COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION Member States' replies to the Court of Auditors' 2011 Annual Report
Date: 2013-02-28
Institutions: European Commission
Subjects: EU Member State, European Court of Auditors, audit, disclosure of information, eligibility criteria, fund (EU), implementation of the budget, public contract

EUROPEAN 
COMMISSION 

Brussels, 28.2.2013  
SWD(2013) 61 final 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying the document 

REPORT FROM THE COMMISSION 

Member States' replies to the Court of Auditors' 2011 Annual Report 

{COM(2013) 118 final} 

EN 

   EN 

 
 
 
 
  
  
 
The  Financial  Regulation  applicable  to  the  General  Budget  of  the  European  Union 
states in article162.5 that as soon as the Court of Auditors (the Court) has transmitted 
its  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 
February of the following year. 

Following  publication  on  6  November  2012  of  the  Court's  Annual  Report  for  the 
budgetary year 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  I  was  a  questionnaire  on  the  paragraphs  in  the  report  referring  to 
individual Member States; Annex II was a questionnaire on the audit findings which 
refer to each Member State1 and Annex III was a questionnaire on general findings 
related to the policies and programmes under shared management. 

This Staff Working Document (SWD), which comprises the Member States' replies 
to Annex I and Annex III2, accompanies the report from the Commission "Member 
States' replies to the Court of auditors' 2011 annual report".  

1 Annex II comprises the replies of the Member States to individual Statements of Preliminary Findings and is  
  not included in the SWD, but is made available to the ECA. 
2 See previous footnote 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Table 1.4 

Reservations issued by 
Commission's 
directorates-general for 
2011 

Member State reply 

CHAPTER 1 – The Statement of Assurance and supporting information 

Germany: 

The Managing Authority for Berlin/Brandenburg (ERDF) provided the following remarks: On the basis of an 
analysis of the grounds for the errors flagged up in the Annual Control Report, an Action Plan to improve the 
management and control system was drawn up and implemented. Further checks were carried out in respect of 
irregularities in the award procedures and training was given on public procurement law and guidelines drawn up. 
For the other reservations, please refer to the remarks in Annex II. 

Austria:  

No. 

Belgium:  

Budget : En effet, la Cour des comptes européenne a des doutes quant à l’exactitude des montants RPT transférés 
vers le budget de l’UE. L’administration générale belge des Douanes et Accises (AGDA) a demandé le 
remboursement de 126 MIO EUR, c’est-à-dire 75% d’un total de 169 MOI EUR enregistrés erronément comme 
RPT dans la comptabilité de l’AGDA belge au cours de la période 2008-2010.  
La DG Budget (Commission européenne) a fait dépendre le remboursement d’un audit de système comptable par 
un auditeur indépendant. Cet auditeur doit également certifier le montant redemandé par la Belgique afin 
d’autoriser le remboursement de l’UE.  
L’adjudication pour la passation du marché avec un auditeur est terminée. La mission sera lancée début janvier 
2013. On attend la certification du montant à rembourser par l’UE vers mars 2013. 
FSE : l’Agence FSE n’a pas fait l’objet d’un contrôle de la CCEur en 2011, donc aucune réserve. 
Bureau d’Intervention et de Restitution Belge : néant 
Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

Autorité d’audit (Région Bruxelles- Capitale) : néant 
SPF Fin. Affaires fiscales : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 
ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 

Hungary:  

Hungary considers an effective and efficient financial management in connection with programmes supported by 
the Structural and Cohesion Funds to be of particular importance. For that reason, we have carried out continuous 
checks since 2007.  

In recent times, we have achieved significant progress in the supervision of public procurement.  

Since  8  December  2010,  a  centralised  public  procurement  audit  system  has  been  in  operation  at  the  National 
Development  Agency.  A  specialised  unit,  the  Public  Procurement  Supervisory  Department  was  created  with  the 
primary responsibility of performing mandatory ex-ante and ex-post public procurement audits, drafting guidelines 
and providing expert supervision of the first-level controls carried out by intermediary organisations in the case of 
public procurements with a lower contract value. The competences required to carry out the above tasks are laid 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

down in national legislation. If a beneficiary wishes to claim support from the Structural and Cohesion Funds in 
order  to  realise  a  project,  it  may  not  launch  a  public  procurement  procedure  and  may  not  conclude  or  modify  a 
contract without the Department’s consent. Statistical data concerning the checks completed so far clearly attest to 
the decisive role the Department plays in ensuring legal compliance in public procurement. 

The National Development Agency carried out a concentration check in order to detect potential anomalies arising 
during  the  awarding  of  contracts  and  to  prevent  a  distortion  of  competition  in  connection  with  Hungarian  public 
procurement  procedures.  The  results  of  the  check  prove  that  the  degree  of  consolidated  concentration  is  not 
excessive. However in order to maintain this level, we will regularly analyse such data. 

Since the system has been improved significantly and, according to the checks carried out to date, its concerns have 
proved  unfounded,  we  sincerely  hope  that  the  European  Commission  will  soon  lift  Hungary’s  unwarranted 
reservation status. 

Ireland: 

The Commission’s reservations derive from preliminary findings based on an initial examination of closure 
documentation submitted. A contested procedure is currently underway. Ireland is confident of the robustness of its 
financial management and control systems and will vigorously defend them in the ongoing contested procedure. 
Furthermore, no such issues have been identified during the 2007-2013 round despite extensive checks and audits. 

Italy:  

NOT NECESSARY 

Lithuania:  

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

Reservations of DG EMPL and REGIO presented in the table are related to the shortcomings identified in the 
Public Audit Report on operational programmes implementing the 2007-2013 strategy of Lithuania on the use of 
the EU structural support to achieve the convergence objective, the functioning of the management and control 
system (hereinafter referred to as the MCS) and the expenditure declared to the European Commission in 2010 (the 
annual control report under Article 62 of Regulation (EC) No. 1083/2006). The expenditure mentioned is 
essentially justified by the error rate identified by the aforementioned DGs of the EC (which, as estimated by the 
EC services, would be 4.36%, and the expected error rate given in the annual control report is 1.93%). We would 
like to point out that the Lithuanian audit authority carries out continuous monitoring of the implementation of 
recommendations to the MCS institutions given in the annual control report in accordance with the measures and 
within the deadlines for implementing the recommendations by the MCS institutions audited. At present 91% of the 
recommendations made in 2010 have been implemented. 

Netherlands:  

Explanatory Note: in May 2012, the European Commission launched the procedure to suspend payments to the 
‘North' and 'South' programmes (two of the four management authorities) on a temporary basis. This was because 
the auditing authority (AA) had noticed that their management and control systems needed improving and that there 
had been too high a percentage of errors two years. The AA was supposed (in consultation with the management 
and certifying authority) to provide information to the European Commission (EC) regarding three questions within 
two months. The AA sent the letters to the EC in June. Subsequently, in August, the EC then launched the more 
cumbersome procedure for suspending payments to North and South. This was because it had been concluded that 
there were serious weaknesses in the management and control systems of these programmes as the AA had found 
an error rate above the standard 2% for 2010. This was the conclusion for almost half of all the ERDF programmes 
in Europe (130 out of the 317). Within two months, the EC was informed of the approach taken in certain cases. On 
this basis, the EC decided at the end of October to stop the suspension procedure.  

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

Poland:  

1. Measure 4.5 of the OPIE  
Reservation  of  the  European  Commission  pertained  to  the  effective  functioning  of  the  management  and  control 
system  in  Measure  4.5.  of  the  Operational  Programme  Innovative  Economy  (OPIE)  in  the  process  of  selecting 
projects for funding. The functioning of the management and control system in Measure 4.5. of the OPIE has been 
verified  by  the  Audit  Authority  for  the  European  Commission.  The  audit  report  was  submitted  to  the  European 
Commission on 27 June 2012. Pursuant to the report, the management and control system for the above measure 
was evaluated in the category 1 (the system works well, only minor improvements are required). The audit of the 
MA of OPIE in the Implementing Authority for the aforementioned measure, conducted on 29 May - 1 June 2012, 
confirmed that the procedures in place in the Implementing Authority ensure the compliance of the selection and 
implementation  of  funded  projects  with  Community  regulations  concerning  the  incentive  effect,  the  risk  of 
reallocation  of  funds,  innovation  and  that  they  ensure  the  efficiency  of  public  funds  spending.  As  a  result  of 
remedial actions undertaken, the European Commission has resumed the certification of expenditures for projects 
under Measure 4.5. of the OPIE. 
2. 7th axis of the OPIE 
Reservation of the European Commission pertained to the effective functioning of the management and control 
system in the 7th priority axis of the OPIE. Remedial actions were undertaken at the turn of 2012 - immediately 
upon the receipt from the Supreme Chamber of Control and from the Central Anti-Corruption Bureau of 
information on the irregularities in the implementation of projects funded under the 7th priority axis of the OPIE. 
Information on the implemented remedial actions was submitted to the European Commission, inter alia, in letters 
dated 10 and 18 May 2012. On 31 May the Remedial Action Plan was submitted to the European Commission (a 
document including detailed information on the corrective measures applied in order to ensure proper 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

implementation of projects under the 7th priority axis of the OPIE). The most important remedial actions 
implemented since the beginning of 2012 included: withdrawing from the certification of expenditures suspected of 
irregularities, subjecting the projects to increased monitoring, inter alia by closer linking of the procedures for 
settling expenditure with the verification of the material progress of projects, conducting in-depth trainings on 
public procurement and anti-corruption procedures for project beneficiaries and employees of institutions involved 
in the implementation of projects under the 7th priority axis of the OPIE. Due to the nature of remedial actions 
implemented - in particular, the increased project monitoring carried out on an ongoing basis - the measures 
undertaken should be treated as actions in progress. As a result of remedial actions undertaken, the European 
Commission has resumed the certification of expenditures for projects under the 7th priority axis of the OPIE. 

Portugal:  

As of July 2011 the national authorities implemented the second stage of the LPIS-GIS Action Plan. The measure 
involved all the plots of land declared in connection with the aid application, of which there were about 1 800 000, 
and its main objective was to update the land occupation register and correct the boundaries of the reference plots. 
The audit carried out in September 2012 by DG AGRI confirmed the improvements made to the system, noting that 
the  Parcel  Map  action  plan  had  been  carried  out  in  its  entirety,  with  the  exception  of  measures  2011.05 
(establishment  of  the  farmer's  block)  and  2011.9  (communication  to  farmers).  Implementation  of  measure  5  was 
postponed for reasons to do with technical conditions; it was the subject of a specific action plan presented to DG 
AGRI on 6 November, which is supposed to be completed by February 2013. Measure 9 is also to be completed by 
this date, as it is dependent on the completion of measure 5. 

Specifically  as  regards  the  section  of  Table  1.4  supplied  by  DG  AGRI  (Reservation  3  –  Deficiencies  in  the 
supervision and control of certified organic products), we would inform you that there is no connection between 
this point and the 2011 Activity Report. These issues are set out in Special Report No 9 of 2012, which deals with 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

the auditing of the system of checks on the production, processing, distribution and importing of organic products 
and which  was published  in May 2012, although the issues are  presented in a general way that applies to all the 
Member States. 

Czech Republic:  

1.  As regards audit authorities: the report refers to a selected sample of 7 AAs (out of 112) whose work was 
assessed  by  the  ECA.  The  negative  assessment  of  the  Czech  Republic  is  based  on  an  assessment  of  the 
situation in 2011, including a system which had originally been set up in 2007 (and subsequently approved 
both by the EC and the audit firm PricewaterhouseCoopers). At the time of the ECA audit, work had already 
been commenced to change this system, following an agreement with the EC. In their opinions, the ECA 
auditors  even  took  into  account  assessments  made  of  certain  selected  aspects  from  2010  (Annual  Control 
Reports). Including these into the Annual Report for 2011 is not systemically correct. 

2.  The  differences  in  the  results  of  the  assessments  performed  by  the  Czech  auditors  and  the  ECA  auditors 
were due, amongst other things, to the fact that until 2011 the Czech auditors assessed individual projects 
with consideration to the decision-making practice of the Office for the Protection of Competition (OPC) 
and the Czech courts, in order to ensure a specific degree of legal certainty for grant beneficiaries – this led 
to a discrepancy between the findings of the ECA and the AA, which thus resulted in a negative assessment 
of the Czech audit. In no case did this involve any deliberate modification of the results of the audits (and 
indeed  the  ECA’s  Annual  Report  does  not  allege  any  such  thing),  and  the  work  of  the  auditors  was  not 
therefore of poor quality. For example: 

a.  During the performance of their verifications in 2011, the EC and the ECA stated that the decisive 
issue is the practice of institutions at EU level, not national level - i.e. in particular the OPC and the 
Financial  Administration  of  the  Czech  Republic  (the  Commission’s  Strategy  Paper  relating  to  the 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

new programming period 2014-2020 is very critical in regard to the decision-making practice of the 
OPC  in  particular).  Differences  in  aspects  of  evaluation  existed,  for  example,  in  relation  to 
contractual  penalties,  which  Czech  legislation  did  not  prohibit  at  that  time  (now  prohibited), 
although in some of the cases which the ECA criticised these did not have an impact on the choice 
of  the  best  tender  –  the  tenderer  with  the  lowest  price  won.  A  further  case  was  the  assessment  of 
eligibility criteria relating to a required level of turnover (nowhere specified) and changes to projects 
during their implementation. 

b.  For this reason, an agreement has already been made with the EC that starting from mid-2012 the 
Audit Authority will assess individual cases in accordance with EU practice, regardless of national 
practice. This may, however, result in an increase in the number of court cases brought against the 
Czech Republic by grant beneficiaries (or, alternatively, if a finding with a financial impact is made 
according to EU practice it will not always be possible to demand the repayment of the grant by the 
beneficiaries). 

3.  The Czech Republic is aware of the seriousness of this situation and wants to resolve these problems. At the 
end of last year it therefore began intensive discussions with the EC regarding steps aimed at improving the 
situation. The outcome was an “Action Plan”, whose implementation was approved by the EC in June, and 
based on which the EC lifted the blocks on funding for some operational programmes. 

4.  In addition to the main problems associated with management control at grantors (the managing authorities 
of operational programmes), the tendering of public contracts and speeding up the process for the treatment 
of irregularities, in the context of auditing the Action Plan also focuses on issues including, for example: 

a.  increasing  the  independence  of  the  authorised  audit  bodies  currently  existing  in  the  management 

structures of the relevant ministries and regional councils 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

b.  the overall quality of auditors’ work, and methodological assistance  

c.  as  part  of  the  measures  under  the  Action  Plan,  commencing  from  1.1.2013  audit activities  will  be 
centralised (auditors will be relocated from the managing authorities of the relevant ministries to the 
MF as required by the EC), thus ensuring greater independence and improving the quality of their 
work. 

5.  Most  of  the  ACRs  of  the  Audit  Authority  contained  material  findings  in  relation  to  the  management  and 
control  systems  of  operational  programmes.  For  these  reasons,  the  Audit  Authority  could  not  provide  the 
EC with assurance of the proper functioning of the operational programmes, and in its annual opinion on the 
legality and regularity of expenditures it issued a qualified opinion for most of the operational programmes 
(10  out  of  19  OPs).  In  the  case  of  some  problematic  operational  programmes,  financial  corrections  have 
already been applied based on the findings of the auditors of the AA. 

6.  During audits there are inherent limitations on the detection of serious economic crime. An auditor cannot, 
for  example,  make  use  of  the  means  available  to  law  enforcement  authorities  (audio  surveillance,  IT  and 
other forensic techniques), and frequently does not have access to information from investigation files. The 
Audit Authority works together with all the law enforcement and criminal justice bodies (the Czech Police, 
the  Public  Prosecutor’s Office and  the  courts). The use of certain documents, such as the report from the 
Security Information Service (SIS), is also problematic, because the information designated for the public in 
the SIS report is only of a general nature, and the potential for it to be used in the context of a Structural 
Funds audit is minimal. 

7.  In line with the audit strategies of the Audit Authority approved by the EC for individual OPs, audits were 
carried out which focused on reliance on the work of authorised audit bodies, and material deficiencies were 
found. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

8.  The errors found in public procurement and the evaluation of project applications which are mentioned in 

the ECA report are also frequent findings of the auditors of the Audit Authority.  

9.  In recent years, there have been dramatic developments in particular in the areas of public procurement and 
the decision-making practice of the OPC and the Czech courts, and national institutions are now adopting a 
stricter approach. The final reports from the EC and from the ECA (the 2010 DAS) are delivered very late, 
and  inevitably  this  leads  to  delays  in  the  application  of  the  latest  practices  of  the  EC/ECA  by  the  Audit 
Authority. 

10. It must be pointed out that the ECA report is not based on a representative sample of projects from all the 
operational  programmes  in  the  Czech  Republic  (but  only  OP  Transport  and  ROP  Southeast).  The  ECA 
auditors audited  all of the 8,  respectively 4, projects  of  each  of  these  operational  programmes.  The  Audit 
Authority annually examines 650 projects from all the operational programmes. The conclusions drawn by 
the  ECA  auditors  on  the  basis  of  this  negligible  sample  are  not,  therefore,  conclusive  (especially  from  a 
statistical  perspective)  as  regards  the  system  of  financial  control  and  audit  used  for  all  the  operational 
programmes in the Czech Republic. 

Romania:  

In  2011,  following  the  identification  of  a  series  of  weaknesses  in  the  management  and  control  system  for  the 
Sectoral Operational Programme Human Resources Development, DG Employment commissioned the MA SOP 
HRD  to  draw-up  an  Action  Plan  (RoadMap)  for  the  Managing  Authority  for  Sectoral  Operational  Programme 
Human Resources Development to enhance SOP HRD absorption capacity. The RoadMap is based on a proper 
assessment of the needs and problems encountered in the implementation of projects financed by SOP HRD. The 
plan  is  divided  into  3  lines  of  action,  namely:  increasing  direct  support  provided  to  beneficiaries,  reinforcing 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

administrative  capacity,  and  improving  the  activity  of  the  entities  involved  in  implementing  SOP  HRD.  As 
required by DG Employment, MA SOP HRD reports quarterly the implementation status of RoadMap measures. 
(ACIS)  

United Kingdom:  

Scottish Government Audit Authority (SGAA): We note that the four programmes – Lowlands and Uplands 
Scotland (LUPS), the European Social Fund (ESF), the European Regional Development Fund (ERDF) and the 
Highlands and Islands (H&I) ESF and ERDF – were interrupted in early 2011 but have subsequently been lifted on 
25 July 2011. 

Slovakia: 

Slovak Ministry of Education, Science, Research and Sport: Measures concern the shortcomings defined in the 
Final Commission Audit Report for OP Education (Commission Report No A-Rep 2010-1222) dated 11.5.2012. 
DG HOME – Statement on behalf of Slovak Ministry of Interior:    
Point 1 – The Security and Protection of Freedoms programme is managed directly by the European Commission; 
no shortcomings were found in the projects obtained from the programme by the Slovak Ministry of the Interior. 

Point 2 – SIS II project  
Preparations for the launch of the 2nd generation Schengen Information System (SIS II) are ongoing. Testing is 
currently taking place of the functionalities and it is due to be completed by the end of January 2012 – Slovakia will 
complete testing on 5.1.2012, to be followed by data migration, with launch of the whole system expected for the 
1st quarter of 2013. 
DG MARE – Statement on behalf of  Slovak Ministry of Agriculture and Rural Development: Measures adopted on 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

an action plan to remedy shortcomings  found in the management and control system of the EFF for Slovakia were 
sent in a letter from the Slovak Ministry of Finance dated 14.08.2012 
Slovak Ministry of Transport, Construction and Regional Development - RO OP Transport 
With reference to the findings of the Auditors’ Report on Government Audit No 5/2010 (A336, K2250) the MA for 
OP Transport was sent a Warning Letter (Letter from the Commission’s DG REGIO No REF(2011) 850395 dated 
4.8.2011) concerning the suspension of payments for OP Transport from the Commission. The reply of the MA for 
OP Transport (Remedial measures adopted by the MA for OP Transport) to the Warning Letter was sent to the 
Commission as letter No 06140/2011/SRP/z.58728 dated 09.11.2011. With reference to the preceding list from the 
MA for OP Transport a further letter No 15398/2012/SOPD-32926 dated 11.06.2012 was sent to the Commission ‘s 
DG REGIO concerning further subsequently implemented procedures from the MA for OP Transport as part of 
preventive and remedial measures for the period from 11.11.2011 to 30.05.2012. In its letter No REF Ares (2012) 
802048 dated 03.07.2012, the Commission ‘s DG REGIO sent the Commission’s final reaction to the Warning 
Letter and also advised on the unblocking of payment for the MA of the OP Transport (except for Slovak Railways 
projects). On the matter of suspended payments for Slovak Railways projects, the MA for OP Transport sent the 
Commission letter No 04305/2012/SOPD-36885 dated 25.06.2012 about the state of investigations into suspicions 
of corruption in railway infrastructure projects. In its letter No Ares (2012)1117883 dated 25.09.2012 the 
Commission sent its reply to the explanatory letter of the MA of OP Transport dated 25.06.2012 Payments are still 
suspended at Commission reimbursement level, until the MA for OP Transport provides the Commission with 
satisfactory explanations on the issue of suspicions of corruption and conflict of interest in Slovak Railways 
projects. 

Sweden:  

The Court of Auditors makes no remarks giving rise to comments from Sweden 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

CHAPTER 2 – REVENUE 

Table 2.1  Revenue – Key 

Information 2011 

Netherlands:  

not applicable 

United Kingdom:  

2.5 

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 resources3. In 
addition, Germany, the 
Netherlands, Austria and 
Sweden benefit from a 
reduced call rate for 
VAT, and the 
Netherlands and Sweden 

Her Majesty’s Treasury (HMT): This is just a factual table on revenue and requires no response. 

Sweden:  

The Court of Auditors makes no remarks giving rise to comments from Sweden 

Germany 

None, only implementation of the Own Resources Decision 

Austria:  

According to the text under 2.5, the main risk is "that the Commission makes mistakes in these calculations". Thus, 
Austria is not affected. 

Netherlands:  

not applicable 

United Kingdom 

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

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

have a gross reduction in 
their annual GNI 
contribution for the 
period 2007-20134. The 
principal risk is that the 
Commission makes an 
error in these 
calculations, notably in 
respect of the complex 
UK correction 
calculations. 

3   Article 4 of Decision 
2007/436/EC. This 
reduction was 
approximately 4 billion 
euro in 2011. The 
52 million euro referred 
to in Table 2.1 represents 
the effect of exchange 
rate differences. 

4   Articles 2(4) and 

Sweden:  

The Court of Auditors makes no remarks giving rise to comments from Sweden 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

2.8 

Annual Report 

2(5) of Decision 
2007/436/EC. The 
1 million euro reduction 
in the GNI-based 
contribution in Table 2.1 
is the effect of exchange 
rate differences. 

Annex 1.1, Part 2, of 
chapter 1 describes the 
Court's overall audit 
approach and 
methodology. For the 
audit of revenue, the 
following specific issues 
should be noted: 

(a)  The audit involved 
examination at the 
Commission level 
of a sample of 55 
recovery orders5 
covering all types 
of revenue (see 

United Kingdom:  

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

17

 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Annex 2.1). 

