REPORT FROM THE COMMISSION ANNUAL REPORT ON THE COHESION FUND (2011)
Date: 2012-11-07
Institutions: European Commission
Subjects: Cohesion Fund, audit, financial year

EUROPEAN 
COMMISSION 

Brussels, 7.11.2012 
COM(2012) 642 final 

REPORT FROM THE COMMISSION 

ANNUAL REPORT ON THE COHESION FUND (2011) 

{SWD(2012) 362 final} 

EN 

   EN 

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

Financial execution of the 2000-2006 period in 2011 and closure of projects……….1 

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

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

Irregularities notified by the Member States…………………………………………8 

Evaluation…………………………………………………………………………….9 

Information and publicity…………………………………………………………...10 

 
 
 
 
 
This  report  is  presented  in  conformity  with  Article  14(1)  of  Regulation  (EC)  No 1164/1994 
and covers the implementation during 2011 of Cohesion Fund projects adopted in the 2000-
2006  programming  period  as  well  as  ex-ISPA  projects  and  those  Cohesion  Fund  projects 
approved  or  submitted  in  the  1994-1999  programming  period  that  continued  to  be 
implemented in the 2000-2006 period. The information provided is limited to the 2000-2006 
period  as  Regulation  (EC)  No  1084/2006  establishing  a  Cohesion  Fund  and  repealing 
Regulation (EC) No 1164/1994 does not require the presentation of an annual report on the 
Cohesion Fund for the 2007-2013 programming period. 

As  a  consequence,  this  report  covers  Cohesion  Fund  operations  in  the  fifteen  beneficiary 
Member States - thirteen that were Member States at the end of 2006 (i.e. Cyprus, the Czech 
Republic,  Estonia,  Greece,  Hungary,  Latvia,  Lithuania,  Malta,  Poland,  Portugal,  Slovakia, 
Slovenia and Spain), as well as ex-ISPA projects adopted in the 2000-2006 period in Bulgaria 
and Romania, which joined the European Union on 1 January 2007. It must be recalled that 
Ireland’s economic growth has made it ineligible since 1 January 2004; nevertheless, ongoing 
Cohesion Fund projects still await closure. 

Details on the implementation, monitoring and audit in 2011 of projects adopted in the 2000-
2006  period  for  each  beneficiary  Member  State  are  presented  in  the  Commission  Staff 
Working Document accompanying this report. 

1. 

FINANCIAL  EXECUTION  OF  THE  2000-2006  PERIOD  IN  2011  AND  CLOSURE  OF 
PROJECTS 

The Member States eligible for the Cohesion Fund support can be divided into three groups: a 
group  of  four  Member  States  eligible  from  the  beginning  of  the  2000-2006  programming 
period (EU-4: Greece, Ireland, Portugal and Spain), a second group of ten Member States that 
joined the European Union in May 2004 (EU-10: Cyprus, Czech Republic, Estonia, Hungary, 
Latvia,  Lithuania,  Malta,  Poland,  Slovakia,  Slovenia),  and  the  two  Member  States  (EU-2: 
Romania and Bulgaria) that joined the European Union in January 2007. 

Table 1: Number of Cohesion Fund projects per Member State and per sector 

Member State 

Greece 
Ireland 
Portugal 
Spain 
EU-4 
Cyprus 
Czech Republic 
Estonia 
Hungary 
Latvia 
Lithuania 
Malta 
Poland 
Slovakia 
Slovenia 
EU-10 
Bulgaria 
Romania 
EU-2 
TOTAL 

Transport 

Environment 

Mixed 

Technical 
Assistance 

30 
6 
34 
80 
150 
1 
13 
10 
9 
14 
17 
1 
25 
6 
8 
104 
5 
12 
17 
271 

92 
4 
72 
322 
490 
1 
38 
17 
25 
22 
27 
1 
88 
25 
16 
260 
22 
36 
58 
808 

1 

2 
3 

1 

1 

4 

1 

3 
3 
7 

6 
10 
13 
10 
7 
1 
17 
8 
4 
76 
11 
15 
26 
109 

Total 

124 
10 
109 
407 
650 
2 
58 
37 
47 
46 
51 
3 
130 
39 
28 
441 
38 
63 
101 
1192 

- 1 - 

 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
 
Altogether the Commission adopted 1192 Cohesion Fund projects in the 2000-2006 period in 
the  16  eligible  Member  States.  This  figure  includes  52  projects  which  were  approved  or 
submitted in the 1994-1999 period but continued to be implemented in the 2000-2006 period. 
Out of 1192 projects adopted by the Commission, 808 concern the environment, 271 transport 
and 109 technical assistance; 4 projects are mixed (see Table 1). 

