administrative 
boards to discuss 
pasturage/crops on 
pastureland and arable 
land for the purposes of 
inspection operations. 
There is also, in this 
context, a direct link to the 
Rural Development 
Programme. 
- The change to the IACS 
Regulation (No 
1122/2009) would involve 
reduced frequency of 
checks if there were an 
operational updating of 
the block database. This 
would not, however, have 
any practical significance 
for the on-the-spot checks 
if there were no 
corresponding change to 
the controls Regulation for 
the Rural Development 
Programme (No 65/2011).
EAFRD:  
- During 2010 the 
Swedish Board of 
Agriculture conducted a 
review of the Audit Unit’s 
checks under the Rural 
Development Programme.  

UK 
Scotland 
(S) 
Wales 
(W) 
Northern 
Ireland 

YES - RPA: We have 
been working generally to 
improve our processes in 
light of recent audit 
criticism. In particular we 
have major projects 
underway in the area of 
actual cost capital 
projects and the update of 

(a)  reinforce guidance to 
beneficiaries to prevent 
irregularities from occurring - 
Northern Ireland (NI) , 
Department for Business, 
Innovation and Skills (BIS), SE 
(b)  reinforce documentary 
checks on claims submitted by 
beneficiaries - NI  

(a)  more training for staff in 
national/regional/managing 
authorities and intermediate bodies - 
NI, BIS, SA 
(b)  training which specifically targets 
national/regional authority staff and 
beneficiaries - BIS 

(a)  guidance and 
training at the level of 
beneficiaries – NI, SA 
(b)  reinforced controls 
and audits on the spot – 
NI, BIS, SA 
(c)  simplification of 
rules, where appropriate 
BIS, SA 

(a)  more training for staff of 
national/regional/managing 
authorities and  intermediate bodies - 
NI 
(b)  more training to be provided for 
beneficiaries – NI, SA 
(c)  more guidelines to be provided 
to Member States by the 
Commission - NI 

(a)  detailed checklists 
which cover all risks to the 
regularity of expenditure - 
BIS 
(b)  specific guidance by 
the Commission on the 
scope of verifications and 
the extent of checks to be 
undertaken for the audit of 

YES with the 
comments:                 
NI, HMRC: The UK 
are currently 
working on, for 
introduction in 
2012, an I-form 
with pop-up help 
text, which will 

RPA: Both have 
extensive scope for 
simplification from a 
Paying Agency 
perspective. 

HMRC: In EU rules. 
Member States are 
bound by them and 

The UK answered with:            
(2) Yes, but minimal use - 
BIS, SA 
(3) Yes, extensive or 
exclusive use - RPA, NI 

85

 
 
 
the quality of the LPIS.   

(c)  increase on-the-spot 
verifications on operations 
before certification - NI, BIS 

(d)  common checklists 
used by managing 
authorities SA 

(d)  any other suggestions – BIS - 
The procurement rules must be 
simplified and made easier to 
implement for officials and 
beneficiaries  

projects and the reporting 
of audit findings SA 
(c)  the use of  standard 
sampling methodology 
(d)  additional staff 
resources - NI, BIS 

Her 
Majesty’s 
Revenue 
Customs 
(HMRC) 
Rural 
Payment 
Authority 
(RPA) 
Departme
nt for 
Business, 
Innovatio
n and 
Skills 
(BIS) 
Departme
nt for 
Communi
ties and 
Local 
Governm
ent (CLG) 
Departme
nt for 
Internatio
nal 
Develop
ment 
(DfID) 

have little or no 
flexibility in their 
application which 
restricts Member 
States ability to offer 
simplifications to 
businesses. The UK 
also sees the 
potential to extend 
AEO benefits through 
further simplifications 
in the future; 
examples from the 
MCC include full 
guarantee waiver for 
AEO (C) and AEO (F) 
and also the 
possibility of entry into 
records, self 
assessment and 
centralised clearance 
as further areas of 
benefit. 