(b)  The assessment of 
systems covered: 

i) 

the systems for 

TOR, VAT-
based and GNI-
based own 
resources; 

ii) 

the 
Commission 
systems 
underlying the 
calculation of 
the UK 
correction 
(including an 
examination of 
the calculation 
of the 
definitive 
amount in 
respect of 

18

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

2007)6; 

iii) 

the 

Commission's 
management of 
fines and 
penalties; 

iv) 

the 
Commission's 
management 
representations, 
in particular 
the Annual 
Activity Report 
of Directorate-
General for 
Budget (DG 
BUDG). 

5 

A 

recovery  order 

19

 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

is the procedure 
by  which 
the 
Authorising 
(AO) 
Officer 
registers 
an 
entitlement  by 
the Commission 
to 
order 
in 
retrieve 
the 
amount  which 
is due. 

6 

See 
paragraph  2.16 
2010 
the 
of 
Annual Report. 

20

 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

2.10 

Annual Report 

The Court carried out an 
assessment of 
supervisory and control 
systems in Germany, 
Spain and France, which 
together contribute more 
than one third of the total 
of TOR. It reviewed their 
accounting systems and 
examined the flow of 
TOR from establishment 
until declaration to the 
Commission in order to 
obtain reasonable 
assurance that the 
amounts recorded were 
accurate and complete. 
The audit included testing 
key controls relating to 
the application of 
preferential duty rates in 
France, Local Clearance 
Procedures (LCP) in 
Germany and Spain, and 

Germany:  

None, only a description of the control activities of the Court 

France:  

La Cour affirme avoir mené des « tests de contrôles clés relatifs à l'application de taux de droit préférentiels (...) et 
au traitement des coûts du fret et de l'assurance ». 
Cette affirmation apparaît discutable. 
Tout d'abord, les tests menés par la Cour (sélection de 31 déclarations d'importation sur le thème de l'origine et de 
50 déclarations sur le thème du traitement du coût du fret et d’assurance), non inscrits sur la lettre d’annonce, ont 
semblé un élément secondaire par comparaison aux autres thèmes de cette mission inscrits, quant à eux, sur la lettre 
d’annonce et le temps consacré à l'examen de cet échantillon (une demi-journée), couplé à l'absence de demandes 
de la part de la Cour au sujet de la réglementation et de la politique des contrôles, en amont ou lors de la mission, 
conduisent les autorités françaises à nuancer cette affirmation. 
A cet égard, en matière de contrôle de la valeur, la méthode de travail des auditeurs s'est déroulée en deux phases 
sur une sélection non aléatoire, à savoir les déclarations portant les incoterms EXW, FOB ou FCA pour lesquelles 
la valeur facturée est inférieure à la valeur en douane (50 déclarations sous le seul et même régime de l'entrepôt) 
puis identique à la valeur en douane (6331 déclarations soit 706281 articles tous régimes confondus). La seconde 
phase s'est déroulée 18 jours après la clôture de la mission des auditeurs en France. 
De  plus,  sur  le  fond,  il  est  admis  que  l'essentiel  du  contrôle  de  l'origine  préférentielle  des  marchandises,  qui 
conditionne l'application du taux de droits préférentiels, repose sur la coopération administrative. Cette coopération 
implique que le pays importateur (ici la France) sollicite, a posteriori et non au moment où l'opérateur réalise les 
formalités de dédouanement, la communication des documents justificatifs de l'origine préférentielle visés par les 
autorités  douanières  du  pays  d'exportation,  et  les  adresse  au  pays  d'exportation,  seul  compétent  pour  apprécier 
l'authenticité du document et la régularité de son émission, comme le confirme une jurisprudence constante de la 

21

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

warehousing and the 
treatment of freight and 
insurance costs in 
Germany, Spain and 
France. 

CJUE. 
Pour les autres sujets, cf point 2.20 infra. 

2.11 

In addition, the Court 
reconciled the seven TOR 
recovery orders included 
in the sample referred to 
in paragraph 2.8(a) with 
the corresponding 

Germany:  

None 

Belgium:  

Budget : N/A Pas d’erreur pour les sept ordres de recouvrement. 

22

 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

monthly statement from 
the Member States 
concerned7. 
7 

Belgium, 
Germany,  Spain 
and 
the 
Netherlands. 

FSE : l’Agence n’est pas concernée par les droits de douane perçus à l’importation (RPT) 
Bureau d’Intervention et de Restitution Belge : néant 
Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 
Autorité d’audit (Région Bruxelles- Capitale) : néant 
SPF Fin. Affaires fiscales : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 
ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 

2.20 

In the Member States 
visited, the Court's audit 
(see paragraph 2.10) 
revealed deficiencies in 
national customs 
supervision in: 

Netherlands:  

not applicable 

Germany:  

Germany has issued a blanket rejection of the Court’s conclusion that the risk analysis system, the local clearance 
procedure, the customs warehousing procedure and the customs value control procedure present significant 
weaknesses which cast doubt on the completeness of the collection of  traditional own resources. 

Spain:  

23

 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

a) the application of 
preferential duty 
rates10;  

b) the control and ex-
post audit of 
Local Clearance 
Procedures 
(LCP)11;  

c)    the ex-post audit 
of customs 
warehousing12;  

d) the risk analysis 

applied at import 
stage13;  

e) the treatment of 
freight and 
insurance costs14.  

Partially 
effective 
customs 
national 
supervision  increases  the 

With regard to the local clearance procedure, measures have been adopted consisting of drawing up of two Internal 
Circulars  (NS  19/2011  of  30  December  and  NS  06/2012  of  21  September  from  the  Director  of  the  Customs  and 
Excise Department) and a ministerial order that is pending approval. 
Inspection of warehouses: the establishments inspection plan will be published at the end of 2012. 

France:  
Selon la Cour « [d]ans les États membres visités, l'audit de la Cour [...] a fait apparaître des insuffisances affectant 
la surveillance douanière au niveau national, en ce qui concerne [(a)] l'application de taux de droit préférentiels 
(...) et [(e)] au traitement des coûts du fret et de l'assurance ». 

S’agissant du point (a), le fondement réglementaire initialement cité par la Cour était erroné, non seulement parce 
qu'il ne visait pas une disposition applicable dans le cadre du SPG, mais également parce qu'il faisait mention de la 
règle traditionnelle de « transport direct ». La Cour a rectifié ses observations en admettant l'application du nouvel 
article 74 des DAC relatif à la présomption de non manipulation, qui remplace la règle du transport direct depuis le 
1er janvier 2011 : 
« Conformément  à  l'article  74-2  des  DAC  pour  le  Système  de  préférences  généralisées  (SPG),  les  autorités 
douanières  peuvent  demander  au  déclarant  de  produire  des  preuves  du  respect  des  dispositions  du  point  1  de 
l'article 74 qui peuvent être apportées par tout moyen, y compris des documents de transport contractuels tels que 
des  connaissements,  ou  des  preuves  factuelles  ou  concrètes  basées  sur  le  marquage  ou  la  numérotation  des 
emballages,  ou  toute  preuve  liée  aux  marchandises  elles-mêmes.  Une  telle  preuve  (ou  une  preuve  de  non 
manipulation  en  vertu  de  l'article  74-1  des  DAC)  n'ayant  été  produite,  bien  que  demandée  préalablement  par  la 
Cour, l'observation est maintenue. » 
En revanche, la Cour n'a pas tiré les conclusions appropriées de cette correction réglementaire. 
En effet, l'article 74-2 dispose que « le respect des dispositions [de la non-manipulation] est présumé, à moins que 
les autorités douanières n'aient des raisons de croire le contraire [...] ». Par conséquent, la faculté dont disposent 

24

 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

that 

risk 
incorrect 
amounts  of  TOR  are 
collected. 
10 
11  

France 
Germany 
and 
Spain.  In  addition 
the  Commission's 
own 
inspections 
of  LCP  revealed 
system 
weaknesses  in  11 
of the 21 Member 
States  it  inspected 
in 2011.  
Spain and France. 
Germany and 

12  
13  
France. 

14  

Spain and France. 

les autorités douanières de solliciter la preuve de la non manipulation est exercée uniquement dans l'hypothèse où 
ces autorités ont un doute sur ce point. Le déclarant n'est pas tenu de présenter cette preuve de façon systématique. 
Dans la mesure où la non manipulation est présumée et qu'une preuve formelle n'est demandée que si les autorités 
ont un doute sur ce point, l'absence de cette preuve à l'appui des deux dossiers identifiés par la Cour ne permet pas 
de conclure au non respect de l'article 74-1 des DAC. Il est réglementairement inexact d'affirmer que le bénéfice de 
la préférence tarifaire doit être refusé pour ce motif. 
Les autorités françaises contestent la conclusion de la Cour sur ce point et maintiennent donc que l'application de 
droits préférentiels pour les deux opérations d'importation en cause n'est pas remise en cause. 

S’agissant du point (c), selon la Cour, les opérateurs devraient faire l’objet d’un audit approfondi au moins une fois 
tous les trois ans et la fréquence des audits en France fait planer un doute concernant l’efficacité des contrôles mis 
en œuvre pour s’assurer de l’exhaustivité de la perception des RPT dans le cas du régime de l’entrepôt douanier. 
Sur les cinquante entrepôts douaniers sélectionnés par la Cour, seuls deux n'ont jamais été audités par les services 
douaniers, ce qui représente une part très faible. 
Sur ces mêmes cinquante entrepôts douaniers sélectionnés, seuls huit n'ont pas été contrôlés dans un intervalle de 
trois ans, ce qui est également assez faible et n'est, contrairement à ce qu'avance la Cour, pas forcément significatif 
en soi, dans la mesure où l'efficacité des contrôles en matière de dédouanement ne s'examine pas à l'aune de leur 
fréquence. 
Le  jugement  de  la  Cour  sur  les  justificatifs  fournis  par  la  direction  régionale  de  tutelle  en  matière  de  contrôles 
semble  excessif,  la  plupart  des  directions  douanières  ayant  pu  justifier  des  contrôles  effectués  (dans  le  cadre  de 
l'autorisation d'entrepôt elle-même ou de la procédure de dédouanement utilisée, ou encore d'audits réalisés sur un 
aspect annexe). La Cour ayant pourtant refusé de prendre en considération des pièces du dossier qui attestaient de la 
réalité  des  contrôles,  la  DGDDI  s'interroge  sur  la  teneur  des  informations  qui  selon  elle  doivent  impérativement 
apparaître dans les comptes-rendus des contrôles réalisés. 
Dans la dernière version de la Constatation préliminaire n° 1005 du relevé de la Cour relatif à la mission d'audit 

25

 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

effectuée en France en octobre 2011 dans le cadre de la DAS 2011, la DGDDI demande aux auditeurs de préciser la 
teneur  des  informations  qui  selon  eux  doivent  apparaître  dans  les  comptes-rendus  des  contrôles  réalisés  par  la 
douane. Mais il est indiqué sur le même document que la Cour a pris en compte les éléments apportés a posteriori 
par les directions régionales et a abandonné toute critique en la matière. 
L'informatisation début 2013 du processus de délivrance des autorisations d'entrepôt douanier par le biais de la télé-
procédure  SOPRANO  va  en  tout  état  de  cause  conduire  les  services  douaniers  à  procéder  à  un  réexamen  des 
autorisations  d'entrepôt  douanier  déjà  délivrées  (avant  intégration  dans  le  système  informatique),  ce  qui  sera  de 
nature à améliorer leur intégration dans la politique des contrôles mise en place au sein des directions régionales. 

S’agissant  du  point  (d),  selon  la  Cour,  le  système  de  dédouanement  ne  comporte  aucun  élément  aléatoire  pour 
sélectionner les déclarations à soumettre aux contrôles et, d'après des données synthétiques relatives à la réalisation 
d’une  analyse  de  risque  et  de  contrôles  dans  la  région  de  Bretagne  pour  la  période  allant  de  février  à  août 2011, 
seuls 9,2 % des déclarations jugées à risque ont ensuite fait l’objet d’un contrôle correspondant. 
La  sélection  aléatoire  automatisée  a  été  implantée  dans  le  système  de  dédouanement  en  ligne  par  traitement 
automatisé Delt@ (-C, -D et –X) le 8 décembre 2011. Les déclarations sont sélectionnées de manière aléatoire par 
le  système  parmi  les  déclarations  validées  et  orientées  en  circuit  vert.  Le  taux  de  sélection  est  de  0,02%  à 
l'importation et à l'exportation. Ce point ne nécessite donc plus que des mesures soient prises par la DGDDI. 
S'agissant de la constatation que les déclarations en douane ciblées par l'analyse de risque automatisée ne font pas 
suffisamment l'objet d'un contrôle douanier, en juin 2012, la DGDDI a remédié à cela en modifiant les circuits de 
contrôle des déclarations en douane. L'objectif recherché est d'améliorer le ciblage en distinguant les risques réels 
des risques potentiels, tout en accélérant le dédouanement des marchandises correctement déclarées a priori. 
Cette modification comporte : 

• 

la création d'un circuit noir 
Afin  de  bloquer  les  marchandises  dont  l'exportation  ou  l'importation  est  prohibée  ou  restreinte,  et  de 
distinguer les risques réels des risques potentiels, il est apparu nécessaire de créer un circuit noir avec timer 

26

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

• 

• 

illimité (profil bloquant) pour les DELT@ (DELT@-D inclus) 
l'allongement du timer pour les déclarations en circuit rouge 
Afin  d'éviter  que  les  déclarations  ne  soient  mises  en  contrôle  abusivement  dans  le  seul  but  d'éviter  leur 
libération et non pour être contrôlées, la possibilité d'allonger le timer rouge pour une déclaration donnée est 
proposée à l'agent. Ce dernier dispose ainsi d'un délai de réflexion supplémentaire avant de décider ou non 
de la mise en contrôle. 
Afin de ne pas nuire à la fluidité du trafic, les agents ont la possibilité d'allonger la durée du timer pour les 
déclarations en circuit rouge uniquement, selon les modalités suivantes : 
– le timer ne doit être prolongé qu'une seule fois d'un temps égal à la durée initiale du timer. La durée du 
timer peut donc être doublée. L'agent chargé de la veille écran a la possibilité de l'écourter en contrôlant la 
déclaration ou en la libérant ; 
– l'allongement du timer ne doit intervenir qu'une fois la déclaration ouverte ; 
– l'allongement du timer ne doit pas être « suspensif », c'est-à-dire qu'il ne doit pas tenir compte des horaires 
de  fermeture  du  bureau.  Par  exemple,  si  la  durée  du  timer  est  de  15  minutes  et  que  l'agent  demande 
l'allongement  du  timer  à  11h55  (alors  que  le  bureau  ferme  entre  12h00  et  14h00),  la  fin  du  timer  doit 
intervenir à 12h10 et non à 14h10 
la libération immédiate 24h/24 des déclarations en circuit vert 
L'agent  chargé  de  la  veille  écran  n'a  plus  accès  aux  déclarations  orientées  en  circuit  vert  qu'en  mode 
consultation.  Cela  rend  impossible  toute  action  de  surveillance  ou  de  mise  à  l'état  « contrôle »  de  ces 
déclarations. 

Les autorités françaises considèrent donc qu'elles ont pris les mesures de correction nécessaires. 

S’agissant  du  point  (e),  les  anomalies  retenues  sur  les  15  déclarations  en  douane  sur  les  50  déclarations 
d'importation  sous  le  seul  régime  de  l'entrepôt  montrent  une  mauvaise  utilisation  des  incoterms  qui,  pour  5 
déclarations, est sans incidence sur les ressources propres traditionnelles. En effet, il est démontré que : 

27

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

- pour deux déclarations, l'opérateur déclare un prix CIF avec un incoterm FOB, 
- pour trois déclarations la valeur en douane est correctement déclarée. 
Les autorités françaises considèrent également que la demande portant sur 6 331 déclarations supplémentaires, 
communiquée après la clôture de la mission, ne relève pas, d'une part, du périmètre initial de la mission et, d'autre 
part, que les déclarations portant sur des valeurs facturées égales aux valeurs en douane ne sont pas nécessairement 
des anomalies, comme démontré dans l'échantillon des 50 déclarations contrôlées par les auditeurs. 
Belgium:  

Budget : voir ci-dessus Chapitre 1, Tableau 1.4. 
FSE : l’Agence n’est pas concernée par les droits de douane perçus à l’importation (RPT) 
Bureau d’Intervention et de Restitution Belge : néant 
Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 
Autorité d’audit (Région Bruxelles- Capitale) : néant 
SPF Fin. Affaires fiscales  : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 
ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 

2.21 

In its 2010 Annual 
Report the Court reported 
that, for one A statement 
relating to a Member 
State15, it was not 
possible to reconcile the 
amount of TOR declared 
with the underlying 
accounting documents. In 
DG BUDG's Annual 
Activity Report for 2011 
there is now a reservation 
on the reliability of the 
accounting data of this 
Member State. 

Paragraph 2.15: 

15 
Belgium. 

28

 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Table 2.2  VAT reservations as at 

Austria:  

Member State reply 

31 December 2011 

On account of the audit in autumn 2011, it is not possible to establish conclusively the number of reservations as at 
31.12.2011. There was an intensive bilateral exchange in the period following the control of VAT own resources, 
and the latest situation with regard to the number of reservations upheld will be confirmed only in the 
comprehensive audit report which is expected at the end of  2012. As at November 2012 three reservations in 
connection with Austria can be confirmed in the following areas: WAR; Infringement proceedings No 2007/2453 – 
application of the Sixth VAT Directive (VAT exemptions); Infringement proceedings No 2010/2055 – application 
of the Sixth VAT Directive (VAT exemption for postal services). The above-mentioned reservations come from the 
draft audit report and reflect the current situation (as at 20.11.2012). 
Belgium:  

Budget : la réponse à cette remarque sera transmise sous peu. 
SPF Fin. Affaires fiscales : 
La mesure consiste à entamer un contrôle multilatéral avec les Pays-Bas et le Royaume-Uni (code FMCS/010). La 
première réunion de coordination a eu lieu le 15 octobre 2012. Sur la base de ces premières discussions, les États 
membres concernés poursuivent actuellement leur réflexion quant à l'opportunité et à la manière de poursuivre le 
contrôle multilatéral. Quoi qu'il en soit, l'administration belge réexamine en ce moment de manière globale 
l'ensemble de la problématique des livraisons et services à bord des navires, trains et avions lors de la partie intra-
communautaire du transport de personne. Cette action se place plus spécifiquement dans le cadre d'un rapport 
récent des services de la Commission européenne qui  touche directement à la problématique abordée dans le cadre 
du contrôle multilatéral. Report from the commission to the council on the place of taxation of the supply of goods 
and the supply of services, for passengers on board ships, aircraft, trains or buses drawn up in accordance with 
Article 37(3) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, 
22.10.2012).   

29

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

Bureau d’Intervention et de Restitution Belge : néant 
Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 
Autorité d’audit (Région Bruxelles- Capitale) : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
FSE : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 
ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 
Bulgaria:  

New calculations have been presented or are being prepared, as recommended by the Commission inspectors, on 
three of the reservations. Legislative amendments are being made in respect of the other reservations.   

Cyprus:  

On 31 December four reservations were pending. The summary report on the findings and observations arising 
from the Commission inspection in Cyprus on the VAT bases for 2005-2007 was sent to the Cypriot authorities on 
31 January 2011. According to this report, of the six reservations pending in 2010, two were lifted by the 
Commission and four were still pending at the end of 2011.  

30

 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

The Cypriot authorities started action to remove the Commission’ reservations immediately after the conclusion of 
the inspection by Commission 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 (Observations) on 16 
September 2010. The Cypriot authorities continued their efforts to remove the remaining reservations by the end of 
2011. 

From 6 to 10 February 2012 a team from the Commission carried out an inspection in Cyprus on the VAT own 
resources bases statements for the years 2008-2010. During the inspection various points raised by the Commission 
inspectors were presented and explained, and there was discussion of points where the VAT own resources bases 
statements needed improvement and/or further explanation.  

The above inspection visit in Cyprus resulted in the removal of all four pending reservations. 

Denmark:  

As of 31 December 2011, eight reservations have been registered concerning Danish VAT compensation. 

1. One reservation concerns the correction for zero-rated newspapers. The compensation is based on information 
from Statistics Denmark on the sale of newspapers. Statistics Denmark’s definition does not cover Weekend Avisen 
or Computerworld, and a standard correction for these has been carried out in the compensation. The Commission 
has asked that the correction be carried out on the basis of annual turnover figures for these two newspapers. The 
desired changes were performed in 2012, and the reservation was subsequently cancelled. 

2. One reservation concerns the VAT exemption for small enterprises (artists). A new computation has been carried 

31

 
 
 
 
 
 
  
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

out, which the Commission approved at the verification visit in June 2012. The reservation was therefore cancelled 
in 2012. 

3. One reservation concerns foreign long-distance buses and taxis engaged in transport within Denmark. A 
computation concerning Swedish taxis that run to and from airports has been produced in connection with the 
verification visit in 2012, while there is still an outstanding problem concerning long-distance buses which do not 
have a sales office in Denmark and which are therefore not included in Danish transport statistics. Scope for an 
approximate calculation is being investigated. 

4. One reservation concerns the inclusion of the deficit cover in public bus transport with a view to adjustment back 
to 2006. Because the Commission has cancelled its reservation (according to which the deficit cover need no longer 
be included in the compensation), the reservation was accordingly cancelled in 2012. The excessive compensation 
will then be adjusted as from 2006. 

5. One reservation concerns the exemption for repair and maintenance of aircraft, the illegality of which became 
known in connection with the Cimber Air judgment relating to domestic flights (EU judgment C-382). The 
corrections were dealt with at the verification visit in 2012, and there is still an unexplained question concerning the 
computation performed for flying schools’ and clubs’ repair and maintenance of aircraft, which was not resolved at 
the verification visit in 2012. 

6. One reservation concerns a treaty infringement case concerning VAT group schemes. A judgment has still not 
been handed down in the case. 

7. One reservation concerns a treaty infringement case concerning VAT exemption for charities. A judgment has 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

still not been handed down in the case. 

8. One reservation concerns exemption for catering services provided on board transport (ferries in foreign trade 
between EU countries). There have been doubts about the interpretation of the VAT rules in force in this area. 
There is also uncertainty about how such a computation could be performed. 

Spain:  
Table 2.2 in Annex I of the Court of Auditors' Report contains three outstanding reservations as of 31 December 
2011 concerning VAT in Spain. Two of these arise from infringement proceedings opened against Spanish 
legislation for violation of EU law concerning: 

-  The special VAT regime for travel agencies. Reservation issued by the European Commission in 2003. 

With the information available it is not possible to ascertain whether an adjustment is needed in the VAT 
base and if so, the amount of the adjustment, pending a decision on the infringement proceeding and 
pending guidance from the Commission to all the Member States affected by this reservation. 

-  Exemption from VAT on services provided by notaries public in relation to certain operations. Reservation 
issued by the European Commission in 2008. Spain will include an adjustment once the possibility of its 
quantification has been verified. 