1.1.  Modification of the Cohesion Fund project decisions 

In  2011,  the  Commission  adopted  175  amendments  of  its  decisions  concerning  Cohesion 
Fund  projects,  which  was  slightly  more  than  in  2010  (167),  fewer  than  in  2009  (196)  and 
more  than  the  137  in  2008.  These  amendments  mostly  concerned  changes  in  the  physical 
scope, changes  of  the  project’s beneficiary, increases of the ceiling for advance and interim 
payments from 80 % to 90 %, and changes in the final date of eligibility due to the economic 
crisis  and  force  majeure.  A  significant  number  of  amendments  covered  combined  proposals 
covering more than one of the above-mentioned aspects. 

In April 2010, the Commission adopted, as one of the measures in support of the European 
Economic  Recovery  Plan,  the  ‘Amendment  of  the  Guidelines  on  the  closure  of  Cohesion 
Fund  and  ex-ISPA  projects  2000-2006’.1  The  Commission  considered  that  projects  first 
approved  from  2004  onwards  might  have  been  particularly  affected  by  difficulties  in 
providing  the  required  national  public  or  private  co-financing,  or  by  the  ability  of 
beneficiaries to respect the original schedule of works. The Commission recognised that such 
projects were in the middle, or even only at the start, of their implementation when the crisis 
set in. 

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

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

The amendment was welcomed by the Member States as it would contribute to more efficient 
and  effective  implementation  of  the  2000-2006  Cohesion  Fund  projects.  The  possibility  to 
extend the final date of eligibility beyond the year 2010 meant in practice that some Cohesion 
Fund projects continued to be implemented in 2011 and 2012 and there are implications for 
the closure process which is to be prolonged accordingly. 

For more than 500 projects, the final date of eligibility would normally have expired by the 
end of 2010. Requests from Member States to extend the final date of eligibility resulted in 
380  projects  reaching  their  final  date  of  eligibility  in  2010,  116  projects  in  2011,  and  7  in 
2012. 

1  

SEC(2010) 0405 of 19 April 2010. 

- 2 - 

 
 
 
                                                 
1.2. 

Payments  made  in  2011  for  projects  adopted  in  the  2000-2006  programming 
period 

In general, there were fewer final payments for Cohesion Fund projects (and ex-ISPA) for the 
period 2000-2006 than initially expected. Closure payment claims require thorough analysis 
of the closure documents and, depending on their completeness and quality, these checks can 
result in final payments at later stage than initially foreseen. 

The 2011 initial budget for payments for the 2000-2006 Cohesion Fund projects amounted to 
EUR 1 377 million (EUR 2 500 million in 2010). The transfer of appropriations resulted in a 
final budget of EUR 945 million, which was entirely paid by the end of 2011. This is a lower 
execution level than in 2010 (EUR 2 321 million) or in 2009 (EUR 2 777 million), illustrating 
the fact that the Cohesion Fund project-implementation cycle is reaching its final stage. 

As  far  as  the  ex-ISPA  budget  lines  are  concerned,  the  budget  initially  foreseen  for  2011 
amounted  to  EUR 358  million.  Following  budget  transfers,  the  appropriations  were  reduced 
by  EUR 164 million.  An  amount  of  EUR 188  million  was  paid  by  the  end  of  2011  (see 
Table 2). 

Table 2: Implementation of the Cohesion Fund and ex-ISPA payments in 2011 (in EUR) 

Payment appropriations 

Initial 

Movements 

Final Resources 

Outturn 

Cohesion Fund 
Ex-ISPA 
TOTAL 

1 377 495 593 
352 094 460 
1 729 590 053 

- 432 555 482 
- 164 080 494 
- 596 635 976 

944 940 111 
188 013 966 
1 132 954 077 

944 940 111 
188 013 966 
1 132 954 077 

Table  3  shows  the  level  of  2011  payments  for  each  Member  State  and  for  each  sector.  The 
main  beneficiary  countries  are  Spain  in  the  EU-4  group,  Poland  in  the  EU-10  group  and 
Romania in the EU-2 group. 