EU rules. NI, SA, BIS 
(particularly 
Procurement and 
State Aids) 

considerably assist 
UK exporters in 
applying to 
become approved 
exporters for the 
purposes of issuing 
simplified proofs 
origin under the 
EU's preferential 
trade 
arrangements. It 
will also assist 
HMRC as the help 
text will ensure that 
exporters provide 
all required 
information in the 
first instance, 
thereby doing 
away with the need 
for our approvals 
office to request 
further information.

SA: The Scottish 
Government has 
introduced a pilot 
project using 
simplified costs, 
however, changing 
the regulations part 
way through a 
programming 
period does not 
simplify the 
delivery of the 
programme it 
increases the 
complexity.                

NO with the 
comment:                   
RPA: Not initiatives 
per se but we have 
contributed to the 
Learning Network 
of EU Paying 
Agencies which 
has been preparing 
suggestions for the 
Commission on the 
simplification 
agenda. 

86

 
 
 
                                  
 
Member State  Reply 

ANNEX III B – GENERAL REMARKS 

Bulgaria 

Bulgaria is pleased to note the Court of Auditors’ finding that “the annual accounts of the European Union present fairly, in all material respects, 
the financial position of the Union as of 31 December 2010 and the results of its operations and its cash flows for the year then ended”;  
Nevertheless we feel that by further improving the quality of financial reporting and the underlying information systems the risks associated with 
handling EU resources could be further reduced. We therefore second the Court’s recommendation to the European Commission that it revisit the 
accounting rules and take further action to ensure that the necessary information is available to improve the Commission’s supervision of those 
financial engineering instruments, advance payments, etc.  
In contrast, we are concerned about the Court’s finding that the payments underlying the accounts were still affected by material error (with an 
estimated error rate of 3.7% for the EU spending as a whole, or EUR 122.2 billion) because the expenditure rules have not been observed and 
control systems were still only partially effective in ensuring the regularity of payments, even though the national systems in place are constantly 
being improved and updated in line with the ever changing strategic, economic and financial climate. 
In our view the European Commission and the Member States ought to continue monitoring the regularity of their operations, in particular in the 
Cohesion, energy and transport group of policy areas, which  was the  most error prone and whose performance actually declined compared  to 
2009 (7.7% in 2010 against more than 5% in 2009). In our view the Court’s recommendations to improve the quality of accounting in areas of 
shared  management  are  very  useful  indeed.  We  would  nonetheless  like  to  receive  more  detailed  information  from  the  Court  regarding  these 
errors, the underlying causes and their financial impact on the EU budget.   
We are concerned that the Court has found grounds to issue a negative opinion about the legality and regularity of the payments underlying the 
accounts and has found that the estimated error rate for Agriculture and natural resources had increased to 2.3%, owing mainly to obsolete data 
regarding plot sizes in the database and weaknesses in the scrutiny of plot measurements by national inspectors in some of the countries visited, 
including Bulgaria. The Bulgarian national administration will take the necessary measures to remedy this problem 
We are pleased that the Court finds the revenue and commitments underlying the EU accounts for the year ended 31 December 2010 legal and 
regular in all material respects. 

87

 
 
 
Denmark 

Denmark finds it satisfactory that every year since the Statement of Assurance was introduced, with effect from 1994, the Court of Auditors has, 
with  some  reservations,  considered  the  EU's  accounts  to  give  a  true  and  fair  picture  of  the  revenue,  expenditure  and  financial  position  of  the 
Communities. On the whole, therefore, this part of the Statement of Assurance has been positive every year and has been without reservations for 
the past four years. 
Denmark finds it unsatisfactory that the Court of Auditors again had to give an unfavourable statement of assurance on the legality and regularity 
of payments under the two main areas of expenditure, where management is shared between the Commission and the Member States. After all, in 
view  of  the  progress  made  in  the  financial  management  and  control  of  the  budget  in  recent  years,  there  are  grounds  for  a  certain  degree  of 
optimism regarding the possibility of having a statement of assurance with continually fewer reservations. 
The new chapter in the annual report on Getting results from the EU-budget is welcome. The chapter reinforces the much-needed possibility of an 
improved and more practical linkage of the evaluation of results and regulation/budgeting in the various policy areas.  
Denmark  also  welcomes  the  fact  that  the  Court's  presentation  of  the  audit  findings  has  become  more  precise  in  recent  years.  This  applies  in 
particular to: publication of the most likely error rates for revised payments; incorporation of the Commission management representations and 
the Court's special reports in the appropriate chapters of the annual report; and the more detailed description of the audit approach and method. 
This  clearer  presentation  strengthens  the  scope  for  remedying  shortcomings  in  budget  implementation  and  the  quality  of  expenditure,  and  for 
determining the extent to which necessary progress is made over the years.  