The third reservation issued by the Commission from 2009 onwards concerns the method of calculating the 
adjustment in revenues from farming under the flat-rate scheme. Spain will propose to the Commission an 
improvement in the method of selecting the group affected by this calculation, which could resolve the 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

Commission’s objections concerning this matter. 

Finland:  
The Commission's most recent inspection in Finland to examine VAT-based own resources calculations took place 
between 22 and 26 March 2010. The next inspection will take place between 10 and 14 December 2012.  

The last inspection dealt with the 2006-2008 VAT base statements. 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. At the end of 2010 
there were eight reservations, of which two were laid down by Finland. 

One reservation was lifted in 2011. 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 reply concerning the statement in December 2010. The reservation was lifted in 
a letter dated 1 April 2011 (Ares(2011)361398). 

In 2011,three new reservations were set. In the draft summary report of the inspection, the Commission added a 
new reservation that had not been dealt with during the inspection. The reservation concerned the fuel calculation 
included in the car compensation related to the VAT own resources base (item 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, and the reservation will be lifted.  

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

In its replies contained in the 2010 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 satisfactorily in autumn 2011, and the reservation will be 
lifted.  

In a letter dated 7 July 2011 (Ares(2011)743162), the Commission sent a claim for payment and notified that a new 
reservation concerning tax exemptions for passenger transport services between Member States was being too 
broadly applied to also cover restaurant and catering services. The reservation applied from 2007-2010. Finland 
delivered the calculations requested and accounted for the corresponding payments with default interest in autumn 
2011. At the same time, Finland set its own reservation for the same topic. The calculations are still being 
inspected. 

As a result of the above-mentioned changes, the number of remaining VAT reservations was ten as at 31 December 
2011, of which three were reservations made by Finland. The oldest reservation is Finland’s reservation concerning 
the Åland Islands, made in 1995. Three reservations concern infringement procedures. The summary report of the 
inspection concerning 2006-2008 was received on 8 February 2012. Eight of the reservations it refers to remain.  

France:  
Il subsiste encore sept réserves après le dernier contrôle sur place effectué par la Commission européenne du 28 
novembre au 2 décembre 2011.  
Trois réserves portent sur des litiges en phase juridictionnelle : 
Pour deux d’entre eux, la Cour de justice de l’union européenne, a déjà rendu son arrêt, il s’agit des litiges suivants 

35

 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

:  

Member State reply 

(cid:190) le taux réduit sur les chevaux de courses, (l’arrêt de la CJUE a été rendu le 8 mars 2012 ; la France a 

modifié les dispositions du code général des impôts, cependant la commission considère ces nouvelles 
dispositions comme demeurant non-conformes au droit communautaire) 

(cid:190) la taxation de l’électricité, (L’arrêt de la CJUE a déjà été rendu et la directive énergie a été transposée en 

droit français par la loi du 7 décembre 2010 portant organisation du marché de l’électricité) 

Pour le dernier, la Cour n’a pas encore rendu son arrêt, il s’agit de : 

(cid:190) la taxation au taux réduit des services à domicile  

Deux réserves portent sur sujets en phase précontentieuse, il s’agit de :  

(cid:190) la mise à disposition de bateaux, (la procédure juridictionnelle n’est pas encore engagée, la commission 

ayant adressé aux autorités françaises, en date du 21 novembre 2012,  un avis motivé au titre de l'art 258 
du TFUE préalable à l’ouverture d’un contentieux juridictionnel) 

(cid:190) les transports de biens entre la France continentale et la Corse, la procédure juridictionnelle n’est pas encore 

engagée 

Une réserve porte sur un sujet technique (l’impact des terrains à bâtir sur le calcul du taux moyen pondéré) dont la 
Commission pourra vérifier les éléments lors du prochain contrôle sur place (en septembre 2013). 
La dernière réserve porte quant à elle sur des divergences d’interprétation des textes communautaires, qui pourront 
être abordées lors du prochain contrôle sur place et qui concernent le calcul de la compensation relative à la 
distribution d’eau en exonération de taxe. 

Greece:  
With regard to the number of the (7) outstanding reservations (control of VAT own resources - 9/2010), we would 
like to inform you that the Commission controllers have announced in a letter their response to the comments of our 
country submitted on 13 May 2011 and have removed two (2) more reservations. This has resulted in the number of 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

outstanding reservations being limited to five (5). 

Ireland:  
Following recent ACOR meeting in Brussels, the number of reservations now stands at 4, the reservation from 
1998 has been lifted. 

Italy:  
Not necessary 

Lithuania:  
Having  regard  to  the  2009  control  report  on  the  VAT-based  own  resources  in  Lithuania  by  the  European 
Commission,  on  5  March  2010  Lithuania  submitted  its  observations  to  the  Commission  presenting  updated 
calculations  with  a  view  to  rectifying  errors  and  lifting  reservations  identified  during  the  control  visit.    At  the 
request of the European Commission, additional explanations were presented on 10 May 2010 and 22 June 2010.  

On 22 October 2011 at the meeting of the Advisory Committee on Own Resources of the European Commission 
(ACOR)  the  EC  representatives  presented  the  2009  control  report  and  a  summary  document  of  Lithuania’s 
observations  and  explanations  lifting  5  of  7  reservations.  2  reservations  remained  valid  until  the  European 
Commission representatives scrutinised the justification documents for rectifications (the calculation methodology 
presented by Lithuania was acceptable).  

During  the  VAT-based  own  resources  control  visit  in  Lithuania  on  18-22  June  2012  the  representatives  of  the 
European  Commission  scrutinised  the  justification  documents  for  rectifications.  Those  documents  contained 
official  data  used  for  calculations  necessary  for  lifting  the  remaining  2  reservations.  After  this  control  visit  the 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

European  Commission  representatives  lifted  the  2  reservations  valid  until  31  December  2011.  Lifting  of  those 
reservations  was  officially  confirmed  in  the  2012  VAT-based  own  resources  control  report  by  the  European 
Commission published on 12 September 2012. 

Malta:  
The Commission’s summary report dated 5 July 2012 shows that after the control visit of November 2011, 9 
reservations were lifted while around two reservations were placed. This meant that Malta only had 3 outstanding 
reservations as at 5 July 2012. The National Statistical Office will address the said outstanding reservations in the 
next VAT Declaration, due by 31 July 2013. It should be noted that Malta’s VAT base far exceeds 50% of its GNI 
and is thus capped at 50% of its GNI of own resources. 

Netherlands:  
The numbers mentioned by the Netherlands have been correctly reproduced. The outstanding reservations will be 
discussed with the Dutch authorities during the European Commission’s planned control visit in June 2013. 

Poland:  
In order to remove the reservations, corrections of the statistical data were made in the verified reports for the years 
2008-2010 and in the report for 2011 the data was recognised accordingly. Changes must be approved by the EC. 

Portugal:  
A -  Infringement procedures 

1. Farmers 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

In accordance with the ECJ's judgment of 8 March 2012, the state budget for 2013 provides for the revocation 
of Article 9, No 33 of the Portuguese VAT Code, so that transactions carried out by farmers will in future be 
covered by the general VAT rules. This will mean that such transactions will no longer be exempt; rather, they 
will be subject to VAT at the reduced rate, and will be included in List 1, which is an annex to the VAT Code. 

2. Travel Agencies 

As the ECJ  has not so far handed down a judgment on this subject, there is no change in the tax authorities’ 
interpretation. 

3. Taxes on tolls  

       Given that European law has been amended in this respect, the procedure against Portugal is now closed. 

 B   – Other reservations 

       1.  Transport 

As regards compensation in respect of own resources in connection with the total exemption applicable between 
mainland  Portugal  and  the  Portuguese  islands  and  vice-versa,  it  is  the  tax  authorities’  understanding  that 
Portugal is not to determine such compensation on the basis  of  a  statement  in  the  Council's  minutes,  as  such 
statements do not supercede the  Treaty of Accession of  Portugal  to  the  European  Communities,  according  to 
which  the  derogation  provided  for  by  Article  15(15)  of  the  Sixth  Directive  (now  Article  149  of  the  VAT 
Directive) does not affect the calculation of own resources. 

39

 
 
 
 
 
 
        
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

4. Tax on nappies 

Since these are deemed to be 'similar products', as referred to in 2.4(c) of List 1 in the annex to the VAT Code, 
the transfer of such products is taxed at the reduced rate. 

Czech Republic:  
The large number of reservations was, amongst other things, explained at the 68th meeting of ACOR - VAT, where 
the commissioner for audit stated that the large number of reservations in regard to the calculation of the EU’s VAT 
own resources base was caused by the breakdown of the general reservation in the calculation of the VAT weighted 
arithmetic rate (falls within the competence of the Czech Statistical Office - CSO), and also by 5 irregularities 
(“infringements”) in connection with EU VAT legislation. 

Romania:  
Following the submission of Romania’s observations to the European Commission Report on VAT Base 
Declarations of its own resources for 2007 and 2008, the reservation placed by COM on VAT receipts – amounts 
for electronic commerce was raised. The checking cycle for 2007-2008 closed with the submission by the COM of 
its conclusions as adopted within the Advisory Committee on Own Resources (ACOR) – VAT of 20.10.2011. As 
regards the 4 remaining reservations, efforts are being made to solve them. UCRBUE 

United Kingdom: 
Her Majesty’s Revenue and Customs (HMRC): The Commission carried out a VAT own resources control visit to 
the UK during October 2012.  As a result, it is anticipated that a number of the outstanding reservations for the UK 
will be lifted. Confirmation will be included in the Commission’s report on the visit (due to be issued in mid-

40

 
 
 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

January 2013). 

Member State reply 

Slovakia: 
Slovak Ministry of Finance: The Slovak Republic has adopted measures to remedy the reservation stated on the 
calculation of the Harmonised Basis for VAT for the years 2008 to 2010. The services of international water 
transport provided by foreign entities were calculated in addition and sent to the Commission on 31.8.2012. The 
Commission assessed this additional calculation as being relevant and correct and on 11.10.2012 in its Summary 
Report on the Results and Findings arising from inspection of the VAT base proposed that the stated reservation be 
cancelled.   

Sweden:  
The Court of Auditors makes no remarks giving rise to comments from Sweden 

Romania:  

General reservations on the GNI data of Romania and Bulgaria have been applied since their accession to the 
European Union (the last to join in 2007), while on the GNI data of other Member States there are specific 
reservations. Romania’s GNI data were subjected to the standard verification process by the European Commission 
(Eurostat) under Council Regulation No. 1287/2003 of 15 July 2003 on the harmonization of GNI at market prices. 
The direct methodological checks on the GNI data resulted in certain Action Points to be solved by Romania until 
2014. The first solutions to Action Points were submitted for approval by Eurostat within the GNI Quality Report 
and the GNI Questionnaire of 21 September 2012. INS 

41

2.26 

General reservations18 
existed at the end of 2011 
on the GNI data of EU-15 
Member States for the 
period 2002 to 2007, EU-
10 Member States for 
2004-2007, and Bulgaria 
and Romania for 2007. 

18   Article 10(7) of 
Regulation (EC, 

 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

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 by either the 
Commission or the 
Member State. These 
points are known as 
reservations. A general 
reservation covers all the 
data of a Member State. 

Commission's reply to 
2.26 

2.26. As the Court 
acknowledges in 
paragraph 2.28 the 
situation had changed 
markedly by January 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

United Kingdom:  

HMT: ONS have resolved outstanding issues on UK GNP reservations and these should be lifted shortly. 

2.27 

Annual Report 

2012 when general 
reservations remained in 
place only for Bulgaria 
and Romania 

At the beginning of 2011, 
there were four open 
specific GNP 
reservations19 relating to 
the period 1995 to 2001. 
The Commission 
subsequently lifted two 
reservations concerning 
the United Kingdom, 
leaving a balance of two30 
at the end of 2011. 
19 A specific 

reservation covers 
discrete elements of GNI 
(GNP until 2001, GNI 
thereafter) such as gross 
value added of selected 
activities, total final 

3 

These concerned Greece and the United Kingdom and related to methodological and compilation aspects. 

43

 
 
 
                                                 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

consumption expenditure 
or gross operating surplus 
and mixed income. 

20 These 
concerned Greece and the 
United Kingdom and 
related to methodological 
and compilation aspects. 

Commission reply to 2.27 

The Commission is 
making progress via its 
cooperation with the two 
countries that still have 
GNP reservations for the 
period 1995-2001 (1 for 
Greece and 1 for the 
United Kingdom at end 
2011) so that these 
reservations can be lifted 

Based on its audit work24, 
the Court concludes that, 
for the year ended 

2.35 

United Kingdom: 

HMT: This just includes reference to the fact that the UK receives an abatement and requires no response 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

31 December 2011, 

(a)  Member States' 
declarations and 
payments of TOR, 

(b) 

the Commission's 
calculation of 
Member States' 
contributions on the 
basis of the VAT 
and GNI data 
received from 
Member States, 

(c) 

the calculation of 
the UK correction, 
and 

(d)  other revenue 

were free from material 
error. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

2.36 

Annual Report 

24 

For reasons 

explained in paragraphs 
2.13 and 2.14, this 
conclusion does not 
provide an assessment of 
the quality of VAT or 
GNI data that were 
received by the 
Commission from 
Member States 
Commission reply to 2.36 

2.36.(a) The Commission 
will follow up the Court's 
findings with the Member 
States concerned. 

2.36.(b) The number and 
proportion of reservations 
long-outstanding 
according to the Court's 
definition continues to 
decrease – it is now less 
than 10% of the total. 
There will always be 

United Kingdom:  

HMT: ONS have resolved outstanding issues on UK GNP reservations and these should be lifted shortly. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

some long-outstanding 
reservations as there may 
be many ramifications for 
Member States to explore 
and to remedy. 

There has been an 
ongoing improvement in 
the frequency of 
consultations with 
Member States plus 
enhancement of the levels 
of cooperation between 
the Commission and 
Member States which 
will continue. 

2.36.(c) The 
administrative processes 
necessary to provide each 
of the 25 Member States 
simultaneously with 
confirmatory official 
notification of the lifting 
of the general 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

reservations and the 
specific reservations set 
concerning them were 
completed in early 2012. 

2.36.(d) The Commission 
is making progress via its 
cooperation with the two 
countries that still have 
GNP reservations for the 
period 1995-2001 (1 for 
Greece and 1 for the 
United Kingdom at end 
2011) so that these 
reservations can be lifted 

Annex 
2.2 

Results of examination of 
systems for revenue 

United Kingdom:  

HMT: This relates to the Commission’s calculation of the UK abatement and again no UK response needed. 

Chapter 3 – Agriculture : Market and Direct Support 

3.4. 

The main measures 
financed by EAGF are: 

- 

The direct aid 

Hungary:  

Community legislation on aid has been reviewed and changes to it followed up continuously since Hungary’s 
accession. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Poland:  

The paragraph informs about how the JPO system functions in Poland and does not include any reservations.  

Czech Republic:  

Not applicable – there is no error involved. 

Romania:  

APIA 
As of 2007, Romania applies the single area payment scheme (SAPS) which involves granting direct payments as 
single payment per hectare, whereas the payment is done uniformly by dividing the national ceiling allocated to the 
Member State to the eligible area, which is the utilized agricultural area of the country. 

Slovakia:  

Agricultural Payments Agency: Appropriate measures were adopted for the findings, see Appendix II 
Slovak Ministry of Agriculture and Rural Development: considers the Commission reactions to the ECA comments 
as adequate. 

Annual Report 

“Single Payment 
Scheme” (SPS). 
SPS payments are 
based on 
"entitlements"4 
each of which is 
activated with one 
hectare of eligible 
land declared by 
the farmer. In 2011 
SPS represented 
31 082 million euro 
of expenditure 
(77 % of direct 
aids).  

The direct aid 
“Single Area 
Payment 
Scheme” (SAPS) 
provides for the 
payment of uniform 
amounts per 
eligible hectare of 

- 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

agricultural land 
and is currently 
applied in 10 of the 
Member States5 that 
joined the EU in 
2004 and 2007. In 
2011 SAPS 
accounted for 
5 084 million euro 
of expenditure 
(13 % of direct 
aids). 

Other direct aid 
schemes linked to 
specific types of 
agricultural 
production (such as 
suckler cows, 
cotton etc). In 2011 
those schemes 
accounted for 
4 012 million euro 
of expenditure 

- 

50

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

- 

Annual Report 

(10 % of direct 
aids). 

Interventions in 
agricultural 
markets covering 
e.g. intervention 
storage, export 
refunds, food 
programmes and 
specific support for 
the fruit/vegetable 
and the wine 
sectors (in total 
amounting to 
3 533 million euro 
in 2011). 

4   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 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

3.9. 

Annual Report 

legislation 

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

Annex 1.1, Part 2, of 
Chapter 1 describes the 
Court’s overall audit 
approach and 
methodology. For the 
audit of market and direct 
support for agriculture 
the following specific 
issues should be noted: 

- 

the audit involved 
the examination of a 
sample  

Austria:  

See points 3.14 and 3.15 

Denmark:  

The Danish AgriFish Agency notes the Court of Auditors’ comments under point 3.9 and deals more specifically 
with the criticism in points 3.19, 3.22, 3.23, and 3.24 below.   

Finland:  

This section describes the actions of the Court of Auditors, which the description shows as having been carried out. 
The Member State has no comments to make in this respect. The inspection results reported as a result of the Court 
of Auditors’ work are discussed in the later sections of this document. 

Hungary:  

- 

of 180 interim and 

Community and national aid conditions are being kept up-to-date and applied continuously. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

final payments; 

Italy: 

Member State reply 

See following points 

Romania:  

See the answer to question 3.34 

- 

as regards cross 
compliance, the 
Court focused its 
testing on selected 
GAEC obligations9 
and SMRs10. Where 
cross compliance 
obligations were not 
met, the Court 
treated such cases as 
errors11. These errors 
were included in the 
calculation of the 
overall error rate 
provided that it can 
be established that 
the error already 
existed in the year in 
which the farmer 
applied for aid12. 
This represents a 
change from 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

previous years, when 
the failure to meet 
cross compliance 
obligations was not 
included in the error 
rate calculation; 

reductions and 
exclusions (applied 
in cases where 
beneficiaries of EU 
aid over-claim the 
actual area or 
number of animals13) 
are not included in 
the Court’s error rate 
calculation; 

the assessment of 
systems covered 
IACS in five paying 
agencies in Member 
States applying the 
SPS – Austria, 
Denmark, Finland, 

- 

- 

54

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

- 

Annual Report 

Italy (Lombardia) 
and Spain (Galicia) – 
and in one paying 
agency in a Member 
State applying SAPS 
(Hungary); 

the Court examined 
the implementation 
(at national level) of 
cross compliance 
standards and the 
control systems 
implemented by 
Member States. The 
results of this work 
are presented in 
Chapter 4 at 
paragraphs 4.30 to 
4.32 but are also 
applicable to this 
Chapter; 

- 

the Court reviewed 
the work carried out 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

by the certification 
bodies of Romania 
and Bulgaria under 
the new 
reinforcement of 
assurance 
procedure14; 

the review of the 
Commission’s 
management 
representations 
covered the annual 
activity report of DG 
AGRI concerning 
EAGF-related 
issues; 

in the context of the 
Commission’s 
clearance of 
accounts procedure 
the Court reviewed 
17 of the EAGF 
certification bodies’ 

- 

- 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

certificates and 
reports relating to 17 
paying agencies. The 
results are presented 
in Chapter 4 (see 
paragraph 4.36). 

9  Avoiding the 
encroachment of 
unwanted vegetation, 
retention of terraces, 
maintenance of olive 
groves and respect of 
minimum livestock 
stocking rates or mowing 
obligations. 

10 
4 
SMR 
relating  to  the 
nitrates 
Directive. 

11 
Cross 
compliance 
obligations  are 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

substantive 
legal 
requirements 
that  must  be 
all 
met 
by 
recipients 
of 
direct  aid  and 
the  basic 
are 
and 
in  many 
cases  the  only 
conditions to be 
respected 
in 
order  to  justify 
the  payment  of 
the  full  amount 
of 
direct 
payments, 
hence 
Court’s 
decision to treat 
failure  to  meet 
such 
requirements as 
errors. 

the 

For  each 

12 
infringement, 
the 

national 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

for 
system 
reduction 
of 
payments  has 
been  used  for 
the 
quantification 
of the error. 

13

Regulatio
(EC)  No 

n 
1122/2009 
that, 
provides 
where 
the 
claimed  area  is 
to  be 
found 
overstated 
by 
more  than  3 % 
or two hectares, 
the  aid  amount 
be 
shall 
on 
calculated 
the  basis  of  the 
area 
determined 
by 
reduced 
twice  the  area 
claimed 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

irregularly. 
If 
the difference is 
more 
than 
20 %  no  aid 
shall be granted 
for 
crop 
the 
group 
concerned. 
Similar 
provisions 
apply  to  animal 
premia. 

See 

14 
paragraphs 
3.34 and 3.35. 

3.14. 

Commission’s reply to 
3.14 and 3.15 

3.14 and 3.15. The 
Commission considers 
that IACS, which 
accounts for 91 % of total 
EAGF expenditure, is 
generally an effective 
control system for 

Austria:  

Additional on-the-spot checks were carried out in 2012 for improving the administration of the Land Parcel 
Identification System (LPIS). In order to enhance the internal control system, new quality controls were introduced 
that become effective from the end of 2012 – ongoing measures are being taken. 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

limiting the risk of error 
or irregular expenditure. 

The overall effectiveness 
and constant 
improvement of the IACS 
is confirmed by the 
results of the conformity 
audits which the 
Commission has carried 
out over the past years in 
all Member States and by 
the low error rate 
indicated in the control 
statistics which it 
receives from Member 
States. These statistics 
are verified and validated 
by the certification bodies 
and show a level of undue 
payments which is below 
the 2 % materiality 
threshold. 

Remaining deficiencies 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

are generally of a lesser 
nature. Many of these 
deficiencies pertain to a 
rather limited scope, e.g. 
some kind of alpine 
pastures in Austria, and 
are not undermining 
seriously the effectiveness 
of IACS. All these 
deficiencies are followed 
up through conformity 
clearance procedures 
which ensure that the risk 
to the EU budget is 
adequately covered. 

Given that the 
deficiencies the Court 
detected in Austria are of 
a minor nature, the 
Commission considers 
the supervisory and 
control system in Austria 
to be effective. 

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Paragraph  Observation in the 2011 

Member State reply 

3.19. 

Annual Report 

EU legislation provides 
that after expiry of a 
specified deadline, 
farmers can no longer 
declare additional parcels 
and that any anomaly 
detected by the paying 
agency will lead to a 
reduction of the aid 
amount. However, the 
administration may 
correct a claim at any 
time without applying an 
aid reduction in the case 
of an obvious error 
defined as an 
inconsistency21 which 
becomes apparent from 
the data contained in the 
claim itself. The Court 
found that four paying 
agencies (Denmark, 
Finland, Italy 
(Lombardia) and 

Denmark:  

The Danish AgriFish Agency agrees on the criticism raised by the Court of Auditors in the specific cases. 
Instructions for case handlers have been rectified. 

Finland:  

See the reply in Annex II, in the section entitled “2.2. Obvious error corrections do not meet the obvious error 
concept”. 