Table 3: Payments in 2011 to the Cohesion Fund and ex-ISPA projects per Member State and per sector 

Member State 

Greece 
Ireland 
Portugal 
Spain 
EU-4  
Cyprus 
Czech Republic 
Estonia 
Hungary 
Latvia 
Lithuania 
Malta 
Poland 
Slovakia 
Slovenia 
EU-10  
Bulgaria 
Romania 
EU-2 
TOTAL 

Environment 

Transport 

Amount (EUR) 

57 615 863.65  
8 933 600.00  
59 890 525.34  
207 017 555.55  
333 457 544.54  
8 926 429.27  
20 394 019.16  
7 885 782.28  
57 450 019.62  
12 587 415.80  
16 724 432.00  
0 
94 410 927.60  
5 504 756.15  
8 207 958.63  
232 091 740.51  
20 080 988.55  
48 053 737.21  
68 134 725.76  
633 684 010.81 

% of 
total 
outturn 
5.09 
0.79 
5.29 
18.27 
29.43 
0.79 
1.80 
0.70 
5.07 
1.11 
1.48 
0.00 
8.33 
0.49 
0.72 
20.49 
1.77 
4.24 
6.01 
55.93 

Amount (EUR) 

44 816 211.78 
2 207 521.12 
36 626 302.96 
193 055 630.27 
276 705 666.13 
5 058 456.00 
20 304 261.32 
17 391 904.00 

18 353 828.28 
5 143 945.00 
0 
50 776 143.02 
10 381 316.38 
2 446 325.42 
129 856 179.42 
11 181 332.51 
80 387 543.69 
91 568 876.20 
498 130 721.75 

% of 
total 
outturn 
3.96 
0.19 
3.23 
17.04 
24.42 
0.45 
1.79 
1.54 
0.00 
1.62 
0.45 
0.00 
4.48 
0.92 
0.22 
11.46 
0.99 
7.10 
8.08 
43.97 

Technical 
Assistance 
Amount 
(EUR) 

272 789.96 

272 789.96 

264 809.42 

601 745.21 

866 554.63 

1 139 344.59 

TOTAL 

Amount (EUR) 

102 432 075.43 
11 141 121.12 
96 789 618.26 
400 073 185.82 
610 436 000.63 
13 984 885.27 
40 698 280.48 
25 277 686.28 
57 450 019.62 
30 941 244.08 
22 133 186.42 
0 
145 788 815.83 
15 886 072.53 
10 654 284.05 
362 814 474.56 
31 262 321.06 
128 441 280.90 
159 703 601.96 
1 132 954 077.15 

% of 
total 
outturn 
9.04 
0.98 
8.54 
35.31 
53.88 
1.23 
3.59 
2.23 
5.07 
2.73 
1.95 
0.00 
12.87 
1.40 
0.94 
32.02 
2.76 
11.34 
14.10 
100.00 

- 3 - 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.3.  Outstanding commitments from the 2000-2006 period 

At  the  end  of  2011,  the  average  absorption  rate  (payments  vs  commitments)  of  all  current 
beneficiary  countries  for  both  the  Cohesion  Fund  and  ex-ISPA  projects  was  86.8 %.  The 
absorption  rates  range  from  76.4 %  (Hungary)  and  80.0 %  (Malta)  to  94.5 %  (Ireland)  and 
100 % (Cyprus). 

At the end of 2011, the outstanding commitments (‘reste à liquider’ or ‘RAL’) corresponding 
to the 2000-2006 period amounted to EUR 4.76 billion. During 2011, the RAL was reduced 
by EUR 1.3 billion. 

Table 4: Absorption rate and outstanding commitments at the end of 2011 

Member State 

Greece 
Ireland 
Portugal 
Spain 
EU-4 
Cyprus 
Czech Republic 
Estonia 
Hungary 
Latvia 
Lithuania 
Malta 
Poland 
Slovakia 
Slovenia 
EU-10 
Bulgaria 
Romania 
EU-2 
TOTAL 

Committed (EUR) 

Paid (EUR) 

% paid 

RAL (EUR) 

(until 12/2011) 

(until 12/2011) 

as at 31/12/2011 

2 715 715 157 
570 501 432 
3 091 383 087 
11 678 668 888 
18 056 268 566 
54 014 695 
1 216 164 695 
425 313 806 
1 481 998 333 
679 429 631 
825 210 750.63 
21 966 289 
5 622 608 032 
764 788 823 
254 129 012 
11 345 624 057 
791 062 943 
2 001 213 853 
2 792 276 796 
32 201 682 470 

2 298 554 325 
539 671 256 
2 702 560 755 
10 390 253 116 
15 931 039 454 
54 014 695 
1 102 680 977 
393 964 337 
1 133 287 696 
608 993 278 
713 677 487 
17 573 031 
4 798 548 338 
662 551 600 
225 399 467 
9 710 690 908 
645 742 295 
1 678 709 925 
2 324 452 221 
27 966 182 584 