Council discharge  
During  the  Council's  forthcoming  discussion  of  the  Court  of  Auditors'  annual  report,  Denmark  will  attach  importance  to  factors  which  can 
contribute to continued progress concerning both the programming, management and control of the EU's spending budget and proof of the value 
added that the expenditure contributes at European level.  
In view of the Court's critical comments and the Commission's replies thereto, Denmark considers it important to pay particular attention to the 
following aspects during the Council's discussion of the annual report:  
New – possibly more simplified – legislation as a basis for further progress (you are also referred to the discussions on the multiannual financial 
framework and the basis for this in sectoral law). 
Value added (cost/benefit) by current or modified management and control requirements (you are referred to the discussions on tolerable risk).  
Further  information  on  error  rates,  types  of  error  and  financial  losses  in  areas  that  are  difficult  to  administer  (e.g.  regional  development  aid, 
cohesion and public procurement) in order to pinpoint and remedy shortcomings in budget implementation. 
Reliability of information on recovery and financial corrections. There is also a need for a more detailed presentation of regulatory mechanisms 
and results in this sector (see recommendations in previous Council discharges). 

88

 
 
 
 
Finland 

Ireland 

More attention should be paid to the clarity of EU legislation; it is easy to make unintentional errors of interpretation. Working documents should 
be open and public so that they can be accessed by the general public and also by the beneficiaries. The preparation of EU legislation should be 
more efficient and FAQ lists should be provided to avoid misunderstandings. 
In the cohesion, energy and transport policy area, the Court of Auditors found that there was an error in 49% of the sample of 243 payments it 
tested. According to the Court of Auditors, 42% of the errors could not have been detected or corrected by the authorities of the Member States 
prior to certifying the expenditure to the Commission (see § 4.24 and 4.25). Considering that the most likely error rate as estimated by the Court 
of Auditors is 7.7%, it is unlikely that the Member States could achieve an error rate of under 2% prior to certifying the expenditure to the 
Commission. The management and control systems also include on-the-spot checks, which are the responsibility of the Member States. On-the-
spot checks can also be conducted at a later stage in the project lifecycle, after certifying the expenditure. However, these measures do not affect 
the error rate reported by the Court of Auditors, as the error rate is determined prior to ex-post monitoring and corrective measures. The full 
impact of the control system on reducing the error rate is usually only seen in subsequent years, after all layers of controls have been 
implemented. 

• 
• 

Ireland welcomes the ECA 2010 annual report.  
In relation to Cohesion Policy, Ireland notes that, for the second consecutive year, the level of error remains well below those reported by 
the Court in the period 2006-2008.  Ireland considers that this is a positive development and a reflection that the provisions in the 2007-
13 regulatory framework are working.   

•  The  multi-annual  programme  feature  of  Cohesion  funding  is  a  factor  that  needs  to  be  taken  into  account  in  that  irregularities  are 
subsequently removed in future applications for payment and thus the EU Budget is not compromised.  Any analysis of a given year can 
only be completed at the end of the programming period and the closure process. 

•  The  issue  of  interpretation  of  procurement  rules  continues  to  be  the  biggest  factor  and  Ireland  would  welcome  greater  clarity  on  the 

• 

application on this issue in EU Cohesion programme implementation. 
Ireland will continue to work in partnership with the Commission services and the ECA to ensure sound financial management of EU 
Funds.    However,  a  balance  has  to  be  struck  between  this  objective  and  the  effective  implementation  of  EU  Cohesion  Policy  as  an 
important tool in the response to the unprecedented economic and financial crisis the Union is facing.  Ireland wants to ensure that the 
financial management and control process does not become top heavy, impose a disproportionate administrative burden and lose sight of 
the objectives of simplification and proportionality. 