Italy:  

The ECA has criticised the use of the obvious error concept  to accept applications for insurance contributions 
under Article 68 for farms which, although they had concluded the insurance policy, did not cross the application 
for contribution box in the 2010 single application. 
OPLO (Lombardy paying agency) considered it admissible to accept the obvious error request on the following 
grounds: 
• 

in order to apply for the contribution, a flag had to be inserted in a box in the aid application. The problem 

was a box that had not been filled in, and as it was the first time it might have been an oversight; 

• 
• 

the good faith of the farmer and no possibility of fraud; 
an error was detected by the paying agency when the individual applications were being checked against the 
supporting documents, which in this case were in the SIAM Insurance database. 

In any case, OPLO accepted the ECA's position and withdrew the contribution by Order No 4188 of 15 May 2012. 
On 30 June 2012 it completed recovery of the amounts withdrawn when the balance for 2012 single applications 
was paid. 
64 applications were concerned, for which the total contribution granted was EUR 33 755.00, of which the 
Community share was EUR 20 063.95. 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Romania) incorrectly 
applied the obvious error 
concept, by allowing the 
replacement of ineligible 
or double claimed 
parcels, with the result 
that the paying agencies 
did not apply aid 
reductions (see example 
3.3). 

21 

Such 

as 
error, 

clerical 
inconsistency 
between 
graphical  and 
alphanumerical 
information 
contained in the 
application, 
map 
errors, etc. 

reading 

Commission reply to 3.19 

As 

regards  Denmark, 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

actions 

Finland  and  Italy, 
the 
national  authorities  have 
taken  or  are 
taking 
by 
corrective 
amending  their  internal 
instructions 
and 
procedures  and,  where 
necessary,  by  recovering 
overpaid amounts. 

As  regards  Romania,  the 
Commission 
services' 
own  audit  found  that  the 
for 
national  guidelines 
the 
of 
determination 
obvious  errors  were  not 
always  applied  correctly 
by  the  regional  paying 
offices 

In the case of Romania 
the incorrect application 
of the obvious error 
concept was systematic. 
Parcels affected by over-

Example 
3.3. 

Romania:  

APIA 
 According  to  EC  working  documents  (Working  Document  No.  2011/2009)  “...  decisions  on  whether  or  not  to 
apply the concept of “obvious error” depend on the circumstances of each case and the competent authority must 
be satisfied by the obvious nature of that error. The concept of obvious error can not be applied systematically; it is 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

declarations or double 
declarations are replaced 
in a significant number of 
cases by other parcels in 
different locations and of 
a different size or shape. 
Such replacements cannot 
be considered as a 
correction of obvious 
errors22. 

22  
The Court had 
already observed in its 
2008 Annual Report 
(paragraph 5.38) that in 
Romania 5 500 farmers 
had benefited from a total 
of 2,2 million euro in EU 
SAPS aid as a result of 
the incorrect application 
of the obvious error 
concept. 

necessary to analyze each case.  
Secondly,  considering  the  complexity  of  the  procedures  related  to  the  submission  and  processing  of  aid 
applications, and especially the different procedures applied in the Member States, this document can not classify 
each type of potential error. 
Thirdly, Regulation (EC) No. 1122/2009 provides a series of procedural rights for farmers, and a special mention 
is made in Article 73 and Article 74, which state that in some cases no penalty shall apply.” 
The management and control procedure for area payment applications provides the definition of obvious error as 
follows: 
“In establishing obvious errors after re-identifying a parcel in the physical block general criteria will be taken into 
consideration,  which  must  be  met  cumulatively:  the  lack  of  points  of  reference  in  the  two  physical  blocks  and 
maintenance  of  specific  elements  of  the  plot  initially  declared  (surface,  crop).  Re-identifying  a  parcel  in  another 
physical  block  can  be  considered/classified  as  obvious  error  if  the  APIA  official  finds  that  the  aforementioned 
criteria have been met, except the results of on-the-spot checks. Only if the APIA official finds that the farmer had 
insufficient elements for a correct identification of the parcel in the physical block and the circumstances indicate 
that  this  is  the  case  of  an  obvious  error,  then  the  re-identification  of  the  parcel  in  another  physical  block  can  be 
considered/classified as obvious error.” 
Starting with 2010, the use of the IPA Online application allowed the physical location of the parcels within 
physical blocks. 
The concept of obvious error of was correctly applied, in accordance with the law, EC working documents and 
internal procedures. 

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Paragraph  Observation in the 2011 

Member State reply 

Example 
3.4. 

Annual Report 

In two Member States23 
(Italy (Lombardia) and 
Spain (Galicia)), the 
Court found cases where 
“permanent pasture” 
reference parcels were 
recorded in the LPIS as 
being 100 % eligible 
despite the fact that they 
are fully or partially 
covered with dense forest 
or other ineligible 
features.The Court also 
observed that the LPIS 
was not updated with the 
results of on-the-spot 
inspections performed by 
paying agencies 
(Hungary, Italy 
(Lombardia) and Spain 
(Galicia)). 

23  The Court has 
already made this 

Spain:  

One of the measures, specifically measure No 14, implemented as part of the plan to improve the LPIS update 
focuses on establishing objective criteria for applying the eligibility coefficient to pasture. The aim of this measure 
is to establish a series of parameters that will enable automatic calculation of an eligibility coefficient for areas of 
pasture in all the Autonomous Communities, so that they can be uploaded to LPIS-GIS at a national level after 
calculation. 

In the RD on the application of direct payments for agriculture and livestock breeding, the eligibility coefficient for 
pastures has been introduced from 2013. This means that areas of pasture with characteristics preventing full use of 
these areas because of the presence of unproductive elements, steep slopes or other characteristics determined by 
the competent authority are assigned a coefficient in the Geographical Agricultural Land Information System 
(LPIS-GIS) reflecting the eligibility percentage in terms of the LPIS-GIS ‘recinto’. In this LPIS-GIS ‘recinto’ the 
maximum eligible area for the purpose of the direct aid schemes is the area of the ‘recinto’ multiplied by this 
coefficient. In the event of disagreement with the coefficient assigned, a reasoned objection can be submitted to the 
LPIS-GIS.  

Another of the measures in the plan of measures to improve updating of the LPIS-GIS is to check that the changes 
detected in the inspections are entered in the LPIS-GIS as indicated in EU law and in the coordination circulars 
drawn up for that purpose by FEGA. 

LPIS-GIS update following on-the-spot checks: As evidenced in the European Court of Auditors’ audit, in the 
Galicia Autonomous Community the LPIS-GIS is updated systematically using the results of the on-the-spot checks 
carried out in aid management. Since the 2009 marketing year this work has been based on the geographical 
information obtained by a GIS application called CONSUPAC developed specifically to carry out these checks. 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

observation for Spain in 
Annual Reports for 2008, 
paragraph 5.36, for 2009, 
paragraph 3.38, and for 
2010, paragraph 3.31, and 
for Italy in the 2009 
Annual Report, paragraph 
3.38. 

Despite this, in the 2009 and 2010 marketing years, in some cases it was not possible to update the new uses in the 
graphic display in time before the publication of the data corresponding to the following marketing years, due 
basically to two reasons: delays in completing the checks relating to completion of the new control system (the 
CONSUPAC application) and temporary halts to the editing of changes in the SIGPAC owing to the process of 
convergence with the land register. However, these problems, which had already been overcome in 2011, did not 
prevent appropriate inspection of these areas, since although the graphic changes could not be seen on Internet they 
were carried out from the start in the alphanumerical database used to manage the case files. These changes were 
notified to the farmers by various different methods, in particular using the pre-applications provided to them. 

Commission reply to 
Example 3.4 

Incorrect data in the 

LPIS 

According to the Italian 
authorities, the issue has 
been rectified as from 
2011. The Commission is 
pursuing this through the 
conformity clearance 
procedure of accounts. 

The Commission is aware 
of the issues related to 

Hungary:  

The case should be regarded as isolated; the error identified has been corrected. At a systemic level, LPIS data have 
been updated continuously based on the findings of on-the-spot checks carried out in previous years, thus no 
systematic measure was necessary. 

Italy:  

As regards the updating of the LPIS with the results of on-the-spot checks, the AGEA started to do this with the 
2011 on-the-spot inspections;it updated the reference parcels in real time directly on OPLO’s LPIS-GIS via photo 
interpretation per block of parcels and subsequent matching up with the reference parcel. The problem has therefore 
been resolved. 
As to the permanent pasture parcels, wrongly registered in the LPIS as eligible, when system is updated under the 
2012 ‘refresh’, the parcels/areas identified as ineligible by the inspectors in the years prior to 2011 will be checked 
for any incorrect payments to be recovered. 

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Paragraph  Observation in the 2011 

Member State reply 

This procedure can also be used for the rough pastures, for which photo interpretation more in line with the ECA's 
comments is planned. 

Annual Report 

the eligibility of pasture 
areas in Spain. The 
Spanish authorities were 
requested to act on this 
matter and presented the 
LPIS Improvement Plan 
in November 2010 
including, notably, 
measures to implement 
the application of an 
eligibility coefficient to 
pasture parcels and to 
ensure systematic update 
of LPIS with the results of 
on the spot checks. The 
Commission will continue 
to monitor the 
implementation of this 
plan by the national 
authorities. 

The Commission has also 
found some cases in 
Hungary where LPIS was 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

3.21. 

Annual Report 

not updated with the 
results of the on the spot 
checks and has requested 
the Hungarian 
authorities in writing to 
take action in this 
respect. 

For SPS aid to be 
granted, every 
entitlement held by the 
farmer needs to be 
declared together with 
one hectare of eligible 
land. The Court has 
observed that this 
principle is not respected 
in certain circumstances 
in Austria (see example 
3.5). 

Commission’s reply to 

3.21 

The Commission has so 

Austria:  

The conformity clearance procedure is still ongoing. 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

far imposed 0,214 million 
euro in financial 
corrections on Austria 
concerning entitlements 
for alpine pastures in 
claim years 2005, 2006 
and 2007 in the context of 
the conformity clearance 
procedure. 

See also joint reply to 
paragraphs 3.14 and 
3.15. 

In Austria, when an 
applicant claiming Alpine 
pasture areas does not 
have enough hectares to 
activate all entitlements 
the national authorities, 
contrary to EU 
legislation, reduce the 
number of applicant’s 
entitlements (to match it 
with the number of 

Example 
3.5. 

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Paragraph  Observation in the 2011 

Member State reply 

3.22. 

Annual Report 

hectares) and increase 
their values 
proportionately24 

The Court has 

24 
raised this issue already 
in its 2006 Annual Report 
(paragraph 5.23). 

All payment entitlements 
should be recorded in the 
entitlement database the 
total value of which must 
not exceed a ceiling laid 
down in EU legislation. 
In two Member States the 
Court found inaccurate 
information in the 
entitlements databases 
due to the incorrect 
treatment of unused 
entitlements25 (Denmark) 
and to differences 
between regional and 
central databases 

Denmark:  

The work on analysing the causes and scale of the problem is on-going. Payment rights that have not been 
exercised two years in succession will subsequently be revoked and improperly paid support reclaimed. 

Spain:  

Concerning the European Court of Auditors’ queries, the 2011 Annual Report (which includes, inter alia, the final 
conclusions of the audit of the IACS-SPS systems carried out by the Court) emphasises, with regard to the Single 
Payment Scheme in points 1.2 and 2.2. of Annex II, the differences detected in the databases during the visit to the 
Galicia paying agency (PF 4805). 

In FEGA’s report replying to the preliminary findings of the Court of Auditors (on 6 June 2012 and 3 September 
2012),  it  provided  reasons  for  and clarification  of  the  origin  of  the  discrepancies  detected  in  the  data  sent  to  the 
Court by FEGA and FOGGA. These discrepancies were owing to the different versions provided by the two bodies 
for  the  2009  bound  duties  (versions  2  and  3).  FEGA  supplied  the  version  of  the  2009  duties  that  FOGGA  had 
initially supplied (V2). We then compared the two sets of statistics.  

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

(Spain26). 

25 

two 

EU 
legislation 
provides 
that 
entitlements not 
activated 
during 
consecutive 
years 
back 
national 
reserve, 
see 
Article  42  of 
Regulation 
(EC) 
No 73/2009. 

revert 
the 

to 

26  This issue has 
already been reported by 
the Court in its 2008 
Annual Report 
(paragraph 5.37) 

Commission reply to 3.22 

As regards Denmark, the 

This comparison revealed slight differences between the data supplied by each body for bound duties both in 2009 
and 2010. However, as was attempted to explain and demonstrate in these reports and subsequently in the Court of 
Auditors’ visit to FEGA on 29 October, these discrepancies did not really correspond to different data but rather 
each  body,  using  the  same  data,  employed  a  different  accounting  system  in  terms  of  working  and  organisational 
methods.  This  had  no  impact  or  effect  on  the  related  payments.  However,  an  error  was  admitted  by  the  Galicia 
Autonomous Community when drawing up the 2010 statistics submitted to the Court of Auditors, since it included 
in the calculation 42 codes more than those actually assigned and notified by FEGA for correct payment. Therefore, 
once  again,  this  discrepancy  did  not  have  any  impact  on  the  payments  or  cross-checks  made,  since  the  error  in 
question was an inconsistency in accounting when drawing up the summary table submitted to the Court. 

This  body  wishes  to  state  and  confirm  that  the  consistency  and  uniformity  of  the  system  for  identifying  and 
recording single payment duties in Spain is guaranteed, which is why no measures were adopted in relation to this 
comment by the Court of Auditors. As the coordinating body, FEGA is responsible for maintaining the National 
Databases  created  for  identifying,  recording,  maintaining  and  managing  single  payment  duties  and  ensuring  that 
they  operate  properly.  As  we  attempted  to  explain  during  FEGA’s  visit  on  29  October,  the  main  feature  of  the 
National  Databases  (BDA,  GDR  and  BDD)  is  the  constant  flow  of  information  between  these  databases  and  the 
Autonomous  Communities.  This  means  that  the  databases  are  fed  with  information  from  the  Autonomous 
Communities,  as  Paying  and  Management  Agencies,  while  FEGA  makes  all  the  information  available  to  the 
Autonomous  Communities  once  it  has  been  validated,  the  necessary  cross-checks  performed  (both  between 
databases  and  between  the  information  sent  by  the  various  Autonomous  Communities)  and  all  the  processes 
enabling the duties corresponding to a marketing year to be calculated and assigned have been carried out.  In this 
way, our databases are constantly updated, either through the different versions generated throughout the marketing 
year,  which  incrementally  incorporate  the  processes  corresponding  to  the  year  (v0-  advance,  v1-  decoupling  of 
sectors, v2- allocation of national reserve...) or through the RI application, through which the information sent in a 

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Paragraph  Observation in the 2011 

Member State reply 

3.23. 

Annual Report 

Commission has found 
similar issues and Danish 
authorities have agreed 
to take appropriate 
corrective measures. The 
Commission will follow 
this up in the context of 
the conformity clearance 
procedure. 

The quality of the on-the-
spot measurements is of 
key importance for the 
correct determination of 
aid amounts. The Court 
has re-performed a 
number of measurements 
carried out by the paying 
agencies. In three 
Member States the 
Court’s measurements 
differed from the results 
reported by the paying 
agencies (in Denmark for 

given year can be corrected and updated for one or more specific beneficiaries.  

To conclude, we can confirm that this is a single Database which is uniform for the whole of Spain. It is a dynamic 
database due to the constant flow of information. The discrepancies found by the Court are therefore due solely to 
the different methods use by the two bodies (Autonomous Community and FEGA) for accounting and drawing up 
statistics based on the same data. 

Denmark:  

It should be pointed out that quality assurance and improvements in quality are performed continuously.   

Spain:  

The system for measuring parcels in the Autonomous Communities of Galicia is in accordance with the conditions 
laid  down  in  EU  law  and  in  the  Commission  documents  As  mentioned  in  point  3.4,  in  Galicia  a  specific  GIS 
application has been developed called CONSUPAC, with undeniable advantages with respect to any other system 
possible for Galicia. These include: 

• 

It is possible to carry out inspections with computer tablets on the spot. The inspector can at all times clearly 
see  his  position  on  the  digital  ortho-photos  and  the  LPIS  division  into  parcels.  In  this  way  the  inspector 
travels  round  the  perimeter  of  the  parcels  and  verifies  whether  it  is  necessary  to  make  discounts  or 
differentiate  uses.  This  benefit  is  fundamental  in  a  region  of  mini-holdings  such  as  Galicia.  Since  it  is  so 
thickly wooded, this often distorts the measurements obtained solely with GPS. 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

five out of 18, in both 
Spain (Galicia) and 
Finland for four out of 
21 measurements). 

•  The  application  makes  it  possible  to  consult  plentiful  information  on  declarations,  LPIS,  etc,  in  a  very 

operational form. 

• 

It has numerous checks of the consistency of the information and alerts which largely avoid errors. 

• 

It  provides  total  consistency  between  the  graphic  and  alphanumerical  information  obtained  on  the  spot, 
enables the photos taken on the spot to be clearly linked to the 'recintos’, optimises subsequent use of the 
information, etc. 

However,  the  checks  can  only  be  carried  out  properly  if  the  rules  are  applied  correctly  by  each  inspector.  The 
computerised system itself requires all the ‘lots’ of field work to be supervised before the meeting with the farmer. 
This guarantees an appropriate general quality level. 

Four of the five errors mentioned by the Court of Auditors relate to the same inspection file. In the other case, the 
error committed in measuring was to class as eligible certain vegetation masses located on the edge of extensive 
meadow ‘recintos’, in a steeply sloping area beside a river. 

The other four measurements, corresponding to parcels very close together and included in a single report, showed 
that the inspector did not comply with the rules. 

(cid:131) 

In two cases, unproductive land that could be seen in the LPIS ortho-photo in the computer tablet was not 
discounted. 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

(cid:131)  The inspector found that the applicant had erroneously declared a reference next to his own (which could be 
considered to be a ‘manifest error’) but did not correct the declaration because he wrongly considered that it 
was not necessary, since the error did not affect the payment. 

(cid:131)  The  last  parcel  was  a  wooded  area  next  to  the  main  meadow  in  the  holding,  with  trees  growing 
spontaneously  (i.e.  not  planted).    Clear  proof  was  found  (numerous  animal  droppings)  that  the  livestock 
habitually uses this area at the same time as the adjacent meadow as an area for resting protected by trees. 
Although  there  were  almost  no  signs  of  grazing  (this  may  have  been  due  to  a  persistent  drought  lasting 
many months, which is not usual in Galicia), clearly there was evident and highly intense livestock activity 
in the wooded area. The inspector therefore classed it as eligible, bearing in mind the definition of ‘eligible 
hectare’ laid down in Article 34(2) of Council Regulation 73/2009. 

In  the  training  courses  for  inspectors  held  each  year  in  Galicia,  participants  are  continually  reminded  of  the 
procedures  for  carrying  out  inspections  correctly  and  the  need  to  conduct  monitoring  as  effectively  as  possible 
before drawing up the reports. 

Finland:  
The Finnish Agency for Rural Affairs makes reference to the reply in Annex II, Section 3.1.2. and takes the view 
that the areas must not be determined in the manner suggested by the Court of Auditors. The Agency for Rural 
Affairs is of the opinion that the method of measurement suggested by the Court of Auditors is not compliant with 
Commission Regulation (EC) No 1122/2009. The calculations performed by the Agency for Rural Affairs indicate 
that the measurement results of two parcels were outside the duplicate deviation. However, the Agency for Rural 
Affairs is of the opinion that this will not result in a risk to the fund, because the audits performed by the Court of 
Auditors have found that the subject parcels have more eligible area than what was measured in the control (or 

76

 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

declared by the farmer in the aid application). 

3.24. 

The Court examined the 
accounting records of the 
paying agencies audited 
to establish if the 
amounts to be recovered 
are properly accounted 
for and if these amounts 
are correctly reported to 
the Commission. In 
Denmark the Court could 
not reconcile the amounts 
reported with underlying 
records. 

Commission reply to 3.24 

The Commission shares 
the Court's assessment 
that four out of the six 
systems audited were 

Denmark:  

The Court of Auditors’ criticism of the debtor tables is issued with reference in part to the historic problems that the 
Danish AgriFish Agency has experienced with producing error-free debtor reports for the Commission and also the 
fact that the provisional tables extracted immediately before the visit could have errors as they had not yet been 
checked off. These tables, comprising more than 9 000 claim lines and associated historic data, are produced 
mechanically, after which the Agency checks them off properly and corrects data in the table, where errors are 
found in the extract. Adjustments are made only for a few per cent of the claim lines, and the Agency has thus 
achieved a level where further programming is unaffordable from a cost benefit perspective. Only a few more 
minor adjustments are currently outstanding. It has been relatively expensive to devise a mechanical solution with 
this clarification.  

In addition, the Court of Auditors’ criticism attests to the complexity of these debtor tables. The Court of Auditors 
has thus, for various reasons, between its first communications of audit results and until its final report, mixed 
debtor lines for a second debtor together with the Agroferm case. All the subsequent criticism in the Court of 
Auditors’ section 4.2 (under case PF 4505) concerning weaknesses in relation to enforcement procedures are thus 
groundless and should not have been covered by its final report. In other words, this arises from an error on the 
Court of Auditors’ part.  

A 

B 

C 

D 

E 

F 

G 

H 

77

 
 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Year of 
origin 

Object 
of legal 
case 

Original 
amount for 
recovery 

Corrected 
amount in 
total 

Amount 
declared a 
bad debt  

Amount 
collected 

Financial year 
for 
irrecoverabilit
y 

Amount to 
be credited 
to the EU 
budget 

2005 
2006 

2007 

N 
N 

Y 

2 264 464.10 488 379.81 
739 122.02 
0.00 
28 121 794.4
71 280 272.0
7 
3 

-
2 106 692.63 2011 
-253 338.97  2011 

0.00 

646 151.28 
485 783.05 
98 949 683.7
5 

323 075.64 
242 891.53 
98 949 683.7
5 

The Court of Auditors’ conclusions are thus based on the first two claim lines, which concern a second debtor. The 
claim line from the same extract concerning the Agroferm case is included above as the third line, with the Court of 
Auditors’ criticism of incorrect depreciation clearly being groundless. 

The above comments on point 3.24 in the Court of Auditors’ annual report is otherwise repeated under the 
comments on sections 4.1 and 4.2 under case 4505 (see case conditions No 10 and No 11 in ANNEX II). 

Annual Report 

effective and two 
partially effective (see 
Annex 3.2). The 
Commission also 
considers that the debts 
management and 
recovery systems have 
improved in the last 
years, not least due to 
the introduction in 2006 
of the so-called 50/50 
rule, which gives a 
strong incentive to 
Member States to 
recover undue payments 
as effectively and as 
quickly as possible. This 
is the reason why the 
Commission has 
proposed a ‘100 % rule’ 
for the 2014-2020 period 
(i.e. 100 % of 
unrecovered amounts 
after a 4 or 8 year delay 

78

 
 
  
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

– depending on whether 
the case is under 
administrative or 
judicial procedure – will 
be charged to the 
Member States 
concerned)1. 