84.6 
94.5 
87.4 
88.9 
88.2 
100.0 
90.6 
92.6 
76.4 
89.6 
86.4 
80.0 
85.3 
86.6 
88.6 
85.5 
81.6 
83.8 
83.2 
86.8 

644 237 217 
44 183 661 
480 151 783 
1 385 991 734 
2 554 564 397 
0 
123 537 739 
31 359 034 
348 710 635 
70 541 232 
124 668 359 
4 393 258 
826 434 068.96 
102 246 279.62 
28 729 545 
1 660 620 153 
226 706 678 
322 503 927 
549 210 606 
4 764 395 156 

1.4.  Closure of Cohesion Fund projects 

Of  the  1192  projects  co-financed  in  the  2000-2006  programming  period,  690  were  still 
ongoing in the Member States at the end of 2011 (see Table 5). Accordingly, 502 projects had 
been closed, including 105 projects closed in 2011 (compared to 102 projects closed in 2010). 
The majority of closures concerned the following Member States: Spain (44 projects closed), 
Greece (13), Portugal (10) and Poland (9). 

Project implementation peaked in 2010 and attention is now shifting towards the completion 
and submission of the closure documents. The managing authorities and the Commission face 
a significant increase of workflow regarding the project closure documents. 

The Commission is aware that the  closure process is  too slow  in  the  light of the volume of 
projects to be cleared in the coming two years. However, practical problems such as the late 
transmission  of  closure  documents,  inconsistencies  of  information  (namely  between  the 
content  of  some  final  reports  and  the  winding-up  declarations)  or  the  underperformance  of 
certain  projects  compared  to  their  initial  objectives,  can  make  the  exercise  complex. 
Moreover,  for  those  projects  still  ongoing,  implementation  difficulties  on  the  ground  often 
lead  to  new  modification  requests  from  Member  States.  In  addition,  more  complicated 

- 4 - 

 
 
 
projects  are  undergoing  the  closure  procedure  and  more  time  is  needed  for  the  examination 
and decision-making linked to closure. 

The  Commission  adopted  concrete  steps  to  boost  the  closure  process.  A  Cohesion  Fund 
closure task force was set up within DG Regional Policy in February 2011 to monitor, guide 
and facilitate the closure. Furthermore, it took a number of initiatives to improve the situation, 
such  as  the  drafting  of  a  procedure  for  the  cancellation  of  those  projects  unlikely  to  be 
completed  because  of  their  very  low  level  of  implementation;  the  rationalisation  of 
correspondence  with  Member  States  for  clarifications  needed  at  closure,  improving  the 
common approach and equal treatment; and the development of a new monitoring instrument 
enabling follow-up on a daily basis of the progress achieved in the closure process. 

Table 5: Cohesion Fund projects closed until the end of 2011 

Member State 

Greece 
Ireland 
Portugal 
Spain 
EU-4 
Cyprus 
Czech Republic 
Estonia 
Hungary 
Latvia 
Lithuania 
Malta 
Poland 
Slovakia 
Slovenia 
EU-10 
Bulgaria 
Romania 
EU-2 
TOTAL 

Total 
number 
of CF 
projects 

Total 
number 
of 
projects 
closed 

State of play as of end 2011 

% of 
projects 
closed 

Total paid for projects 
closed (EUR) 

Number of 
open 
projects as 
of end 2011 

Number of 
projects 
closed in 
2011 

124 
10 
109 
407 
650 
2 
58 
37 
47 
46 
51 
3 
130 
39 
28 
441 
38 
63 
101 
1192 

71 
6 
46 
208 
331 
1 
30 
27 
13 
22 
17 
0 
15 
18 
17 
160 
5 
6 
11 
502 

57.3 
60.0 
42.2 
51.1 
50.9  
50.0 
51.7 
73.0 
27.7 
47.8 
33.3 
0.0 
11.5 
46.2 
60.7 
36.3  
13.2 
9.5 
10.9 
42.1 

1 645 734 338 
451 776 989 
1 243 494 296 
6 329 550 889 
9 670 556 512 
28 722 415 
658 665 260 
240 805 280 
67 714 692 
155 238 464 
177 056 807 
0 
384 661 932 
231 678 461 
125 856 727 
2 070 400 038 
67 979 411 
15 776 582 
83 755 993 
11 824 712 543 

13 
2 
10 
44 
69 
1 
3 
6 
1 
3 
1 
0 
9 
7 
4 
35 
1 
0 
1 
105 

53 
4 
63 
199 
319 
1 
28 
10 
34 
24 
34 
3 
115 
21 
11 
281 
33 
57 
90 
690 

2. 