89

 
 
 
 
Hungary 

We are pleased that the European Court of Auditors (hereinafter ‘the ECA’) again issued an unqualified opinion regarding the reliability of the 
report for the financial year 2010 and that, according to the Court’s assessment, the report provides a picture of the financial situation of the EU, 
outlining its operational and financial results, which is accurate from every essential point of view. 

With regard to the legality and conformity of the underlying transactions, we regret that, compared with the previous year, the rate of the most 
common  irregularities  relating  to  payments  in  general  has  increased  slightly.  However,  in  our  opinion,  this  does  not  provide  a  basis  to  draw 
long-term  conclusions  regarding  the  trend  of  the  rate  of  irregularities.  Making  a  judgment  is  further  hindered  by  the  fact  that,  compared  with 
previous years, the set of chapters examined in the report has changed and that the sampling model applied in the case of certain chapters was not 
standard,  in  that,  while  only  intermediate/final  payments  were  examined  in  the  areas  of  ‘Agriculture  and  Natural  Resources’  and  ‘Cohesion, 
Energy  and  Transport’,  in  the  sampling  model  applied  to  ‘External  Aid,  Development  and  Enlargement’  and  ‘Research  and  Other  Internal 
Policies’ advance payments accounted for almost 50%. 

We  welcome  the  changes  in  the  report  in  the  section  concerning  ECA’s  audit  methodology,  which  are  very  helpful  in  understanding  the 
irregularity rates used in the report.  

Our general opinion regarding the structure and contents of the report is that, even though the scope and level of detail of the report are generally 
appropriate,  the  deficiencies  noted  are  described  in  general  terms  and  this  does  not  offer  enough  help  to  either  the  Member  States  or  the 
Commission  as  regards  the  adoption  of  suitable  measures  to  remedy  them.  However,  we  find  it  useful  that  several  chapters  of  the  report  also 
contain specific examples of identified irregularities related to the underlying transactions.  

In view of the questions of general nature, as posed in this annex II, The Netherlands would like to use this space of the questionnaire to reiterate 
its  support  to  the  Commission  for  all  its  attempts  to  improve  the  management  of  EU  funds  in  shared  management,  where  90%  of  errors  take 
place:  the  responsibility  for  improvement  lies  mainly  with  the  Member  States.  Therefore,  it  would  in  our  view,  greatly  help  the  efforts  of  the 
Commission,  if  the  annual  discharge  procedure  was  accompanied  by  transparent  data  for  the  Council/Budget  Committee  that  would  allow 
identifying best practices in Member States, but also identify (geographical) problem areas and weaknesses in the performance of Member States 
more precisely than is now the case. How to proceed in detail is open to discussion of course, but the general idea is that Member States should 
know more about each others performance in this respect (regularity/error rates). The resources from the EU budget are public EU resources.  

Simplification of rules and regulations, together with clearer definitions, will also reduce errors in our view.  

Netherlands 

90

 
 
 
 
Poland 

Portugal 

The annual report for 2010 indicates that the number of errors regarding the EU budget expenditure under the Cohesion Policy has increased. It 
should  be  remembered,  however,  that  the  total  payments  made  in  2010  were  almost  10%  higher  than  in  2009,  and  a  significant  part  of  those 
payments  relates  to  the  2007-2013  programming  period  (which  means  an  increased  number  of  beneficiaries,  including  beneficiaries  who  are 
inexperienced in the implementation of EU projects). In addition, it should be noted that in 2010, the advance payments under the programmes 
implemented as part of the Cohesion Policy decreased significantly by comparison to 2009. 
These facts had to translate into a certain increase in the error rate. That rate is still however lower than in the reports in respect of 2007 and 2008. 
In addition, it should be remembered that, as concluded by the Commission, some of those errors do not have any financial effect, and the general 
error rate under the Cohesion Policy does not exceed the 2006-2008 levels. 
Poland will participate actively in the debate on the acceptable error rates as regards the spending of monies from the EU budget but, above all, 
will endeavour to ensure that the monies expended in our country are free from any irregularities. 
As regards the EFF, no initiatives were introduced in Portugal addressed at simplifying the application of EU programmes in the 2007—2013 
programming period because of the complexity of the system required by the Community authorities. Compared to previous situations, there are 
an increasing number of complex administrative and procedural requirements and also high standards for operating information, management and 
control systems that seriously delay the start of the cofinanced programmes. This means that the supposed delegation of functions to the Member 
State,  seen  as  shared  management,  is  increasingly  complex  and  is  hindering  implementation  of  the  programmes  which  come  up  against  the 
automatic cancellation rule (commonly known as the "n + 2 rule"). 
Both the Commission and the Member States should consider greater simplification of the current rules. In fact, the national eligibility rules for 
the EFF are in general stricter/more specific than those at EU level. This is basically justified by the exigencies of applying policy, such as the 
fisheries common policy, in which the rules are stringent and call for constant monitoring on the part of the Member States. 