In the specific case of 
Denmark, the Certifying 
body also identified some 
reconciliation issues with 
regard to recovered 
amounts or between the 
reporting to the 
Commission through the 
Annex III tables and the 
paying agency's debtors' 
ledger. The Commission 
will review the 
compliance with the 
accreditation criteria and 
the infrastructure and 
control systems put in 

79

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

place. 

Member State reply 

3.28. 

1  Article 56(2) of 
SEC(2011) 1153. 

For 2011 the Commission 
reports that for EAGF all 
81 statements of 
assurance delivered by 
heads of paying agencies 
were unqualified and that 
all but one (Spain 
(Cantabria)) opinions 
given by the respective 
certification bodies were 
also unqualified27. The 
certification bodies 
perform their audits on 
the basis of Commission 
guidelines under a 
“standard” or, on a 
voluntary basis, 
“reinforcement of 
assurance” procedure 

Spain:  

It was found that the Cantabria Paying Agency did not include a reservation in the 2011 Declaration of Assurance, 
and that the Certifying Agency that audited the accounts and the Declaration of Assurance did not make a 
reservation or state that any reservation should have been made in any of the EAGF and EAFRD funds audited. 

Romania:  

AA 
The Certification Body (CB) has issued audit reports for EAGF and EAFRD on 30.5.2012, after the deadline for 
reporting to the European Commission (1 February 2012) as the paying agencies have prepared and made available 
to the auditors the documents for annual accounts after the agreed deadlines, some of the documents being 
transmitted to the CB later than 1 February 2012. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

3.33. 

Annual Report 

involving additional 
checks. 

27  No certification body 
reports have been 
received for the two 
Romanian paying 
agencies 

Furthermore, several 
certification body reports 
indicate that the 
Commission requested 
further clarifications31 by 
the paying agencies with 
regard to the inspection 
statistics initially 
submitted. Potential 
amendments to the 
inspection statistics 
resulting from these 
requests are not analysed 
in the context of 

Germany:  

Protein crop premiums 
Among the applicants for protein crop premiums (PCP) are a total of 26 farms making claims for areas of less than 
0.3 ha.  No financial assistance is being granted to these applicants, because of failure to meet the minimum area 
requirement.  No area discrepancies were found in these 26 applications during either the administrative or the on-
the-spot controls.  The area for which no payment was made was not included in the reduced area statistics. The 
amount which was not paid because the claimed area was too small is, however, included in the statistics as a 
reduction. 
In 2010, 24 applicants who were not subject to on-the-spot controls, with a PCP area of 4.79 ha, did not achieve 
the minimum area required for support. The unpaid assistance in question amounted to € 266.18 (4.79*55.57€). 
When the 4.79 ha are added to the reduced areas of 10.90 ha, already included in the statistics under D1, the result 
is a total reduced area of 15.69 ha. 
By dividing the €871.90 reduction included in  the statistics by the reduced area of 15.69 ha, the result obtained is 
the correct payment amount for protein plant aid, i.e. €55.57/ha. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

certification body audits. 

31  
The certification 
body report explains that 
the control statistics for 
Germany (Bayern) had 
been readjusted six times 
in response to 
clarification requests by 
the Commission, the last 
definite version was 
received on 7 November 
2011. 

Member State reply 

The reduced area referred to above was incorporated into the statistics under D.1.3. 
Two farms were also audited in respect of PCP within the framework of overall audits of the undertakings. The 
reduced areas are included in the statistics under D.2.2 and D.3.2. 

Value per ha of the farms selected for on-the-spot controls compared with the farms with over-declarations 
The approach taken by the Commission in this area to compare and calculate the statistics is, in our view, not quite 
correct.   
The Commission calculated average amounts per ha on the basis of aggregate values and then compared these. 
The aggregate values, however, give a different result from the comparison of the individual values for each farm. 
Since the statistics only show total values, a comparison is not appropriate. 
The problem of comparing total values can be seen clearly from the data of three randomly selected farms. 

A 
Farm 

I 
II 
III 
Total 

B 
Total 
area 
ha 

C 
Total 
values 
€ 

32,17
4,06
19,52
55,75

13.586,36 
794,91 
5.574,33 
19.955,60 

D 
€/ha  
Application 
data 
(C/A) 

422,33
195,79
285,57
357,95

E 
Over-
declared 
areas ha 

F 
Reductio
n 
€ 

0,69
1,15
0,21
2,05

291,41
225,16
59,97
576,54

G 
€/ha  
Reducti
on 
(F/E) 
422,33 
195,79 
285,57 
281,24 

High Error Rate 
The high non-compliance rate in respect of land area and the major financial impact this has on the protein crop 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

premium stem from a relatively small number of farms (6 farms with area discrepancies of more than 1.0 ha) 
whose PCP claim area is, however, relatively large, and for which the claim for part or all of the land was rejected 
primarily owing to failure to comply with the conditions for the granting of  premiums.  This is not a matter of 
areas not found, but of a rejection of areas as a result of failure to comply with growing and harvesting conditions. 
The 6 farms in question distort the statistics, with claimed areas of 96.46 ha and a rejected area of 53.45 ha. The 
rejected area of one farm alone, totalling 37.47 ha paints a false statistical picture.   The whole claimed PCP area of 
this farm has not, in fact, been planted with clover, but, contrary to the rules, mixed with other non protein crops. 

The total area subject to on-the-spot controls comprises 1 052.50 ha with an observed divergence of 60.03 ha. 

In 2010, EUR 411 584.22 was paid in Bavaria for CC relevant wine measures. This amount belongs in cell E5 of 
Table 5 of the Bavarian statistics. 
In 2010 only holdings that had received corresponding wine payments in 2009 were selected for a CC on-the-spot 
control. 
Only one holding selected for 2010 also received payments in 2010. It received EUR 2959.98. 
Since the holding was selected on the basis of a risk analysis (Article 51(1) of Regulation (EC) No 1122/2009) for 
an on-the-spot control in the framework of cross compliance, the amount of EUR 2925.98 is to be entered in cell 
E6. 
No holding selected on a random basis (Article 51(2) of Regulation (EC) No 1122/2009) for an on-the-spot check 
also received wine sector payments. This is why the amount in cell E7 remains at EUR 0. 
In 2010, CC breaches were detected in respect of 5 holdings which received wine sector payments in 2009. None 
of these holdings also received payments in 2010. Amounts of EUR 0 should also be entered, therefore, in cells E9 
to E17.  

83

 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

3.34. 

the 

2010 

In 
Commission 
introduced on a 
voluntary 
basis32  a  new 
control 
framework 
called 
“Reinforcement 
of  assurance  on 
the  legality  and 
regularity 
of 
the transactions 
at  the  level  of 
final 
the 
beneficiaries 
through 
work 
certification 
bodies”. 
reinforcement 
exercise 
requires 
certification 
body 
perform, 
each 

re-
for 
paying 

the 
the 

The 

the 

of 

to 

Bulgaria:  

The Guidelines for the reinforcement of assurance on the legality and regularity of the transactions at the level of 
the final beneficiaries through the work of the certification bodies are applied by the Member States on a voluntary 
basis. The document has been the subject of a series of comments by the Member States and of discussions between 
the European Commission and the Paying Agencies’ Certification Bodies aimed at improving it further. Thus, as is 
made clear in point 1 of Part A ‘Audit strategy’, the Guidelines apply only to EAGF and EAFRD schemes and 
measures covered by IACS. 

Luxembourg: 

Dans son rapport dans le cadre de l’assurance renforcée, l’organisme de certification n’avait pas formulé 
d’observations particulières ! 

Romania:  

AA  
For the year 2011, the Certification Body (CB) applied the consolidation of insurance for EAGF-IACS and 
EAFRD-IACS populations. Related audit reports and certificates were issued in December 2011 and were 
submitted to the European Commission on 12.12.2011 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

of 

the 
a 

agency 
and 
each of the four 
expenditure 
populations, 
EAGF-IACS, 
EAGF-non-
IACS,  EAFRD-
and 
IACS 
EAFRD-non-
IACS, 
check 
representative 
sample 
transactions 
the 
which 
paying  agency 
has  checked  on 
the spot. 
32 For the financial year 
2011 only Luxembourg, 
Bulgaria and Romania 
opted to apply the 
reinforcement of 
assurance procedure. 

of 

85

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

3.38. 

Example 
3.6. 

in 

Court 

The 
noted 
substantial 
deficiencies 
the 
implementation 
the 
of 
reinforcement 
assurance 
of 
procedure 
in 
both  Member 
States  audited 
(Bulgaria  and 
Romania, 
see 
example 3.6) 

In Bulgaria, the 
re-performance 
of  the  on-the-
spot checks was 
outsourced  by 
the  certification 
body 
a 
service 
In 
provider. 
several cases re-
performed  by 
the  Court  the 

to 

Bulgaria:  

Bulgaria’s  Certification  Body  does  not  accept  the  findings  of  the  European  Court  of  Auditors  (ECA)  and  has 
detailed  its  reasons  in  a  letter  of  14 May 2012  to  Mr Augustyn  Kubik  and  during  the  ECA  audit  mission  of  12-
16 November 2012.  
We would point out that the audit procedures concerning the repeat on-the-spot checks include the following main 
steps:  

•  Planning the engagement; 
•  Assessing the control environment at the Paying Agency; 
•  Preparing samples for the selection of parcels; 
•  Remeasuring parcels/recounting livestock on the spot; 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

had 

the 
of 

service 
provider 
incorrectly 
assessed 
eligibility 
land. 
Furthermore, 
the  certification 
body  did  not 
observe that the 
paying  agency 
did  not  offset 
area  surpluses 
found  on  one 
parcel  against 
found 
deficits 
another 
on 
parcel, 
as 
required  by  EU 
legislation. 
Another 
shortcoming 
undetected  by 
the  certification 
body  was  that 
where  the  same 
area 
was 
claimed  by  two 

•  Analysing the results and evidence gathered;  
•  Calculating a rate of error at beneficiary level;  
•  Detailed administrative tests on the files; 
•  Recalculating the amount of eligible support before imposing penalties and reductions; 
•  Calculating penalties and reductions; 
•  Calculating and assessing the rate of error at population level; 
•  Reporting. 

The  Certification  Body  at  Bulgaria’s  Paying  Agency  did  not  outsource  all  the  on-the-spot  checks  but  just  those 
involving  the  technical  measurement  of  the  reference  parcels.  The  need  to  select  such  a  subcontractor  and  the 
procedures  for  its  selection  are  described  in  detail  in  our  audit  strategy,  which  we  presented  to  the  European 
Commission and the European Court of Auditors.  
Procedures  for  monitoring  and  controlling  the  work  of  the  subcontractor  were,  moreover,  drafted  and  applied  in 
accordance with Deloitte’s International Audit Standards and Policies.  The main elements are:  

•  designing a method and instructions for determining the eligibility of parcels and for synthesising reporting 

data; ; 

•  training the subcontractor’s staff;  
•  approving their working documents; 
•  jointly  performing  measurements  (a  team  comprising  a  member  of  the  subcontractor's  staff  and  a 

representative of the Certification Body) on over 50% of the parcels in the sample. 

As regards point 1 of the ECA's comments, we reject the approach applied by the ECA, which involved assessing 
the correctness of the review of the eligibility of parcels by an on-the-spot check a year after the on-the-spot check 
by the Certification Body and the Technical Inspectorate of the Paying Agency.  This approach means that checks 

87

 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

farmers 
(multiple-
claims) 
the 
paying  agency, 
contrary  to  EU 
legislation, 
replaced 
the 
area claimed by 
one 
the 
of 
farmers 
by 
concerned 
an 
equivalent 
unclaimed  area 
in  another  part 
of  the  reference 
parcel.  

on the admissibility of the parcels declared by the beneficiaries are effectively performed two years after the date 
on  which  the  parcels  were  declared,  which  is  a  direct  breach  of  Article 53(6)  of  Regulation  (EC)  No 1122/2009, 
which  requires  on-the-spot  checks  to  be  carried  out  in  the  calendar  year  in  which  the  beneficiary  lodged  their 
application.   

Had we taken the same approach as the European Court of Auditors, our opinion on the parcels’ eligibility in terms 
of  farming  condition  might  have  been  different,  since  it  is  undoubtedly  the  case  that  a  parcel  can  change  in  the 
course of a year.  

As for the rate of error calculated by the ECA (78%), we believe it should be based on the surface area of parcels in 
hectares rather than on the number of parcels.   

(As regards the comment on point 1, please see 1.1 of the detailed explanation given by the Certification Body to 
the ECA at the time of the audit mission of 12-16 November 2012, which is annexed to this table.) 

all 

Romania, 
paying 

In 
the 
agency 
withheld 
payments 
selected  by  the 
certification 
body 
presented 
that 
payment 

and 
to 
body 

Romania:  
AA, APIA 
As the ECA auditors also noted and recorded in the Annual Report, at the time of the audit conducted by the 
auditors of the Certification Body (CB) the parcels in question were not accepted for payment by the Agricultural 
Payments and Intervention Agency (APIA); this happened subsequently, after the results of the audit of the 
Certification Body were transmitted to the paying agency. Under these circumstances, at the time of the CB audit, it 
could not determine whether the changes made by the paying agency in parcel positioning were obvious errors or 
not. 
We reiterate that, under Art. 21 of Regulation (EC) No. 1122/2009, as subsequently amended and supplemented, 

88

 
 
 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

simulations 
based on lists of 
parcels  which 
all 
excluded 
ineligible 
parcels. 
However,  after 
the  completion 
of the audit and 
the 
validation 
of  the  payment 
simulations  by 
the  certification 
body, 
the 
paying  agency 
added 
new 
parcels  to  the 
list  by  way  of 
incorrect 
of 
application 
obvious 
the 
concept  
error 
and paid higher 
amounts 
than 
those  validated 
the 
by 
certification 
body.  As 

a 

and under EC Working Document no. 09/2011 (submitted to the auditors during the mission), “an aid application 
can be corrected at any time after its submission, in the case of obvious errors recognised by the competent 
authority. Thus, the competent authority decides whether or not the error is “obvious” and whether or not it leads to 
reductions and exclusions, as set out in Title IV of the Regulation”. The farm was subject to the on-the-spot check 
conducted by APIA and to the on-the-spot check conducted by CB and ECA audit for 2010. These checks found 
that the land is used. Moreover, for 2012, the farm was selected for the on-the-spot check. Two of the three parcels 
in question were selected and verified on-site, the inspectors confirming the location of these parcels in the physical 
blocks where they were relocated in 2010 , accepting it as an obvious error. According to EC working documents 
(Working Document No. 2011/2009) “... decisions on whether or not to apply the concept of “obvious error” 
depends on the circumstances of each case and the competent authority must be satisfied with the obvious nature of 
that error. The concept of obvious error can not be applied systematically; it is necessary to analyze each case. 
Secondly, considering the complexity of the procedures related to the submission and processing of aid 
applications, and especially the different procedures applied in the Member States, this document can not classify 
each type of potential error. Thirdly, Regulation (EC) No. 1122/2009 provides a series of procedural rights for 
farmers, and a special mention is made in Article 73 and Article 74 which state that in some cases no penalty shall 
apply.” Management and control procedure for area payment applications provides the definition of obvious error 
as follows: 

“In establishing obvious errors after re-identifying a parcel in the physical block general criteria will be taken into 
consideration,  which  must  be  met  cumulatively:  the  lack  of  points  of  reference  in  the  two  physical  blocks  and 
maintenance  of  specific  elements  of  the  plot  initially  declared  (surface,  crop).  Re-identifying  a  parcel  in  another 
physical  block  can  be  considered/classified  as  obvious  error  if  the  APIA  official  finds  that  the  aforementioned 
criteria have been met, except the results from the on-the-spot checks. Only if the APIA official finds that the farmer 
had  insufficient  elements  for  a  correct  identification  of  the  parcel  in  the  physical  block  and  the  circumstances 
indicate that this is the case of an obvious error, then the re-identification of the parcel in another physical block 

89

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

3.40. 

the 

result, 
certification 
body  issued  an 
unqualified 
opinion  on  the 
and 
legality 
regularity 
of 
payments 
despite 
weaknesses 
highlighted  by 
the Court. 

the 

AGRI’s 
AAR 
a 
in 
of 

DG 
2011 
contains 
reservation 
respect 
serious 
deficiencies 
IACS 
Bulgaria 
Portugal. 
However, 
Commission 
lifted 
previous 
reservation  for 

in 
in 
and 

the 

its 

can be considered/classified as obvious error.” 
Starting with 2010 , the use of the IPA Online application allowed the physical location of the parcels within 
physical blocks. The concept of obvious error was correctly applied in accordance with the law, EC working 
documents, and internal procedures. 

Bulgaria:  

In June 2009 a consolidated plan to improve the working of the IACS was drawn up and approved by the European 
Commission. It was to be implemented by the end of November 2011. Quarterly progress reports on the action plan 
were drawn up and sent to the European Commission. The consolidated plan’s implementation was monitored by 
Commission representatives and the final report on its implementation was sent to the Commission at the end of 
November 2011. 

Portugal:  

No comment. 

Romania:  

APIA 
IACS is a reliable, solid, detailed and transparent system for the management and control of applications submitted 

90

 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

3.41. 

IACS 
in 
expenditure 
Romania. 
In 
the  light  of  the 
observations 
referred  to 
in 
paragraph  3.19 
example 
and 
3.6  the  Court 
that 
considers 
was 
this 
premature. 

Furthermore, DG AGRI 
considers that the 
anomalies found by 
paying agencies during 
randomly selected on-the-
spot inspections reflect 
the residual error rates. 
The Court reiterates its 
criticism of this approach 
already made in its 2010 
Annual Report because: 

- 

it is based on 
inspections, the 

by farmers, which accurately reflects existing documents on file and meets the processing flow of the applications 
set out in APIA procedures and in compliance with European regulations.  
IACS system reliability is an ongoing concern for APIA. In designing the system, it has been considered that the 
work  done  during  the  processing  of  an  application  should  be  managed  by  an  automated  system  (Workflow 
Management System) based on stats. One can not move to a new stage of processing until the completion of the 
previous stage. All the operations required during processing are recorded in the file history, stored in the database 
and accessible at all times.  
During operation, when opportunities to improve workflow and audit trail they were or are highlighted, the system 
has been and will continue to be updated accordingly. 

Germany:  

The amounts listed in point 6.2 of the Annual Report of the Mecklenburg-Vorpommern (MV) Certifying Body 
include recoveries which, following retrospective area comparisons, have been incorporated into the updated results 
of the Land Parcel Identification System (LPIS). 
In Mecklenburg-Vorpommern, the field block register has been used as the reference system since 2005. This 
register was established on the basis of aerial photographs from 2002 and 2003 and is maintained, updated and 
adjusted continuously.  
If changes are detected in the area reference, these take effect as soon as they arise, not when then are detected.  
Retrospective area cross-checks are carried out to verify to what extent retroactive changes detected in area 
references affect the claimed areas for the relevant claim years. 
Retroactive changes to the reference are mainly the result of new aerial surveillance of the land surface area. In 
agreement with the State Office for Internal Administration, the aerial photographs of the Mecklenburg-
Vorpommern land surface area are updated at least every four years.   

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

quality of which the 
Commission’s own 
audits35 and the 
Court’s audits (see 
paragraph 3.23) have 
shown to be 
insufficient, in the 
case of a number of 
paying agencies; 

it relies on 
inspection statistics 
which, according to 
certification body 
reports, are affected 
by compilation 
errors (see paragraph 
3.30) and; 

it is incomplete 
because it disregards 
the residual errors in 
the administrative 
management of 
claims which the 

- 

- 

Once the photographs have been through the requisite quality control procedures and once the necessary technical 
calculations have been done, they are submitted to the LU. Photos are usually transmitted at the end of December 
of the year in which they were taken.  These up-to-date aerial photographs are incorporated by the LU into the 
LaFIS-LFK IT System, superimposing them on the existing raster images and vector data of the physical blocks. 
So-called reference tasks are then established to check the physical blocks photographed from the air. A visual 
check is then carried out using the data available to detect any changes to the vector reference data used to date 
which would render correction necessary. The date on which required corrections take effect is, in principle, 1 
January of the year of the photo flight.  If the corrections are the result of infrastructure measures, notification must 
be given of the actual withdrawal from agricultural use of the land area concerned and 1 January of the year in 
question is established as the date when the corrections take effect.  
The verification and adaptation of the reference on the basis of the aerial photos currently on file is, as a rule, fully 
completed by the STÄLU at the end of the calendar year following the photo flight (n+1). 
In accordance with Article 28 of Regulation (EC) No 1122/2009, administrative controls include cross-checks 
between the agricultural parcels as declared in the single application and the reference parcels as contained in the 
identification system for agricultural parcels to verify the eligibility for aid of the areas as such.   
This cross-check is performed in Mecklenburg-Vorpommern in the c/s profile using the reference area comparison.  
Reference area comparisons are made on the basis of the reference that is valid at that particular point in time for 
the respective application year. 
As a rule, three reference area comparisons are carried out in the current calendar year for each respective 
application year.  This ensures that, before payment is made, an adequate cross-check is carried out between the 
agricultural parcels as declared in the single application and the reference parcels as contained in the identification 
system for agricultural parcels. 
Retrospective reference area comparisons are made in order to check whether the reference changes give rise to 
newly disputed claims in respect of declared areas. As a rule, two retroactive reference area comparisons are carried 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Court’s (see 
paragraphs 3.19, 
3.21 and 3.22) and 
the Commission’s 
own audits have 
shown to be 
deficient36.  

Clearance of 

35 
accounts reports 
AA/2011/15 (Portugal), 
paragraph 3.2, 
AA/2011/09 (Finland), 
paragraph 3.2.1, 
AA/2011/05 (Germany, 
Mecklenburg-
Vorpommern), paragraph 
6.2, AA/2011/12 (Italy, 
Emilia-Romagna), 
paragraph 3.4.2, 
AA/2010/16 (Romania), 
paragraph 3.3, AA/ 
2011/17 (Slovenia), 
paragraph 3.2, 

out for the two previous claim years.  
After the reference area comparison files have been processed, IT-supported image recapture is used to verify 
which applications result in negative differences and the claims in question are automatically recalculated. 
This automated procedure ensures that all claims are checked comprehensively. 

The most up-to-date calculation of the respective claims is always used to establish the control statistics. When the 
control statistics were published, a significant proportion of the recalculations, which serve as the basis for the 
amounts reported on under point 6.2 of the Annual Report of the Mecklenburg-Vorpommern Certifying Body, had 
already been carried out. 
The control statistics for the 2010 calendar year were established on 21.11.2012, again taking full account of all 
recalculations.  Of all the applicants subject to on-the-spot checks, it turned out that only one had made an 
overclaim (of 2.83 ha) which was not included in the control statistics published in July 2011. This application was 
picked up in the risk analysis.  Retroactive discoveries have no effect on the error rate of the randomly selected 
applications. 

Finland:  

The finding is directed at the Directorate General for Agriculture and Rural Development. The Agency for Rural 
Affairs has no comment to make here. 

Portugal:  

No comment. 