ECONOMIC ENVIRONMENT AND CONDITIONALITY 

Article  6  of  Council  Regulation  (EC)  No 1164/1994,  which  governs  the  Cohesion  Fund  for 
projects  approved  prior  to  the  end  of  2006,  attaches  budgetary-policy  conditions  to  the 
disbursements  by  the  Fund.  It  provides  that  ‘no  new  projects  or,  in  the  event  of  important 
projects, no new project stages shall be financed by the Fund in a Member State in the event 
of  the  Council,  acting  by  a  qualified  majority  on  a  recommendation  from  the  Commission, 
finding  that  the  Member  State  […]  has  not  implemented  [its  stability  or  convergence 
programme] in such a way as to avoid an excessive deficit’. However, as the approval phase 
of the 2000-2006 projects preceded the economic crisis, this Article has not been used in the 
context of the 2000-2006 projects. 

- 5 - 

 
 
 
3. 

AUDITS AND FINANCIAL CORRECTIONS 

The Commission has ensured regular audit coverage of the Cohesion Fund projects in most of 
the Member States concerned and has focused on the specific risks linked to Cohesion Fund 
implementation. 

The  last  audit  enquiry  was  updated  in  2011  (‘Cohesion  Fund:  Review  of  Winding-up  Body 
2000-2006 and audit of projects’). Based on this enquiry, the Commission services should be 
in a position to conclude whether the systems and procedures set up, and the work carried out, 
provide  a  reliable  source  of  assurance  in  relation  both  to  projects  already  closed  and  to 
projects awaiting closure. The audit work started in May 2011 and will continue in 2012 and 
2013.  In  2011,  six  audit  missions  were  carried  out  (Bulgaria,  Spain,  Romania,  Hungary, 
Lithuania and Latvia). 

Cumulatively, the Commission has carried out 162 system audits and 20 closure audits on the 
2000-2006  period  for  Cohesion  Fund  projects.  The  analysis  below  provides  details  on  the 
work  carried  out  up  to  end  2011,  grouped  in  accordance  with  the  historical  development  of 
the Cohesion Fund. 

3.1.  EU-4 Member States 

A significant amount of work has been carried out for the EU-4 Member States since 2001 as 
part  of  the main  audit  enquiries:  on  the  verification  of  effective  functioning  of  the 
management and control systems in the Member States, on public procurement and to review 
the  work  of  the  winding-up  bodies  in  the  Member  States  in  preparation  for  the  closure  of 
2000-06  programmes  and  projects;  action  plans  to  correct  weaknesses  found,  financial 
corrections made, and results of Court of Auditors audits. 

3.2.  EU-10 Member States 

As a result of the significant amount of audit work carried out by the Commission on the EU-
10 Member States during the main enquiries over previous years, a good level of coverage has 
been attained (up to 53 %). 

The assessment of the reliability of the work of the winding-up body varies for this group of 
Member  States.  Whenever  problems  were  detected,  the  Commission  requested  the  Member 
State  authorities  to  implement  remedial  action  plans,  to  carry  out  additional  retrospective 
verifications,  to  strengthen  the  preparatory  work  for  closure  before  sending  the  winding-up 
declarations and to apply appropriate financial corrections. The main residual risk factors are: 
public  procurement  procedures  and  doubts  about  some  winding-up  bodies’  ability  to  detect 
such  irregularities  or  to  impose  financial  corrections,  together  with  weaknesses  in  the 
functioning  of  the  winding-up  body.  In  one  case  (Hungary),  serious  issues  and  a  relatively 
high error rate have been reported for transport projects, resulting in a reservation in the 2011 
Annual  Activity  Report  for  the  Directorate-General  for  Regional  Policy.  All  the  risks 
identified  are  mitigated  by  the  thorough  verifications  undertaken  by  the  Commission  when 
analysing  the  winding-up  declarations  at  the  closure  of  each  project.  The  Commission  will 
also continue to monitor these risks through audits of samples of the remaining open projects. 

In  four  Member  States  (Cyprus,  Estonia,  Malta,  Slovenia),  there  are  no  outstanding  audit 
issues and the Commission can place a high degree of reliance on the winding-up declarations 
to close projects in these Member States. 