91

 
 
 
Spain 

We would highlight the following aspects of the Court's findings: 

•  The Court performed controls on 20 operations, in which aid amounting to €947.57 millio n was analysed. €2.7 million of this amo unt 

(0.29% of the total verified) was found to relate to irregular aid. 
However,  this  is  not  the  calculation  method  used  by  the  Court  to  establish  the  error  rate  included  in  its  report  on  the  Statement  of 
Assurance.  
Historical analysis of the sample selection method and the calculation method used to determine the error rate indicates that the rate is 
close to a simple average of the individual error rates of each operation controlled. The resulting error rate is 17.55% for Spain. 

•  The findings include an uneven distribution of errors by type of project. Thus, a simple analysis of the operations controlled shows that 
the  largest  error  rates  are  detected  by  the  Court  in  those  involving  the  lowest  amounts,  whereas  the  error  rate  of  those  relating  to  the 
highest amounts is virtually zero.  There is no evidence that the Court has taken this fact into account in its analysis. The result is an 
extrapolation of the error rate of the small projects to the whole of the aid received, regardless of the project type or size or of the body 
responsible  for  managing  them.  In  our  view,  this  method  of  extrapolating  results  means  that  the  resulting  error  rate  cannot  give  an 
accurate indication of how well Community funds are managed by the managing bodies. 

• 

• 

In some cases, the Court's findings do not relate to manifest non-compliance  with a rule but rather are based on interpretations of the 
audit team without providing a clear legal basis in support of these findings. 
In any case, the Court of Auditors' analysis of the multiannual nature of the operational programmes should take into account the fact that 
the  ERDF  and  Cohesion  Fund  rules  provide  for  measures  to  be  taken  by  the  audit  authority  with  a  certain  time  lag  in  relation  to  this 
analysis. 

UK 

BIS: The main comment about the report is the fact that every year these Annexes do not indicate properly which programmes are subject to 
audit visits in the year concerned. 

UK Co-ordinating Body: A significant factor in the failure to achieve a positive statement of assurance regarding the legality and regularity of 
the  underlying  transactions  under  the  agricultural  funds  is  the  extremely  complicated  and  sometime  subjective  nature  of  many  of  the  scheme 
eligibility criteria, which leads to errors by both claimants and national administrations.   The draft CAP reform proposals raise the prospect of 
the schemes becoming even more complex, leading to an increase rather than a reduction in the error rate as well as a significant rise in the costs 
of control.  Every effort should therefore be made during forthcoming negotiations to make the scheme rules as simple as possible and to set a 
realistic timetable for the implementation of the changes. 

The  revised  Financial  Regulation  and  draft  sectoral  regulations  introduce  a  requirement  for  the  audit  of  legality  and  regularity  at  the  level  of 
Member  States.    Whilst  this  could  in  principle  help  to  identify  areas  where  there  are  high  error  rates,  there  is  no  agreement  yet  on  what 
methodology for this audit should be used.  There is a risk that the Commission’s approach will not be proportionate or risk-based and will differ 
from that of the ECA.  It may not therefore help to achieve a positive statement of assurance. 

92

 
 
 
 
 
93