Romania:  

See the response in section 3.19 

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Paragraph  Observation in the 2011 

Member State reply 

Slovenia:  

Reply from the Ministry of Agriculture and the Environment of the Republic of Slovenia: The results of the IACS 
statistics and of the quality assessment of the land identification system in 2011 show that the LPIS is adequate in 
SI. A DG AGRI audit carried out in SI in 2011 did not identify any irregularities in LPIS to support the claim that it 
is artificially designed with the aim of increasing the measurement tolerances. SI defines the reference unit as a unit 
having the same type of actual use and follows natural shapes. SI has a system in place for regularly updating LPIS 
by eliminating ineligible areas. 

Annual Report 

AA/2011/06 (Spain, 
Navarra), paragraph 3.4, 
AA/2011/07 (Spain, 
Castilla y Leon), 
paragraph 3.4. 

36 
For example, 
clearance of accounts 
reports AA/2011/01 
(Bulgaria), paragraph 3.3, 
AA/2010/15 (Portugal), 
paragraph 3.3, 
AA/2011/12 (Italy), 
paragraph 3.2, 
AA/2011/06 (Spain), 
paragraph 3.2 and 
AA/2011/13 (Lithuania), 
paragraph 3.3. 

Annex 
3.2. 

Results of examination of 
systems for agriculture: 
market and direct support 

Austria:  

See example 3.5. 

Denmark: 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

The Danish AgriFish Agency notes the Court of Auditors’ assessments in Annex 3.2 and will, in accordance with 
the answers provided under points 3.19, 3.22, 3.23 and 3.24, carry on working to rectify the matter about which 
criticism has been levelled.  

Finland: 
The replies to the findings compiled into the table are shown among the replies to individual cases in Annex II. 

Hungary:  
Community and national aid conditions are being kept up-to-date and applied continuously. 

Italy:  
See answers to individual findings 
United Kingdom:  

RPA: the review mentioned in the table is currently ongoing. 

Chapter 4 – Rural development, Environment, Fisheries and Health 

Bulgaria:  

The Bulgarian authorities regularly update the approved version of the RDP, including the relevant national 
legislation. The updates are intended both to provide new opportunities for candidates and to improve control 
mechanisms. To avoid any confusion among applicants about the conditions and requirements, the Bulgarian 
authorities also regularly conduct information campaigns aimed at explaining the opportunities and the 

95

Annex 
3.3. 

Follow-up of previous 
recommendations for 
EAGF 

4.5. 

In its 2010 Annual 
Report, the Court noted 
that rural development 
expenditure is 
particularly prone to 
error3. The main risk to 

 
 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

regularity is caused by 
the often complex rules 
and eligibility conditions. 
In addition, as some 
programmes have low 
implementation rates4, 
there is a risk, especially 
towards the end of the 
programming period, that 
ineligible expenditure is 
declared to avoid 
decommitments. 

3  

See paragraph 3.18 

of the Court's 2010 
Annual Report. 

4  

Five years after the 

start of the 2007-2013 
programming period, 
execution rates (i.e. 
payments/financial plan) 
were still very low for 
Bulgaria (29,1 %), 
Romania (34,3 %) and 

requirements that applicants have to meet. 

To prevent the declaration of ineligible costs to the Commission, the Bulgarian authorities check that the accredited 
rules applied by the Paying Agency are in strict conformity.  

The Bulgarian authorities have not set a specific starting date for action because this process is ongoing and began 
with preparations for the application of the programme for the current period and, with a view to the effective, 
efficient and proper management of these actions, will continue until this programme’s monitoring ends. 

Italy:  

The costs borne in 2012 entailed a rise in the implementation rate for the Italian State. On 15 October 2012 it was 
44.4%.  Moreover,  the  Italian  State  has  implemented  the  ‘refresh’  procedure  for  agricultural  areas,  which  makes 
possible: 

1.  updated aerial imaging for 1/3 of Italian territory per year, according to a pre-established ‘complete regions’ 

plan; the digital orthophotos are in colour and very high resolution (50 cm on the ground); 

2.  photo interpretation of land use with the digital photographs makes for ‘full coverage’ of the areas, since it 

is carried out for both agricultural and non-agricultural areas; 

3.  the  areas  are  photo  interpreted  directly  and  continuously  on  the  orthophotos  by  subdividing  the  land  into 
homogeneous  plots  of  land  delimited  by  natural  or  artificial  physical  borders  (roads,  water,  physical 
boundaries,  ditches,  mountaintops,  etc.);  this  “objective  identification  of  land  use”  is  independent  of  the 
information provided by farmers about their management or ownership of the pieces of land. 

This is a precautionary system, already operational, for keeping down the error rate in area measurement for Rural 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Italy (36,2 %) (based on 
data from DG AGRI as at 
31.12.2011). 

Development purposes. 

Romania:  

APDRP 

1. Termination of funding agreements signed in 2008, 2009, 2010 for which there was no request for payment 

(non-bankable agreement termination). The decommitted amounts were reallocated. 

2. Shortening the deadline for the verification of the payment application. 
3. Limiting the number of addenda seeking extension of the implementation deadline.       
4. Issue of Government Decision No. 1036 of 24 October 2012 on over-contracting so available funds would be 

allocated immediately. 

5. Period analysis of procurement and payments stages for each agreement. 

              Please note that the actions taken are permanent. 

4.9. 

Annex 1.1, Part 2, of 
Chapter 1 describes the 
Court's overall audit 
approach and 
methodology. For the 
audit of rural 
development, 
environment, fisheries 
and health, the following 
specific issues should be 

Austria 

See Annex II for measures. 

Denmark:  

The Danish AgriFish Agency notes the Court of Auditors’ comments under point 4.9 and addresses more 
specifically the criticism in points 4.24, 4.25, 4.26, 4.28, 4.30, 4.31 and 4.38 below. 

Spain:  

This reservation was corrected when Royal Decree 401/2012 of 17 February 2012 was published. This Royal 
Decree implemented the basic organic structure of the Ministry of Agriculture, Food and the Environment, which 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Member State reply 

designates the Spanish Agricultural Guarantee Fund (FEGA) as the Certifying Authority and the Directorate-
General of Fishing Management as the Managing Authority.  All this was sent to the Court at the time. 

Finland:  

This section describes the actions of the Court of Auditors, which, on the basis of the description, have been carried 
out. The Member State has no comments to make in this respect. The inspection results reported as a result of the 
Court of Auditors’ work are discussed in later sections of this document. 

Hungary:  

The referenced part did not require Hungary to take any action. 

Italy:  

No comments on the audit methodology. 

Paragraph  Observation in the 2011 

Annual Report 

noted: 

- 

the audit involved 
the examination of a 
sample of 
178 interim and final 
payments, 
comprising 
160 payments for 
rural development 
and 18 concerning 
environment and 
climate action, 
maritime affairs and 
fisheries, and health 
and consumer 
protection; 

-  with respect to cross 
compliance, the 
Court focused its 
testing on 
compliance with 
GAEC (good 
agricultural and 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

environmental 
condition) 
obligations and 
selected statutory 
management 
requirements 
(SMRs)8 for which 
evidence could be 
obtained and a 
conclusion reached 
at the time of the 
audit visit; 

reductions and 
exclusions (to be 
applied by Member 
States in cases where 
beneficiaries of EU 
aid over-claim the 
actual area, number 
of animals or eligible 
expenditure9) are not 
included in the 
Court's error rate 

- 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

- 

- 

Annual Report 

calculation10; 

the assessment of 
systems for rural 
development 
covered one paying 
agency in each of six 
Member States: 
Denmark, Spain 
(Galicia), Italy 
(Lombardia), 
Hungary, Austria 
and Finland. For 
Maritime affairs and 
fisheries the Court 
tested the internal 
control system of 
DG MARE; 

the review of the 
Commission's 
management 
representations 
covered the annual 
activity reports of 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

- 

Annual Report 

DG AGRI 
(concerning rural 
development), 
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 
DG AGRI's 
clearance of 
accounts audit work 
and the EAFRD 
certification bodies' 
certificates and 
reports related to 
15 paying agencies. 

8 
All 
requirements 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

for 
SMRs 6-8 
(concerning  the 
identification 
and registration 
of  animals)  and 
obvious 
non-
compliance 
with 
(nitrates 
Directive)  and 
(animal 
18 
welfare). 

SMRs 4 

9

Articles 1

of 

6,  17  and  30  of 
Commission 
Regulation 
(EU) 
No 65/2011 
27 January 201
1  laying  down 
rules 
detailed 
for 
the 
implementation 
Council 
of 
Regulation 
(EC) 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

No 1698/2005, 
as  regards  the 
implementation 
control 
of 
procedures  as 
well  as  cross-
compliance 
in 
respect  of  rural 
development 
support 
measures 
(OJ L 25, 
28.1.2011, p. 8). 

10 
Except  in 
cases 
where 
Member  States 
already 
had 
the 
found 
irregularity 
without 
applying 
due 
reductions/excl
usions. 

the 

4.20 

Annex 4.2 contains a 
summary of the Court's 

Austria:  

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

examination of Member 
States' supervisory and 
control systems. 
Concerning the six rural 
development supervisory 
and control systems 
audited, the Court found 
that one of the control 
systems implemented 
was not effective 
(Denmark), four were 
partially effective (Spain 
(Galicia), Italy 
(Lombardia), Hungary 
and Finland) and one was 
effective (Austria) in 
ensuring the regularity of 
payments. 

The Court identified 
weaknesses in the 
implementation of 
administrative checks 
related to eligibility 

4.24 

No. Austria is mentioned under 4.20, but its system is described there as "effective". 

Denmark:  

The Danish AgriFish Agency notes the Court of Auditors’ comments under point 4.20 and addresses more 
specifically the criticism in points 4.24, 4.25, 4.26, 4.28, 4.30, 4.31 and 4.38 below. 

Spain:  

See details in this document. 

Finland:  

This section is a summary of the more detailed inspection findings shown below. The inspection findings are 
discussed in the sections below and in Annex II. 

Hungary:  

Please provide more details on the above finding. 

Italy:  

No comments on the overall assessment. 

Austria:  

See Annex II for measures. 

Denmark:  

Steps have been taken on one project. Follow-up of the other projects is on-going.  

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

conditions and 
commitments in five of 
the six Member States 
audited (Denmark, Italy 
(Lombardia), Hungary, 
Austria and Finland). An 
illustration of this is 
given in example 4.5. In 
one Member State 
(Denmark), the Court 
examined a sample of 
five randomly selected 
projects for non-area-
related measures. The 
audit identified ineligible 
expenditure in four of the 
projects, which had not 
been detected by the 
paying agency. 

In addition, the Court 
found that three of the six 
Member States audited 
(Denmark, Italy 

4.25 

Administrative audits based on records have been increased to 5% of the cases for which payment is sought. 100% 
audits based on records are conducted on selected schemes. The Payment Body is devising a development plan 
aimed in part at cutting the number of future non-approvals in the project support area. The Agency is examining 
and improving on-going instructions and guidance and ensuring uniformly documented case handling with clear 
audit trails.  

Finland:  

See the reply in Annex II, in the section entitled “11.P.T05.NR2.1504-01 /No check against irregular double 
financing”. 

Hungary:  

Please provide more details on the above finding. 

Italy:  

See answer to Example 4.5 

Denmark:  

A standard memorandum was drawn up in January 2012.  The guidelines for the use of penalties have been 
included in the case handling instructions 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

(Lombardia) and Finland) 
did not correctly apply 
the reductions as 
stipulated in the 
legislation. 

Finland:  

See the reply in Annex II, in the section entitled “11.SYS.TO5.NR2.1504 / No recovery for area decrease of more 
than 20 % or 5 ha”. 

Italy:  

The implementing provisions for the measure, the Paying Agency's manual of procedures and controls and the 
checklist for undertakings for Measure 121 provide that failure to submit the application for adjustment is a breach 
of an essential undertaking and therefore results in total forfeiture (100% reduction) of the operation being 
financed. But despite having received precise instructions from the Regional Paying Agency, the agency carrying 
out the controls made a mistake in applying a reduction of 3% rather than totally rejecting the aid application. 
The Paying Agency itself took a decision to recover the aid of EUR 86 313.32 (44% or which was cofinanced by 
the EAFRD) (Order No 3801 of 3 May 2012). 
In order to prevent errors by the bodies to which the Regional Paying Agency (RPA) delegates control work, work 
procedures have been amended to stipulate fortnightly meetings to discuss the control procedures to be applied, 
including the system of reductions provided for in the manuals and implementing provisions for the measure (20 
meetings have now been held). 

4.26 

One of the key 
administrative checks14 of 
measures for improving 
the competitiveness of 
the agricultural sector, 
such as modernisation of 
farms, and improvement 

Denmark:  

In accordance with Article 24(2)(d) of the Control Regulation (65/2011), the Payment Body has chosen to adopt 
comparison of various tenders as a general evaluation system. In specific terms, this means that the EU provision is 
based on a requirement for, as a rule, two tenders to be submitted together with applications for subsidy.  
The Payment Body has nevertheless at the same time laid down de minimis thresholds for costs for movable 
property and for costs for building and construction tasks and for services.  
The rules are set out in guidance and instructions. The Agency assesses costs under the de minimis thresholds on 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

and development of rural 
infrastructure, is to assess 
whether the costs claimed 
are reasonable. Member 
States are therefore 
required to implement 
suitable systems for 
evaluating the amounts 
claimed by beneficiaries. 
The Court found that this 
regulatory requirement 
was not effectively 
implemented by four of 
the six national 
authorities audited 
(Denmark, Spain 
(Galicia), Italy 
(Lombardia) and 
Hungary). This situation 
is confirmed by the 
sample of transactions, 
where errors were 
reported for 21 out of the 
70 transactions (30 %) 

the basis of reference costs such as list prices, etc. 

Spain:  

On 11 May 2012 the new regulatory framework for the aid was published. These include the comments by the 
Court of Auditors concerning the obligation to ask aid applicants for three estimates for amounts of under €12 000. 
Measures were taken from 11 November 2011 in relation to the other comments made. 

Hungary:  

The Managing Authority’s Communication No 86/2012 on the catalogue of machines for 2012 was published on 20 
July 2012. 
In the course of updating the catalogue of machines, particular effort is made to ensure that the reference prices 
contained therein reflect the actual market prices 

Italy:  

We  agree  with  the  Commission’s  answer.  As  we  noted  already  in  our  responses  to  the  ECA’s  comments,  the 
Regional Paying Agency disagrees with the ECA auditors’ assessments of the procedures relating to the eligibility 
of general costs for the following reasons: 

•  the  maximum  percentages  of  general  costs  set  in  the  invitations  to  tender  are  in  line  with  the  Community 
rules  requiring  that  the  costs  be  reasonable,  because  they  were  set  taking  account  of  the  impact  of  the 
operations that form part of the costs themselves, on the basis of their market cost; 

•  three  quotations  are  not  needed  since  the  bulk  of  the  costs  relate  to  professional  services  which  entail 
fiduciary relations and fall within the discretionary power of the agricultural holdings; moreover they can be 
substantiated within the limits set by the relevant provisions; 

•  the  same  reporting  rules  and  procedures  apply  to  general  costs  as  to  other  costs,  i.e.  the  submission  of  tax 

documents, which guarantees the correctness of the transactions; 

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Paragraph  Observation in the 2011 

Member State reply 

final verification of the reasonableness of the general costs by the bodies concerned is carried out on the documents 
which prove the eligibility of the costs and compliance with the limits set by the relevant provisions, since the 
reasonableness of the costs is implicit in the maximum percentages set. 

Annual Report 

examined. A similar 
finding was already 
reported last year but for 
other paying agencies 
(see paragraph 3.35 of the 
Court's 2010 Annual 
Report). 

14 

Referred 

to  in  Article  24 
of  Regulation 
(EU) 
No 
65/2011. 

Commission 
4.26. 

reply 

to 

The  Commission  shares 
that 
view 
the 
administrative  checks  of 
the 
reasonableness  of 
for 
costs  are  essential 
ensuring the effectiveness 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

of 
the  whole  control 
system.  These  essential 
checks  are  systematically 
during 
examined 
audit 
Commission 
missions.  However, 
the 
Commission notes that in 
the  case  of  Italy 
the 
Court’s  finding  concerns 
amounts  (general  costs) 
which are usually paid on 
a 
rate  basis  of 
maximum  10  %  or  even 
the 
fixed  or  outside 
influence 
the 
beneficiary  (taxes,  cost 
for 
system 
certification, etc). 

quality 

flat 

of 

4.28 

The Court found in five 
of the six Member States 
audited (Denmark, Spain 
(Galicia), Italy 
(Lombardia), Hungary 

Denmark:  

For cross-compliance, the Danish AgriFish Agency cannot find in the Court of Auditors’ comments or provisional 
reports any indications that, during the visit in Denmark, the Court found that the verification did not cover all 
aspects that were verifiable at the time of verification. Under-implementation concerning cross-compliance is dealt 
with in 4.30 (NO 13) 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

and Finland) that the 
checks implemented did 
not cover all the 
commitments and 
obligations of a 
beneficiary which can be 
checked at the time of the 
visit, as required by the 
legislation. 

Spain:  

In 2012 an on-the-spot count was taken of bovine, ovine, caprine and equine species in the LPIS aid applications, 
measures 211, 212, 214 and 215. 

Finland:  

See the reply in Annex II, in the section entitled “11.SYS.TO5.NR2.1504 / On-the-spot checks do not cover all the 
commitments and obligations of the beneficiary”. 

Hungary:  

:  We  dispute  the  Commission’s  position  that  the  check  performed  by  the  paying  agency  does  not  comply  with 
Article 28(2) of Regulation (EC) No 1975/2006.  

The provisions of the Regulation can also be interpreted to mean that all obligations of a beneficiary related to a 
single project or application for support must be checked at the same time.  

The wording of Article 61 of the draft horizontal regulation on the CAP currently in negotiation, to be introduced in 
2014, is similar to Article 28(2) of Regulation (EC) No 1975/2006. At the meeting of the Council Working Group 
on  13  February  2012,  the  Hungarian  authorities  raised  their  concern  about  the  ambiguity  of  the  wording  of  that 
provision. In response to the Hungarian suggestion, the Commission promised to clarify and improve the wording.  

We  stand  by  our  view  expressed  during  the  Commission’s  audit  that  simultaneous  systematic  checks  of  all 
obligations  of  a  beneficiary  relating  to  all  their  projects  and  applications  for  support  are  neither  effective  nor 
efficient: 

−  A beneficiary may be eligible for support or receive support on several different grounds. These forms of 
support are unrelated to each other in time, space, in terms of conditions, etc. The assessment of individual 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

requirements  demands  the  involvement  of  different  experts,  and  no  auditor  can  be  expected  to  have 
expertise  in  all  fields.  Investment  projects  may  be  at  different  stages  and  therefore  cannot  necessarily  be 
checked at the same time. Furthermore, Article 27(1) of Regulation (EC) No 1975/2006 states explicitly that 
on-the-spot checks must be carried out before the final payment is made for the project. 

−  A mandatory control rate must be applied when selecting on-the-spot checks using risk analysis. Yet it is 
difficult to comply with the selection rate and maintain its audit trail on the basis of the recommendations of 
the Commission’s audit service. Including the amounts paid out under other entitlements in the rate of on-
the-spot checks would radically reduce the number of beneficiaries subject to on-the-spot checks. However, 
excluding  them  would  mean  further  on-the-spot  checks  in  excess  of  the  control  rate,  resulting  in  an 
unnecessary burden for the paying agency. Neither of the two options is feasible.  

−  The possibility of a project being financed under several entitlements is examined and eliminated as part of 
the comprehensive and systematic administrative checks. Where an administrative check draws the attention 
of the on-the-spot auditor to possible issues, then it makes sense to investigate a beneficiary’s obligations 
under different entitlements also as part of the on-the-spot check. This practice is applied consistently by the 
Hungarian authorities.  

−  The  Hungarian  authorities  are  convinced  that  they  have  interpreted  Article  28(2)  of  Regulation  (EC)  No 
1975/2006  correctly.  The  Commission’s  audit  service  was  able  to  ascertain  during  its  visit  that  the 
authorities  subjected  all  obligations  of  a  beneficiary  relating  to  a  project  or  an  application  for  support  to 
strict  controls.  In  addition,  the  Hungarian  authorities’  interpretation  of  the  Regulation  in  no  way  poses  a 
financial risk in the case of aid financed by the rural development fund. 

−  The  Hungarian  authorities  wish  to  point  out  that  all  the  minutes  of  the  measure  inspected  contain  the 
following question: ‘Does any indication or circumstance on site raise suspicion of a duplication of funding 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

through another Community or national programme?’ The on-the-spot auditor must answer the question in 
a way that takes into account both previous, already closed projects and currently on-going projects of the 
beneficiary. The Commission’s audit service also managed to verify this, since the on-the-spot auditor was 
also  familiar  with  the  other  projects  of  the  beneficiary  in  question.  Owing  to  this  method,  the  procedure 
applied during on-the-spot checks by the Agricultural and Rural Development Agency complies in full with 
the ambiguous provisions of Article 28(2) of Regulation (EC) No 1975/2006. 

Please note that the European Commission has accepted the Member State’s reply. 

Hungary will investigate this question further and take all necessary and rational measures in order to comply with 
the Court of Auditor’s requirements. 

Italy:  

Regarding the area measurements, in January 2012 OPLO approved the updating of the operational manual, which 
provides the inspectors with precise instructions for establishing the exact points to be checked to verify the 
commitments made. As for the structural measures, OPLO will approve the updated version of the operational 
manual for on-the-spot checks by the end of the year, with the same objective. 

Example 
4.5 

Insufficient quality of 
Member State's 
administrative and on-
the-spot checks 

One of the Court's re-

Italy:  

The European Commission has already launched a conformity procedure under Article 31(2) of Regulation (EC) 
No 1290/2005  and  has  asked  the  Regional  Paying  Agency  to  inform  it  by  11  January  2013  of  the  corrective 
measures taken or planned and the timetable for implementation.  The Paying Agency is preparing the draft reply 
indicating  the  steps  taken  and  planned  to  assure  the  Court  of  Auditors  of  the  effectiveness  and  efficiency  of  our 
control system: 

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Member State reply 

•  withdrawal of the aid granted to the beneficiary (Order No 6768 of 26 July 2012); 
•  revision  of  the  operational  manual  for  on-the-spot  checks  for  structural  measures,  with  the  addition  of  a 
specific section to enable the delegated agencies carrying out technical checks to distinguish clearly between 
buildings for residential use and buildings for agricultural use; 

•  regular  meetings  with  the  delegated  agencies  performing  the  checks  for  training  purposes  to  increase  the 

effectiveness and efficiency of the control procedures described in the manuals; 

•  repetition  of  the  technical  and  administrative  checks  to  properly  verify  the  eligibility  of  the  costs  in  all  aid 

applications with a risk factor submitted under Measure 121 since the programme began; 

•  in the 2012 second level control plan for Measure 121, the percentage of second-level checks for measure 121 

will be increased in 2012; 

•  audit action on the management of Measure 121 and the Province of Bergamo; 

increased percentage of ex-post checks on measure 121 and any other measures judged to be at risk. 

Annual Report 

performance checks in 
Italy (Lombardia) was of 
a project to construct a 
two-storey building on a 
farm including a 
laboratory for the 
processing of fruit and 
other farm products, a 
storage area and a terrace 
for drying fruits. 