- 6 - 

 
 
 
3.3.  EU-2 Member States 

As a result of the substantial amount of audit work carried out by the Commission on Bulgaria 
and  Romania  during  the  main  enquiries  over  previous  years,  a  good  level  of  coverage  has 
been  attained  from  this  audit  work  (51.35 %  for  Bulgaria  and  36.51 %  for  Romania).  The 
implementation  of  Cohesion  Fund  projects  started  generally  later  for  these  two  Member 
States. As a result, 33 out of 38 projects and 57 out of 63 projects are still open in Bulgaria 
and Romania, respectively. Consequently, significant interim payments will be made in 2012 
and possibly in 2013 as well. 

As  pointed  out  in  the  Directorate-General  for  Regional  Policy’s  Annual  Activity  Report  for 
2011,  audits  carried  out  revealed  deficiencies  in  the  public  procurement  area  (selection  and 
award  criteria,  application  of  deadlines,  use  of  negotiated  procedures)  and  weaknesses  in 
management  verifications.  This  led  to  financial  corrections  initiated  by  the  Commission  - 
EUR  0.69  million  of  corrections  reported  in  2011  for  Bulgaria  and  EUR  0.22  million  for 
Romania.  The  Commission  identified  deficiencies  in  the  work  of  the  winding-up  body  in 
Bulgaria, made recommendations for improvement and is monitoring closely the situation (as 
a  result  of  an  audit  in  May  2011  to  further  assess  the  work  of  the  winding-up  body).  For 
Romania, an audit mission on the work of the winding-up body carried out in 2009 has been 
closed  with  an  unqualified  opinion,  providing  a  good  basis  for  relying  on  the  winding-up 
declarations received. 

3.4.  Other audit work in 2011 

Other  audit  work  undertaken  by  the  Commission  services  for  the  Cohesion  Fund  in  2011 
included the examination of the national annual control reports under Article 12 of Regulation 
(EC)  No  1386/2002,  the  annual  summaries  and  the  review  of  national  system  audit  reports 
submitted to the Commission by the Member States. The reports received were analysed and 
replies  sent  to  the  Member  States  with  observations  and,  where  necessary,  requests  for 
additional information in order to be able to extract as much assurance as possible from the 
results of national audit work. 

Bilateral coordination meetings are held annually between the Commission and national audit 
authorities  to  exchange  information  on  the  implementation  of  audit  work  and  to  discuss 
progress on sample checks and follow-up of audit findings. The meetings covering audit work 
conducted  in  the  year  2010  were  held  during  the  first  half  of  2011.  The  annual  bilateral 
coordination meetings covering audit work carried out in 2011 was held in the first semester 
of 2012. 

3.5.  Management and control systems 

In its Annual Activity Report for 2011, the Directorate-General for Regional Policy assessed 
the  functioning  of  the  management  and  control  systems  (2000-2006),  based  on  the  reported 
audit opinions expressed by the Member States’ audit authorities and the Commission’s own 
audit results. 

A  positive  assessment  was  made  for  fifteen  Member  States  (one  partly).  An  unqualified 
opinion  was  given  for  the  Cohesion  Fund  systems  in  five  Member  States  (Cyprus,  Estonia, 
Malta,  Portugal  and  Slovenia).  For  ten  Member  States,  the  opinion  was  qualified  with  a 
moderate  impact  (Bulgaria,  Czech  Republic,  Greece,  Hungary/environment  sector  and 
technical assistance projects, Ireland, Latvia, Lithuania, Poland, Romania, and Slovakia). 

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For  the  Hungarian  transport  sector,  a  reservation  and  a  qualified  opinion  with  significant 
impact was given due to the high error rate identified by the national audit body, the results of 
the Commission audits (which detected several public procurement irregularities), weaknesses 
identified  in  the  implementation  of  financial  corrections  recommended  by  the  winding-up 
body,  and  shortcomings  in  the  detection  and  correction  of  public  procurement-related 
irregularities  at  national  level.  In  addition,  the  slow  progress  on  closure  of  the  Spanish 
Cohesion Fund projects, in particular due to the high level of public procurement errors found 
in a majority of projects, and the slow progress of the Spanish authorities in addressing issues 
raised  by  the  Commission,  also  resulted  in  a  reputational  reservation  in  the  2011  Annual 
Activity Report for all Spanish Cohesion Fund projects. 