The paying agency 
approved the full amount 
of the final payment 
claim of 221 205 euro 
following both 
administrative and on-
the-spot checks. 

However, the Court 
found that the building 
had predominantly the 
characteristics of a 
private residence and not 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

of an agricultural 
building and that thus the 
related costs were not 
eligible. The fact that the 
national authorities 
accepted the full amount 
of expenditure declared 
indicates a material 
system weakness in the 
administrative and on-
the-spot checks. 

Commission reply to 
Example 4.5 — 
Insufficient quality of 
Member State's 
administrative and on-
the-spot checks 

Example 4.5.  The 
Commission will, in the 
context of the conformity 
clearance procedure, 
follow-up the case with 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

the Italian authorities. 

4.30 

Commission reply to 4.30 

Austria:  

The Commission has 
carried out cross 
compliance audits in the 
six Member States 
audited by the Court 
(although not the same 
regions in Spain and 
Italy) and has also 
observed serious 
weaknesses in the 
definition and control of 
the GAEC standards and 
SMRs. Whenever in these 
six Member States a risk 
for the Funds had been 
clearly established, the 
Commission has applied 
a financial correction in 
the framework of several 

The conformity clearance procedure is still ongoing. 

Denmark:  

The implementation of SMR 1 – bird protection and of minimum requirements concerning the use of plant 
protection products has been adjusted with effect from 15 March 2012. Measures have been concluded. 
The implementation of SMR 4 – nitrates is being adjusted with effect from 01 February 2013. Measures will be 
concluded on 01 February 2013. 
The implementation of GAEC is being adjusted with a view to improving as from 01 February 2013 the 
implementation of the GLM standards laid down by Regulation.    
In addition, consideration is, for GAEC, being given to implementing further measures in the course of 2013 and 
2014 on the basis of the Commission letter dated 31 July 2012 concerning notification of the Commission 
regarding measures to implement conditions for good agricultural and environmental condition.   

Hungary:  

In line with the findings of the Commission audits, we have adjusted the cross compliance audit system and 
resolved the problems. 

Italy:  

No comment on the methodology. 

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Paragraph  Observation in the 2011 

Member State reply 

4.31 

Annual Report 

of these enquiries 
(Denmark, Hungary, 
Austria and other regions 
of Italy and Spain) or 
clearance of accounts 
procedure is ongoing in 
relation to enquiries 
concerning these six 
Member States. 

Furthermore, the 
planning and timing of 
the checks showed 
weaknesses in five of the 
six Member States 
audited (Denmark, Spain 
(Galicia), Italy 
(Lombardia), Hungary 
and Finland). For 
instance, one Member 
State (Italy (Lombardia)) 
carried out all checks for 
three SMRs16 between 
October and December. 

Denmark:  

Since 2011, the cross-compliance verification of certain GAEC requirements and certain requirements under SMR 
1 and SMR 5 has been released from area verification, with a number of cross-compliance verifications being 
started earlier in the year, where verification of the requirements is appropriate. The change has had an effect in the 
verification year 2012 and later. 

Spain:  

In the 2011 and 2012 marketing years all the inspections were carried out within and throughout the calendar year. 

Finland:  

The instructions regarding the on-the-spot cross compliance sample checks performed under the responsibility of 
the Agency for Rural Affairs and the Food Safety Authority (Evira) specify that the checks should be performed 
during  the  same  calendar  year  during  which  the  aid  application  is  submitted.  Of  the  on-the-spot  sample  checks 
reported for 2010, 66 were performed in 2011. A total of 24 on-the-spot cross compliance sample checks scheduled 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Hence the requirements 
which had to be respected 
outside these months, 
such as the ban on 
spreading manure and 
other substances 
containing nitrates on the 
fields until 28 February 
in nitrate vulnerable 
zones, were not 
effectively checked. 

for  2011  were  postponed  to  2012.  At  the  regional  level,  it  is  only  a  matter  of  individual  cases  in  the  different 
regions of the Centres for Economic Development, Transport and the Environment.  

In Finland, the climatic conditions pose limitations to the timing of some on-the-spot cross compliance checks. For 
example, the on-the-spot GAEC checks and SMR checks must be performed during the season in which cultivation 
work is carried out at the farms; in other words, the checks are in practice primarily performed between June and 
October.  

Hungary:  

The Commission did make preliminary remarks about the timing of the checks but later retracted them in view of 
the Member States’ replies and did not reiterate them in subsequent stages of the procedure. 

16  SMR 1 (Council 

Italy:  

Directive 79/409/EEC 
of 2 April 1979 on the 
conservation of wild 
birds (OJ L 103, 
25.4.1979, p. 1)); 
SMR 4 (Council 
Directive 91/676/EEC 
of 12 December 1991 
concerning the 
protection of waters 
against pollution 

Regulation (EC) No 1122/2009 provides:. 
in  Article  53(1)  that  ‘...each  farmer  selected  for  an  on-the-spot  check  shall  be  checked  at  a  time  when  most 
requirements and standards for which he was selected may be checked. ...’; 
in Article 53(3) that ‘the checks ... shall, as a general rule, be carried out as part of one control visit ...’; 
in  Article  53(6)  that  ‘On-the-spot  checks  related  to  the  sample  provided  for  in  Article  50(1)  shall  be  carried  out 
within the same calendar year where the aid applications are submitted.’  
OPLO therefore makes its selections on the basis of the following factors: 
-  receipt of the aid applications for the current calendar year, the submission deadline being 15 May of each year. 
In  this  connection  we  would  point  out  that  although  Article  51(3)  Regulation  (EC)  No  1122/2009  allows  the 
possibility of a partial selection of the control sample before the end of the application period, this does not alter 
the  fact  that  an  application  needs  to  have  been  actually  submitted  before  the  checks  can  be  carried  out.  In 

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Paragraph  Observation in the 2011 

Member State reply 

- 

- 

Lombardy  applications  are  all  submitted  very  close  to  the  deadline;  the  Paying  Agency  cannot  justify  checks 
where no application has been submitted; 
the  availability  of  the  reference  rules  for  the  year  concerned,  particularly  the  coordination  circular  issued  by 
AGEA, which must be implemented through the issue of a new control manual; 
in the light of Article 51(4) of Regulation (EC) No 1122/2009, which provides that: ‘The samples of farmers to 
be  checked  in  accordance  with  Article  50  shall  be  selected  from  the  samples  of  farmers  which  were  already 
selected pursuant to Articles 30 and 31 and to whom the relevant requirements or standards apply...’, OPLO has 
to select the sample of farmers after the selection of the eligibility sample. 

Furthermore, given the diversity of time limits relating to the commitments under the cross-compliance system, it is 
impossible  to  find  a  suitable  period  that  meets  all  the  requirements  and  standards  for  which  an  application  was 
selected. 
Lastly, as specified in the manual for cross-compliance checks, obligations arising in periods preceding the on-the-
spot cross-compliance checks are verified on the basis of the negative results of the checks carried out by the 
competent local authorities (municipalities, managing bodies for SCIs and SPAs, the State Forestry Authority, etc.) 
as part of their institutional duties.  
OPLO will endeavour to adjust the scheduling of the checks for 2013 to comply with the ECA's comments. 

Annual Report 

caused by nitrates 
from agricultural 
sources (OJ L 375, 
31.12.1991, p. 1)) and 
SMR 5 (Council 
Directive 92/43/EEC 
of 21 May 1992 on 
the conservation of 
natural habitats and of 
wild flora and fauna 
(OJ L 206, 22.7.1992, 
p. 7)). 

Commission reply to 

4.31. 

During the cross 
compliance audits, the 
Commission 
systematically verifies the 
compliance with the 
planning and timing of on 
the spot checks 
requirements (whether 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

appropriate level of 
control is achieved by the 
Member States during the 
year, whether inspections 
are carried forward to 
the following year, the 
respect of the notification 
deadlines, etc). The 
Commission has also 
observed these 
weaknesses in Hungary, 
Italy and other Member 
States and follows them 
up through the 
conformity clearance 
procedure. 

The Court also found in 
three of the Member 
States audited (Italy 
(Lombardia), Hungary 
and Finland) that, when 
the checks were carried 
out, non-compliance did 

4.32 

Finland : 

See the reply in Annex II, in the section entitled “1 1.SYS.TO5.NR2.1504 / No sanction for repeated non-
compliance”. 

Hungary:  

In accordance with the Commission’s remarks, the Member State changed the way the above-mentioned non-
compliance cases were handled in order for the required reductions to be applied properly. 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

not always lead to the 
required reductions. In 
one Member State (Italy 
(Lombardia)), for the six 
SMRs relating to 
animals, no reductions on 
the basis of the criteria 
set by the legislation 
(extent, severity and 
permanence of the non-
compliance) were set. 
Instead, this Member 
State evaluated whether 
the error was correctable 
and whether this was the 
first time that an error 
was identified for the 
beneficiary checked. 
Consequently, the 
majority of 
non-compliance cases 
were treated as minor for 
which no reduction was 

Italy:  

In response to the ECA’s comments, for 2013 we shall make the appropriate changes to the system for evaluating 
cases of non-compliance detected during checks by the veterinary services. 
In  any  case,  in  Italy  (Lombardy)  reductions  have  always  been  made  on  the  basis  of  the  criteria  laid  down  in  the 
legislation (extent, severity and permanence of the non-compliance), since minor instances of non-compliance for 
which veterinary orders have been issued are considered to be of insignificant extent or severity. 
As regards the evaluation of the veterinary orders, we consider that the provisions of Article 24(2) of Regulation 
(EC)  No  73/2009  were  correctly  applied,  since  for  each  act  a  list  was  made  of  all  the  minor  cases  of 
non-compliance, the corrective action to be taken immediately or by a specified deadline, including the details of 
how  and  when  the  action  was  to  be  taken,  and  infringements  which  cannot  be  considered  minor  since  they 
constitute a direct risk to public and animal health.  
The following is the reference legislation for the bovine register (A7), for example: 
Article  4  of  Legislative  Decree  No  58  of  29  January  2004,  Penalties  for  infringements  of  Regulations  (EC)  No 
1760/2000 and (EC) No 1825/2000 on the identification and registration of bovine animals and on the labelling of 
beef and beef products pursuant to Article 3 of Law No 39 of 1 March 2002, provides that  ‘In the case of a first 
report on the holding of a keeper of animals, the authority performing the check shall, if it detects infringements 
that  can  be  remedied  while  guaranteeing  the  reliable  identification  of  the  animals,  prescribe  to  the  keeper  the 
adjustments to be made to fully rectify the infringements detected, setting a time limit of not more than fifteen days, 
without prejudice to any shorter time limits provided for in Community legislation. Where the keeper of the animals 
complies with all the instructions issued by the authority for rectifying the situation within the time limit set, the 
penalties relating to the infringements shall be cancelled’. 
The above provisions are also the basis for the following passage from Circular ACIU.2012.214 of 15 May 2012, 
which, regarding “minor cases of non-compliance” provides that: “In general terms, the breaches of commitments 
described shall be considered minor if both the following conditions are fulfilled: 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

- it is possible to correct them (e.g. by updating the register or adjusting the quantity of livestock farmed); 
- they have been detected for the first time on the farm concerned. 
Any non-compliance that makes it impossible to correctly identify the animals present on the holding, transferred 
or slaughtered within the time limits and according to the procedures laid down, and which it is therefore 
impossible to remedy, shall not be considered minor’. 

applied. 

Commission reply to 

4.32. 

4.32. The Commission 
pays particular attention 
to the evaluation and 
sanctioning system 
established by the 
Member States for cross 
compliance (leniency of 
the system, adequate use 
and follow up of minor 
non compliances, non 
compliances not leading 
to a reduction because of 
the incorrect use of 
tolerances , etc). These 
weaknesses have also 
been observed by the 
Commission in the 
Member States mentioned 
by the Court and the 
consequent risk for the 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Funds is being followed 
up through the 
conformity clearance 
procedure. The 
Commission has also 
observed specific serious 
deficiencies in relation to 
the cross-compliance 
controls on animal SMRs 
in Italy and is following 
this up through the 
conformity clearance 
procedure. 

The Court also reviewed 
the work done by the 
certification body 
concerning EAFRD in 
the Member State 
(Denmark) where it had 
identified the most 
serious weaknesses in the 
supervisory and control 
systems. The Court found 

4.38 

Denmark:  

The approval body – whose tasks are taken care of by the audit firm Deloitte – states the following:  

“Re (a) 
Based on our organisation and internal and external rules, we consider the criterion of complete independence to be 
fulfilled.  

Under international auditing standards relating to the use of other auditors’ work (ISA 600), it is general practice 
for auditors to be able to support opinions from declarations issued by other auditors. ISA 600 should be read in 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

that this certification 
body: 

(a)  was not fully 

independent as 
legally required, as 
the firm which 
carried out the 
certification work 
was also involved in 
pre-payment 
eligibility checks in 
35 % of the 65 files 
audited; 

(b)  relied to a significant 
extent on the work 
carried out by the 
internal audit unit of 
the paying agency, 
without 
documentation 
showing that this 
work was 
sufficiently 

conjunction with ISA 200 “Overall Objective of the Independent Auditor, and the Conduct of an Audit in 
Accordance with International Standards on Auditing”. (The competent auditor, who draws up the said declarations 
(independent auditor declaration), promises on the declaration standard to comply with the rules governing 
independence.) 

Independence has been ensured between auditors who issue declarations concerning the annual accounts and 
auditors who issue declarations on the individual project accounts, etc. 

Since the start of the task, independence declarations have been used for all employees connected with the task as 
an Approval Body. The individual employee has declared that they have not and will not assist Deloitte clients with 
drafting accounts or applications that form the basis for payments from grant schemes under the said funds, and that 
the employees have not otherwise provided advice that may compromise their independence with respect to the 
Danish AgriFish Agency. The employees further declare that they, their household or their immediate family have 
not received support from grant schemes under the said funds. 

We would further point out that, based on agreement with the Danish AgriFish Agency, we have followed previous 
practice in this area, and our solutions are therefore in line with the approach adopted by previous auditors. We 
have been informed that the responsible body is considering a different model.   

Our measures are based on the issue of specific declarations of independence (enclosed as Annex A) for the 
Approval Body’s team. Furthermore, by agreement with the Danish AgriFish Agency for 2012, we have examined 
10 random system samples in which all records are called up and verified, which has given us a further audit 
opinion.  

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

reviewed; 

(c)  had not sufficiently 
checked that the 
expenditure 
complied with all 
eligibility 
conditions. In seven 
of 11 files selected 
which had been 
checked by the 
certification body, 
the Court identified 
ineligible 
expenditure 
representing 8 % of 
the EAFRD amount 
checked. 

Commission reply to 4.38 

and (b) In the 

(a) 
framework of the 
financial clearance 
procedure, the 

Re (b) 
In accordance with ISA 610 “Statement on internal audit work in assessing whether the nature and scale of internal 
audit work is sufficient for certification purposes”, the Approval Body has conducted a documented (working paper 
1410 supplied to the Commission) evaluation of the Internal Audit Unit within the Payment Body. The evaluation 
is based on four essential characteristics:  

•  Organisational placement 
•  Functional description of the Internal Audit Unit 
•  Professional competence of the Internal Audit Unit 
•  Whether audit planning for the internal audit has been carried out in accordance with good auditing practice 

The four essential characteristics must be fulfilled for us to be able to use work performed by the Internal Audit 
Unit. The Approval Body’s review of these criteria has not prompted any comments.  

Based on the recommendations received, we have for 2012 revised the audit in accordance with the 
recommendations from the Court of Auditors and the Commission. As a measure from 2012, checklists containing 
conclusions for the review of the Internal Audit Unit’s work have been drawn up.  

Re (c)  
We have noted the Court of Auditors’ interpretations and have organised our audit in accordance with this. As a 
measure for 2012, checklists for the review of cases have been adapted in accordance with the Court of Auditors’ 
recommendations, and the audit team has been informed of the Court of Auditors’ interpretations of eligible 
expenditure.” 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Commission will follow 
up the issue with the 
Danish authorities, 
notably with a view to 
reinforcing the 
operational 
independence. 

(c) 
The work that the 
certification bodies have 
to do in relation to the 
financial clearance 
procedure is mostly 
aimed at checking that 
the accounts are 
complete, accurate and 
true. 

Annex 
4.2 

Result of examination of 
systems for rural 
development 

Austria:  

No. (The monitoring and control systems were described as effective in the overall assessment for Austria). 

Denmark:  

The Danish AgriFish Agency notes the Court of Auditors’ assessments in Annex 4.2 and will, in accordance with 
the answers provided under points 4.24, 4.25, 4.26, 4.28, 4.30, 4.31 and 4.38, continue to work on rectifying the 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

aspects criticised. 

Finland:  

The replies of the Agency for Rural Affairs to the findings compiled into the table are shown among the replies to 
individual cases in Annex II. 

Hungary:  

Measures taken by the Member State are indicated under points 4.20-4.32 of Annex I. 

Italy:  

See answers to individual findings  
Point b, ‘Incorrect national implementation of the Nitrates Directive‘, no longer applies since the final document 
ARPF 4604 was drawn up. 

Chapter 5 – Regional Policy; Energy and Transport 

5.27 

Annex 1.1, part 2, of 
Chapter 1 describes the 
Court's overall audit 
approach and 
methodology. For the 
audit of regional policy, 
energy and transport, the 
following specific issues 

Hungary:  

The referenced part did not require Hungary to take any action. 

Portugal:  

No comment. 

Czech Republic:  

Not applicable – there is no error involved. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

should be noted: 

Romania:  

Member State reply 

a) 

b) 

- 

- 

the audit involved 
the examination of 
a sample of 180 
interim and final 
payments14 in 
Member States and 
at the Commission; 

the assessment of 
systems covered; 

AA 
The ECA preliminary audit report (May 2012) has undergone an internal review within the Audit Authority in 
Romania. Following this action, the Audit Authority (AA) has formulated and submitted to ECA its views on the 
preliminary findings, providing ECA auditors additional information to support the AA position. AA also expressed 
their willingness to participate in a tri-partite meeting (ECA, EC, AA) where to support their position and present 
ECA the measures to be taken on the matters which ECA auditors considered to need some improvement. The tri-
partite meeting was held in June 2012.  
Following these actions, some preliminary findings of the ECA have been reconsidered in the final audit report of 
the ECA, which led to a new classification of the AA in the sense of increasing the overall level of its effectiveness 
(final audit report received from AA in October 2012).  

audit authorities 
for ERDF, ESF 
and CF in the 
2007-2013 
programming 
period15; 

the procedures 
implemented at 
Commission and 
Member State 
level with regard 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

- 

to the programme 
closure for the 
2000-2006 
programming 
period; 

a review of the 
Commission’s 
management 
representations 
contained in the 
Annual Activity 
Reports of DG 
Regional Policy, 
DG Mobility and 
Transport and DG 
Energy. 

14 

This 

sample 
comprises  180 
payments  made 
to  129  ERDF, 
39 
8 
CF, 
Energy  and  4 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

Transport 
projects.  148  of 
the payments to 
ERDF/CF 
projects  relate 
to 
the  2007-
2013 
programming 
period  and  20 
the  2000-
to 
period. 
2006 
The sample was 
drawn  from  all 
payments,  with 
the exception of 
advances  which 
amounted to 1,4 
billion  euro  in 
2011. 

15 

The 

audit 
Court’s 
work  regarding 
consisted 
AAs 
of: 
an 
(a) 
examination  of 
a 
of 
sample 
seven AAs (and, 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

where 
applicable, 
delegated  audit 
bodies) in seven 
Member  States 
(Czech 
Republic, 
Italy 
Greece, 
(Sicily),  Latvia, 
Hungary, 
and 
Portugal 
Romania);  and 
(b)  a  review  of 
the 
Commission’s 
supervisory 
activities 
of 
AAs as a whole. 
the  2010 
See 
Annual  Report, 
paragraphs 
4.37 to 4.44. 

5.58 

The Court’s examination 
covered the initial phase 
of the closure process and 
was based on: 

Germany:  

1.  The ESF Managing Authority is continuing to work together with the Commission on the closure of the 

Programme for the 2000-2006 Programming Period and is making the necessary information available upon 
request. 

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Paragraph  Observation in the 2011 

Member State reply 

(a) 

(b) 

Annual Report 

a review of 
procedures, 
manuals, checklists, 
monitoring and 
reporting tools 
within DG 
Regional Policy 
and DG 
Employment, 
Social Affairs and 
Inclusion; 

an examination of 
the Commission’s 
assessment of 
closure documents 
for a sample of 31 
OPs (both ERDF 
and ESF) in eight 
Member States32 
none of which had 
been formally 
closed at the time 
of the audit; 

2.  The ERDF Managing Authority in Mecklenburg-Vorpommern (MV) gave the following information 

(extracted from ARES file 2012 1122176):  
The European Commission, DG REGIO, in its audit report of 26 September 2012 published its preliminary 
findings on the verification of the winding up declarations for the ERDF Objective 1 Programme for 
Mecklenburg-Vorpommern for the 2000-2006 programming period. The difference between the error rates, 
which the MV Audit Authority and the Commission auditors detected in the eight cases selected for audit 
by random sampling is so slight that the quality of the Article 10 controls as a whole was held to be 
appropriate. The contradictory procedure has not yet been completed. MV has rejected the individual audit 
findings with a financial impact. 

Austria:  

No 

Ireland:  

The Commission’s reservations derive from preliminary findings based on an initial examination of closure 
documentation submitted.  A contested procedure is currently underway.  Ireland is confident of the robustness of 
its financial management and control systems and will vigorously defend them in the ongoing contested procedure. 
Furthermore no such issues have been identified in the 2007-2013 round despite extensive checks and audits. 

Netherlands:  

All OPs where the Netherlands was involved have been closed and there are no indications that the assessment of 
the European Court of Auditors had any impact on their closure. 

United Kingdom: 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

(c)  visits to nine 

DCLG: Simply a factual statement and no UK response required. 

winding-up bodies 
in two Member 
States, covering 14 
of the 31 sampled 
programmes, and 
including analysis 
of the data 
underlying the 
information 
reported in their 
closure documents. 

32 

Germany, 
Spain, 
Italy, 

Ireland, 
France, 
Netherlands, 
and 
Austria 
United  Kingdom. 
For 
the 
Italy, 
audit  was  carried 
out 
in 
coordination  with 

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Annual Report 

Member State reply 

a 

Joint 

the 
Italian 
Supreme  Audit 
Institution  (Corte 
dei Conti Italiana) 
on  the  basis  of  a 
Memorandum  of 
Understanding 
and 
Declaration 
the 
by 
signed 
Presidents  of  the 
Corte  dei  Conti 
the 
of 
and 
European  Court 
of  Auditors.  For 
the 
audit, 
this 
coordinated 
activities 
essentially 
covered 
the 
collection of audit 
evidence. 

Table 5.2  Effect of unjustified 

Austria:  

reductions of final error 

Austria sees no need for comment or follow-up. The European Commission has analysed and accepted the 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

rates reported in 
winding-up declarations 

Annex 
5.2 

Results of examination 
of systems for cohesion 
(regional policy and 
employment, social 
affairs and inclusion) 

winding-up declaration, and has approved payment of the outstanding final installment. 