Table  6:  Reservations  and  financial  corrections  decided/agreed  for  the  Cohesion  Fund  2000-2006  by 

Member State 

Member State 

Greece 
Ireland 
Portugal 
Spain 
Cyprus 
Czech Republic 
Estonia 
Hungary 
Latvia 
Lithuania 
Malta 
Poland 
Slovakia 
Slovenia 
Bulgaria 
Romania 
TOTAL 

Reservation 
2010 AAR 

NO 
NO 
NO 
NO 
NO 
NO 
NO 
YES - transport sector 
NO 
NO 
NO 
NO 
NO 
NO 
YES - 1 project 
NO 

Financial corrections 
decided/agreed (EUR) 
in 20112 

Reservation 
2011 AAR 

1 272 734 

4 139 400 
- 5 413 8063 

7 921 142 
77 353 
2 581 124 

206 765 

4 796 351 
922 150 

690 206 
221 356 
17 414 784 

NO 
NO 
NO 
YES4 
NO 
NO 
NO 
YES5 
NO 
NO 
NO 
NO 
NO 
NO 
NO 
NO 

4. 

IRREGULARITIES NOTIFIED BY THE MEMBER STATES 

As  the  Annual  Report  on  the  Cohesion  Fund  covers  the  implementation  during  2011  of 
Cohesion  Fund  projects  adopted  in  the  2000-2006  programming  period,  only  notifications 
made under Regulation (EC) 1831/1994 are taken into account. 

64  notifications  of  irregularities  involving  a  total  amount  of  EUR  42 168 842  in  respect  of 
projects co-financed by the EU related to the above mentioned period have been reported to 
the Commission. Some EUR 20 315 177 still remains to be recovered. Most of the cases were 
reported by Portugal, Greece and Lithuania (19, 14 and 8 respectively). However, Poland and 
Greece  reported  the  highest  amounts  (EUR  16  million  and  11  million  respectively),  i.e. 
approximately 64 % of the total (see Table 7). 

2   No amount to be reported in 2011 for 1994-1999 programming period. 
3   The negative amount is the result of an adjustment of the Fund imputation in relation to what was wrongly reported in 

2010 for the Cohesion Fund. The amount of EUR 34 784 766 has been effectively corrected. 

4   Reputational Reserve for Spain. 
5   Reputational Reserve for Hungary. 

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The  two  main  types  of  reported  irregularities  are  infringements  of  public-procurement  rules 
and ineligible expenditure, which concern 54 of the 64 notified irregularities (85 %). 

Table 7:   Irregularities  and  EU  financial 

impact  reported  by  Member  State 

in  2011  under 

Regulation (EC) 1831/1994 - programming period 2000-2006 

Member State 

Number of 
irregularities 

Affected amounts 

Amounts to be recovered 

EUR 

% 

EUR 

% 

Greece 
Ireland 
Portugal 
Spain 
Cyprus 
Czech Republic 
Estonia 
Hungary 
Latvia 
Lithuania 
Malta 
Poland 
Slovakia 
Slovenia 
Bulgaria 
Romania 
TOTAL 

14 
3 
19 
3 

6 

8 

5 
6 

64 

11 298 028 
1 552 044 
5 404 973 
483 353 

4 684 545 

569 966 

15 998 132 
2 177 800 

26.79 
3.68 
12.82 
1.15 

11.11 

1.35 

37.94 
5.16 

592 581 

2.92 

1 761 729 

8.67 

43 548 

15 739 519 
2 177 800 

0.21 

77.48 
10.72 

42 168 842 

100.00 

20 315 177 

100.00 

5. 

EVALUATION 

The Commission and the Member States carry out appraisal and evaluation of all co-financed 
Cohesion  Fund  projects.  In  2011,  the  Commission  continued  to  carry  out  the  ex-post 
evaluation of the Cohesion Fund, including ex-ISPA, for the 2000-2006 programming period. 
A set of 5 interlinked ‘work packages’ was prepared to: 

a)  Assess  the  contribution  of  the  Cohesion  Fund  and  ISPA  to  the  development  of  the  EU 
transport  system  and  to  achieving  the  EU  acquis  in  the  environment  field,  while  also 
assessing  the  effect  of  ISPA  as  a  preparation  for  Structural  Fund  and  Cohesion  Fund 
programmes: 

•  The  contribution  of  the  two  instruments  towards  the  development  of  the  TEN-T 
network during the 2000-2006 period is viewed as significant and as exceptional in the 
case of the EU-10. This is because the EU-10 acceded halfway through the 2000-2006 
programming period and faced the biggest challenge in terms of bringing their national 
infrastructure up to a basic standard comparable with other Member States. 

• 

In  the  road  sector,  the  99  approved  road  projects  provided  4,214  km  of  new  or 
rehabilitated  road  on  the  TEN-T  network,  contributing  approximately  10% 
towards  its  total  length.  This  contribution  was  greatest  for  the  EU-10  Member 
States, in which the 57 projects contributed approximately 20% towards the TEN-
T network within these countries. 

•  For  rail,  the  112  approved  projects  provided  8,477km  of  new  or  rehabilitated 
track/infrastructure  on  the  TEN-T  network,  or  approximately  21%  of  its  total 
length across these countries. Again, the greatest contribution was to the TEN-T 

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networks within the EU-10 countries, in which the ISPA projects improved almost 
40% (over 6,000km). 

to  countries’  needs  and 

•  The  assessment  of  EU  acquis  was  limited  to  the  fields  of  water  quality  and 
management  (including  wastewater  treatment),  and  solid  waste  collection  and 
treatment.  The  analysis  demonstrated  that  the  Cohesion  Fund  and  ISPA  provided  a 
significant  contribution 
the 
environmental acquis. New assets, or extensions or upgrades of infrastructure in water 
provision, sanitation services and solid waste management, as required by countries to 
meet the EU Directives, were provided. Although countries received differing amounts 
in terms of funds per sector, the average contribution to sectors’ needs is quite similar, 
with a contribution of around 30 % in the drinking water sector and 38 % in the waste-
water sector. For solid waste, where countries’ needs differed more significantly and 
the nature of the projects was more diverse, the contribution was 25 %. 

their  compliance  with 

b)  Carry  out  ex  post  cost-benefit  analyses  for  a  sample  of  transport  and  environment 

projects, identifying lessons for future programming periods: 

•  Transport CBA: With regard to the impact of the projects, the analysis showed that all 
projects  delivered  value  for  money.  The  Cohesion  Fund  contribution  was  needed  to 
unlock the economic benefits of these projects. Benefits from these projects covered 8 
categories (travel-time savings, vehicle operating costs, safety improvements, carbon-
dioxide emissions, air and noise reduction and others). Generally, the utilisation rates 
found  are  compatible  with  the  objective  to  build  in  sufficient  spare  capacity  to  give 
room for growth over a project’s lifetime. It was difficult to establish a direct causal 
link  between  the  transport-infrastructure  investments  and  the  wider  socio-economic 
impacts (especially relevant for GDP). 

•  Environment CBA: The analysis showed that many of the environment-infrastructure 
projects were carried out to meet legal requirements. Legal compliance in itself did not 
ensure positive impacts in economic-welfare terms - in most cases, this was achieved 
at  costs  that  exceeded  the  benefits  that  could  be  monetised.  This  is  why  it  may  be 
impossible to demonstrate a positive economic net present value at project level. In the 
two  projects  with  objectives  other  than  compliance,  the  environmental  focus  was 
found  to  be  relevant  to  the  needs  of  the  region.  Generally,  assessments  found  that 
projects  generated  positive  side  effects  in  terms  of  environmental  awareness  and 
institutional learning. 

Further  to  a  contract  modification  to  the  first  of  these  ‘work  packages’,  two  further 
evaluations  were  launched  in  2011,  focusing  on  management  and  implementation  of  the 
Cohesion Fund, as well as an expert review and synthesis of the overall evaluation. 

6. 

INFORMATION AND PUBLICITY 

As from 1 January 2007, all issues concerning the Cohesion Fund have been tackled within 
the  Coordination  Committee  of  the  Funds  (COCOF,  established  in  accordance  with 
Regulation  (EC)  No  1083/2006).  The  Commission  presented  an  update  of  the  2000-2006 
Cohesion Fund closure process during the 44th meeting of the Coordination Committee of the 
Funds, in Brussels on 21 September 2011. 

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In 2011, the Directorate-General for Regional Policy continued to report in great detail on the 
Cohesion  Fund  in  its  Annual  Activity  Report6  and  to  publish  details  of  major  projects, 
including those financed by the Cohesion Fund, for both of the periods 2000-2006 and 2007-
2013.  To  this  date,  the  details  of  238  major  projects  have  been  published  in  a  specific 
searchable  database  on  the  INFOREGIO  website.  Further  Cohesion  Fund  projects  are  also 
available on the website, together with hundreds of examples of other projects. Furthermore, a 
specific  publication  showcases  150  examples  of  projects  co-financed  by  the  Cohesion  and 
Structural Funds. 

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

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