Spain:  

The letter of 16 October 2012 sent to the Commission included the explanation given to the Commission of why 
the rate of irregularity was not felt to be justified, on the basis of the Action Plan imposed on the Directorate-
General of Local Administration by the Commission itself and the corrective measures imposed, which were 
accepted by the Commission. Also included was the breakdown of the expenditure corresponding to the years prior 
to this Plan, which explain the overall rate of irregularity included in the Addendum to the additional report to the 
winding-up report drawn up by the IGAE. 

United Kingdom: 

Department for Communities and Local Government (DCLG): On the 7 December 2012 DG Regio sent DCLG a 
letter  which  they  had  received  from  the  ECA  accepting  that  the  so  called  “unjustified”  reductions  were  in  fact 
justified and they withdrew this point. 

The Welsh Authority (WA): WA rejects the comment above in relation to objective 1 ERDF programme. 
Correspondence has been received from the ECA to confirm that no further action is required in relation to its audit 
visit. 

Hungary:  

The Audit Manual has been modified, the measure is being continuously implemented. 

Portugal: 

No comment. 

Czech Republic:  

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

Methodology for audits of operations: Audit work carried out to examine the regularity of operations is based on 
checklists  containing  questions  that  verify  the  requirements  of  the  applicable  regulations  at  a  sufficient  level  of 
detail to address the associated risks.   

From  the  very  beginning  these  checklists  have  formed  part  of  the  AA’s  Manual  for  Audits  of  Management  and 
Control Systems and its Operational Manual. At the same time, the delegated bodies of the AA also used their own 
checklists  in  view  of  the  specific  nature  of  each  relevant  operational  programme.  Neither  EU  legislation  nor  the 
COCOF guidelines stated that uniform checklists must be used for all operational programmes, and their level of 
detail was likewise nowhere specified (i.e. whether primarily to verify the regularity of expenditures based mainly 
on invoices, or whether to verify the actual selection of projects based on calls). In this area the Audit Authority has 
learned  from  the  European  Commission’s  auditors  during  the  performance  of  their  audit  missions  in  the  Czech 
Republic. The Audit Authority therefore added additional questions to the checklists and made the lists available to 
its  delegated  audit  bodies.  However,  in  addition  to  these  checklists,  checklists  were  still  completed  which  were 
specific to each of the individual operational programmes. Due to the different levels of detail in the checklists used 
in different Member States, the Commission made its checklists available to the Member States, although only in 
October  2011.  The  Audit  Authority  immediately  applied  these  checklists  during  audits  of  operations  carried  out 
from  1.1.2012.  In  connection  with  revisions  made  to  the  methodology,  these  checklists  are  currently  being 
improved and refined, with the aim of using them - including in the information system of the AA - from 1.1.2013. 

Review of audits of operations: Audits of operations were carried out in accordance with the sample selected for the 
relevant period and in accordance with the methodology developed by the AA, and all the phases of the audits of 
operations were properly documented.  

The selection of the samples for 2010 and 2011 has already been mentioned in the points above. The sample for 
2012 will be selected, as stated, in the AA’s information system, with consideration given to the AA’s opinions on 
the individual operational programmes and to the recommendations of the European Commission. In view of the 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

low  level  of  reliability  of  the  management  and  control  system,  a  considerably  greater  number  of  audits  will  be 
selected for the sample. Although the Audit Authority has carried out a review of its administrative capacities using 
process maps in connection with the centralisation process, a question remains as to whether these capacities will 
be sufficient. 

Audit documentation is stored in audit files and in the AA’s information system, together with the checklists. It is 
true  that  the  level  of  detail  of  this  documentation  sometimes  varies.  The  Audit  Authority  is  therefore  improving 
both its information system and its checklists so that the documentation of the entire course of the audit will be as 
precise as possible. Once audit activities have been centralised the AA will be able to focus more attention on the 
issues involved, and more easily introduce the application of a uniform approach to the contents of the audit files. 

Romania:  

AA 
Having regard to the issues noted by ECA auditors in the audit report on the evaluation of the activity carried out 
by the AA on ROP and SOPT, actions were initiated at AA level leading to the strengthening of the audit 
methodology, especially as regards audit operations, and the effective application thereof. Thus, in terms of audit 
methodology, actions are aimed mainly at reviewing the check lists on operations audit (e.g. updates/additions with 
issues to be checked in state aid, income generating projects, cost-benefit analysis, approval of major projects) and 
in procurement (e.g. formalization and extension of checks within procurement procedures, namely the open 
procedure and clarification of some aspects related to audit documentation).  
In terms of the application of audit methodology, AA has already held, in November 2011, a meeting with the 
auditors at the local level, during which aspects from the ECA audit report were disseminated and analysed, with 
the discussions falling within the scope of the coordination and supervision at central level of activities at local 
level. AA management will continue to hold regular meetings to discuss issues on the application of audit 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

methodology to ensure a uniform approach at the level of AA structures. 

Chapter 6 – Employment and Social Affairs 

6.19 

6.19.  The Court 
assessed the work of two 
audit authorities (AAs) in 
two Member States in 
2011, as part of its 
examination of a total of 
seven AAs covering the 
ERDF, CF and ESF. The 
scope of the Court’s audit 
is described in paragraph 
5.40. For the two ESF 
AAs audited in Italy 
(Sicily) and Latvia the 
review of their work and 
re-performance of their 
audits of operations 
focused on ESF 
expenditure.The results 
of the Court’s audit of the 

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Paragraph  Observation in the 2011 

Member State reply 

6.20 

Annual Report 

AAs for all Structural 
Funds are reported in 
Chapter 5 (paragraphs 
5.41 to 5.43 and 
Annex 5.2). 

The AA of Latvia is rated 
as effective in complying 
with key regulatory 
requirements and in 
ensuring the regularity of 
transactions. The AA of 
Italy (Sicily) is rated as 
partially effective. The 
Court noted particular 
problems in the AA’s 
sampling of operations 
for audit and in its 
extrapolation of errors, 
which led to the 
disclosure of an 
understated error rate in 
the AA’s Annual Control 
Report (ACR). The 

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Member State reply 

Annual Report 

Commission, based on its 
own work, also 
considered the error rate 
as unreliable (see 
paragraphs 5.42 to 5.43). 

Commission reply to 

6.20. 

6.20. In 2011, DG EMPL 
carried out audits to 
review the work of 42 
ESF audit authorities, 
including the AA of Sicily 
and Latvia. In this 
sample, 12 AAs were 
selected following a risk 
analysis, updated on an 
annual basis, and the 
other 30 were chosen at 
random. Based on its own 
audit work, DG EMPL 
concurs with the 
assessment of the two 
AAs sampled by the 

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Paragraph  Observation in the 2011 

Annual Report 

Court. 

Member State reply 

Chapter 7 – External aid, development and enlargement 

Ireland:  

With regard to issues raised on ECHO funding we would like to point out that ECHO has a range of its own 
partners (UN agencies and NGOs) who receive funding that is governed by “Framework Partnership Agreements”. 
Ireland has no connection whatsoever with these agreements. The comments made with respect to certain 
transactions of some of ECHO’s partners thus pertain to ECHO 

, not Ireland. Furthermore, in section 7.22 of the ECA’s report ECHO itself responds to the points raised in section 
7.12. 

7.12 

7.12  Annex 1.1, 
Part 2, of Chapter 1 
describes the Court’s 
overall audit approach 
and methodology. For the 
audit of external 
relations, aid and 
enlargement, the 
following specific issues 
should be noted: 

(d)  The audit involved 

examination of a 
sample of 
150 payments, 
comprising 
30 advances and 
120 interim and final 

4 

Cameroon, Georgia, Malawi, Palestine, Philippines, Russia, Tunisia and Vietnam (EuropeAid) and Albania, Montenegro and Serbia (DG ELARG). 

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Member State reply 

Annual Report 

payments. The 
advances audited 
covered 
18 countries. The 
tested interim/final 
payments approved 
by Commission 
headquarters or EU 
delegations covered 
11 countries4. In the 
case of DG ECHO, 
the audited 
interim/final 
payments were made 
under projects 
implemented by four 
DG ECHO partners5. 

(e)  The assessment of 

systems covered the 
supervisory and 
control systems of 
EuropeAid, DG 

5 

Two based in Switzerland, one in France and another one in Ireland (payments made under 16 humanitarian aid projects implemented in 11 countries were audited). 

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Member State reply 

Annual Report 

ECHO and FPI at 
headquarters as 
well as at EU 
delegations, where 
relevant, including: 

(i) 
controls, 

ex-ante 

(ii)  monitoring 

and supervision, 

(iii)  ex-post 
controls/external audits, 

(iv) 

internal 

audit. 

4 

Cameroon, 
Georgia,  Malawi, 
Palestine, 
Philippines, 
Russia, 
Tunisia 
Vietnam 
and 
(EuropeAid)  and 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

5 

Albania, 
Montenegro  and 
Serbia 
(DG 
ELARG). 
Two based in 
Switzerland, one 
in France and 
another one in 
Ireland (payments 
made under 16 
humanitarian aid 
projects 
implemented in 11 
countries were 
audited). 

9.17 

In the case of one 
negotiated procedure 
relating to printing 
services, the specification 
for the location of the 
services to be provided 

Chapter 9 – Administrative and other expenditure 

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Member State reply 

Annual Report 

was not drafted in a clear 
and transparent manner. 
In addition, the potential 
tenderers consulted were 
all based in Luxembourg, 
thereby restricting cross 
border competition. Out 
of the 11 potential 
tenderers consulted, only 
the previous contractor 
submitted a bid and was 
awarded the contract for 
60 000 euro over four 
years. Furthermore, 
compliance with selection 
criteria was not checked 
before entering into the 
negotiation, in 
contradiction with the 
provisions of Article 
122(3) of the 
implementing rules of the 
Financial Regulation. 

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Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

9.19 

Commission reply to 9.19 

Belgium:  

Budget : N/A 
Bureau d’Intervention et de Restitution Belge : néant 
Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 
Autorité d’audit (Région Bruxelles- Capitale) : néant 
SPF Fin. Affaires fiscales  : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
FSE : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 
ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 

9.19. An automatic 
update of the amounts of 
the allowances of like 
nature from the Belgian 
State is being 
implemented by the 
Commission in 
SYSPER2/Rights (the 
information system for 
the management of 
individual entitlements) 
since April 2012. This 
automatism will 
significantly decrease the 
risk of errors as the 
update will not be done 
manually any more. The 
other Member States will 
follow.  

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Additionally, a new 
module will be put in 
place in the front office 
of SYSPER2/Rights. 
Staff will be asked to 
declare the professional 
activity of their spouse. 
The other modules of 
SYSPER2/Rights being 
implemented also include 
sections of allowances of 
like nature. 

9.25 

Commission reply to 9.25 

Belgium:  

9.25. The EEAS will 
address its staff regularly, 
once a year, to request the 
update of their personal 
file and remind them of 
their duty to declare such 
allowances. This message 
will be issued in 
September. The IT 
systems must allow a 

Budget : N/A 
Bureau d’Intervention et de Restitution Belge : néant 
Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 
Autorité d’audit (Région Bruxelles- Capitale) : néant 
SPF Fin. Affaires fiscales  : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
FSE : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 

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Paragraph  Observation in the 2011 

Member State reply 

ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 

Annual Report 

regular update of the 
amounts perceived in 
accordance with national 
or regional 
legislation/rules on 
increases of such 
allowances. The EEAS 
understands that PMO 
has developed an IT tool 
and recently tested it for 
allowances perceived 
from Belgium authorities 
and will successively 
extend this IT application 
for other populations 
including EEAS staff. 
The EEAS will ask PMO 
to be able to benefit from 
this IT application as 
soon as possible. 

9.33 

Commission reply to 9.33 

Belgium:  

9.33. The EEAS will 
address its staff regularly, 

Budget : N/A 
Bureau d’Intervention et de Restitution Belge : néant 

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Paragraph  Observation in the 2011 

Member State reply 

Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 
Autorité d’audit (Région Bruxelles- Capitale) : néant 
SPF Fin. Affaires fiscales  : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
FSE : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 
ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 

Annual Report 

once a year, to request the 
update of their personal 
file and remind them of 
their duty to declare such 
allowances. This message 
will be issued in 
September. The IT 
systems must allow a 
regular update of the 
amounts perceived in 
accordance with national 
or regional 
legislation/rules on 
increases of such 
allowances. The EEAS 
understands that PMO 
has developed an IT tool 
and recently tested it for 
allowances perceived 
from Belgium authorities 
and will successively 
extend this IT application 
for other populations 
including EEAS staff. 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

The EEAS will ask PMO 
to be able to benefit from 
this IT application as 
soon as possible. 

9.34 

Commission reply to 9.34 

Belgium:  

Budget : N/A 
Bureau d’Intervention et de Restitution Belge : néant 
Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 
Autorité d’audit (Région Bruxelles- Capitale) : néant 
SPF Fin. Affaires fiscales  : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
FSE : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 
ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 

9.34 An automatic update 
of the amounts of the 
allowances of like 
nature from the 
Belgian State is being 
implemented by the 
Commission in 
SYSPER2/Rights (the 
information system 
for the management 
of individual 
entitlements) since 
April 2012. This 
automatism will 
significantly decrease 
the risk of errors as 
the update will not be 
done manually any 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

more. The other 
Member States will 
follow.  

Additionally, a new 
module will be put in 
place in the front office 
of SYSPER2/Rights. 
Staff will be asked to 
declare the professional 
activity of their spouse. 
The other modules of 
SYSPER2/Rights being 
implemented also include 
sections of allowances of 
like nature. 

EEAS reply to 9.34 

The EEAS will address 
its staff regularly, once a 
year, to request the 
update of their personal 
file and remind them of 
their duty to declare such 

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Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

allowances. This message 
will be issued in 
September. The IT 
systems must allow a 
regular update of the 
amounts perceived in 
accordance with national 
or regional 
legislation/rules on 
increases of such 
allowances. The EEAS 
understands that PMO 
has developed an IT tool 
and recently tested it for 
allowances perceived 
from Belgium authorities 
and will successively 
extend this IT application 
for other populations 
including EEAS staff. 
The EEAS will ask PMO 
to be able to benefit from 
this IT application as 

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Paragraph  Observation in the 2011 

Member State reply 

Annex 
9.3 

Annual Report 

soon as possible. 

FOLLOW-UP OF 
PREVIOUS 
RECOMMENDATION
S FOR 
ADMINISTRATIVE 
AND OTHER 
EXPENDITURE 

Commission replies 
Annex 9.3 - Commission 
— DG RELEX, Payment 
of social allowances and 
benefits to staff members 

An automatic update of 
the amounts of the 
allowances of like nature 
from the Belgian State is 
being implemented by the 
Commission in 
SYSPER2/Rights (the 
Information System for 

Belgium:  

Budget : N/A 
Bureau d’Intervention et de Restitution Belge : néant 
Autorité de Gestion PO FEDER (Région Bruxelles – Capitale) : néant 
Autorité d’audit (Région Bruxelles- Capitale) : néant 
SPF Fin. Affaires fiscales  : néant 
Autorité d’audit (Région wallonne – Communauté française) : néant 
PO FSE Compétitivité régionale et Emploi de la région de Bruxelles-Capitale 2007-2013 : néant 
FSE : néant 
ESF Vlaanderen (MA/CA/AA) : néant 
EFRO Vlaanderen (MA/CA/AA): néant 
ELFPO: néant 
Communauté germanophone de Belgique: pas concerné par le rapport de la Cour des comptes européenne 
Autorité d’audit du programme opérationnel développé dans le cadre du fonds social européen pour la période de 
programmation 2007-2013 : pas concerné par le rapport de la Cour des comptes européenne 

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Member State reply 

Annual Report 

the management of 
Individual Entitlements) 
since April 2012. This 
automatism will 
significantly decrease the 
risk of errors as the 
update will not be done 
manually any more. The 
other Member States will 
follow.  

Additionally, a new 
module will be put in 
place in the front office 
of SYSPER2/Rights. 
Staff will be asked to 
declare the professional 
activity of their spouse. 
The other modules of 
SYSPER2/Rights being 
implemented also include 
sections of allowances of 
like nature.  

Le PMO, qui assure la 

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Member State reply 

Annual Report 

gestion du personnel du 
SEAE au Siège, 
appliquera une mise à 
jour automatisée des 
allocations perçues par 
ailleurs. Cette mise à jour 
sera étendue au personnel 
du SEAE au Siège dès cet 
automne 2012. S'agissant 
de la population SEAE en 
délégations, le SEAE 
mettra à profit la mise en 
production d'une 
application de déclaration 
des ‘allocations perçues 
par ailleurs’ (‘PPA’) dans 
Sysper2 pour inviter son 
personnel se conformer à 
ses obligations qui 
découlent de l'article 67 
du Statut. 

Chapter 10 – Performance issues 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Box 10.1  Special Reports adopted 

Lithuania: 

Member State reply 

by the Court of 
Auditors in 2011 

Special Report No. 13/2011 of the European Court of Auditors “Does the control of customs procedure 42 prevent 
and detect VAT evasion?” 

On  15  December  2011  the  Council  of  the  European  Union  received  the  Special  Report  No.  13/2011  of  the 
European Court of Auditors entitled “Does the control of customs procedure 42 prevent and detect VAT evasion?”. 

Following the rules laid down in the Council conclusions on improving the examination of special reports drawn up 
by  the  Court  of  Auditors,  the  meeting  of  the  Committee  of  Permanent  Representatives  of  10  January  2012 
commissioned the Working Party on Taxation Issues to examine this report. 

The Working Party on Taxation Issues examined the report and at the meeting of 24 February 2012 agreed on the 
Council conclusions approved as an A-list point by the ECOFIN on 13 March 2012.  

The Council conclusions mention that the Council of the European Union 

- 

takes note of the Court’s recommendations while pointing out that since the reporting period (2009) measures to 
improve  the  regulatory  framework  have  been  stepped  up:  among  other  things,  Article  143(2)  of  the  VAT 
Directive has been modified and in the customs area a unanimously agreed administrative arrangement for the 
Single Administrative Document has been made and will be implemented by all Member States at the latest by 1 
January 2013. 

-  encourages  Member  States  to  continue  to  strengthen  cooperation  in  this  field  and  to  stay  vigilant  as  to  the 

prevention and detection of VAT evasion in connection with customs procedure 42. 

It must be pointed out that in implementing the amendment to Article 143(2) of the VAT Directive 2006/112/EC 

155

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

Lithuania accordingly amended Article 35 of the Law of the Republic of Lithuania on Value Added Tax (Law of 
the Republic of Lithuania on amending and supplementing Articles 2, 3, 51, 9, 12, 121, 123, 13, 14, 15, 19, 35, 36, 
40, 41, 42, 45, 46, 47, 50, 51, 52, 53, 56, 58, 71, 711, 75, 83, 92, 95, 98, 101, 104, 106, 1151, 1152, 1153, 1155, 116, 
118 and 120 and Annex 2 to the Law of the Republic of Lithuania on Value Added Tax (Official Gazette, 2010, No. 
148-7562)). 

Slovakia:  

On  point  13/2011,  Slovak  Ministry  of  Finance:  Although  SlovakIA  is  not  mentioned  in  the  report  on  the  aim  of  
eliminating VAT fraud in the use of the customs regime 42, a provision has been introduced into the VAT Act by 
amendment No 246/2012 effective from 10.1.2012, under which the customs office may require security duties on 
imports of goods that are imported under regime 42. The customs office may require a tax security if it considers 
that the import of goods constitutes a risk transaction on the basis of the goods themselves or on the basis of person 
importing the goods. The amount of security shall be applied at the value of tax that would be paid if the exemption 
did not apply in respect of delivery of goods to another state than the importing state.  If the office is shown that the 
transport  of  the  goods  has  ended  in  another  member  state,  and  the  customs  office  is  provided  proof  of  this,  the 
office will release the security.  

No other departments have provided statements in respect of this part. 

10.23 

In 2011, the Court 
continued to find and 
report on cases where 
sound needs analyses had 

Bulgaria:  

This finding does not concern Bulgaria. 

Slovakia: 

156

 
 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Slovak Ministry of the Economy: An assessment of needs, from which was derived a specific strategy to mitigate 
the consequences of decommissioning nuclear facilities, which forms the basis of strategic plans defined for the 
audited projects did not take place in the Slovak Republic (the Bohunice programme).  A needs assessment was 
carried out only in Lithuania, but such a review is not current because (as stated in the European Court of Auditors 
Report No 16 of 2012), "any project that is in line with the national strategy in the field of energy is considered to 
be result of decommissioning a power station". 

Annual Report 

not been carried out. For 
example, early strategies 
for e-Government – 
where projects may be 
supported by the 
European Regional 
Development Fund 
(ERDF) – were prepared 
mainly in response to 
political declarations 
rather than rigorous needs 
assessments, with the 
result that projects did 
not address the most 
important issues20. And 
for two out of the three 
nuclear decommissioning 
programmes audited by 
the Court, no needs 
assessment was carried 
out in relation to the 
programmes’ objective to 
reduce the impact of 
closing the nuclear plants 

157

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

earlier than originally 
planned21. 

20 

Special 

No 
‘Have 
e-

Report 
9/2011 
the 
Government 
projects 
supported 
ERDF 
effective?’, 
paragraph 
56(a) 
(http://eca.euro
pa.eu). 

by 
been 

21 

Special 

for 

No 
‘EU 

Report 
16/2011 
financial 
assistance 
the 
decommissionin
g  of  nuclear 
plants 
in 
Bulgaria, 

158

 
 
 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

future 

Lithuania  and 
Slovakia: 
achievements 
and 
challenges’, 
paragraph 
and 
(http://eca.europ
a.eu). 

26 
figure  7 

Romania:  

MA NRDP  
As stated by the European Commission, in the opinion of the Romanian authorities this observation does not cover 
the National Plan for Rural Development of Romania. 

10.24 

One consequence of 
inadequate needs analysis 
is that it makes it harder 
to determine which of 
competing projects are 
likely to offer the best 
value for money. This 
was the case in the audit 
of e-Government projects 
referred to above22, and 
also in the audit of the 
EU support for agri-
environment. In the latter 
case, the Court reported 
that targeting funds at 
those areas most in need 

159

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

was key to enhancing the 
environmental effects of 
agri-environment 
support; however, 
Member States had not 
considered targeting on 
the basis of an analysis of 
the costs and benefits 
involved23. 

Special Report 

22  
No 9/2011, 
paragraph 56(b). 

Special Report 

23  
No 7/2011 ‘Is agri-
environment support well 
designed and managed?’, 
paragraphs 72 and 78 
(http://eca.europa.eu). 

Commission’s reply to 

160

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

10.24 

The Commission agrees 
that needs analysis can 
help identify the priority 
projects. However, as 
regards agri-environment 
support, some Member 
States have considered 
the desirable degree of 
targeting on the basis of 
an analysis of the costs 
and benefits involved. 
Romania, for example, 
targets High Nature 
Value agri-environment 
payments on a 
geographical basis, and 
the eligible areas are 
established using macro-
level data. In view of e-
Government projects, 
following EU policy 
initiatives, today, all 

161

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

Member States have 
developed more 
sophisticated e-
Government Strategies 
based on the e-
Government Action Plan 
2011-2015. 

10.32 

Commission 
10.32 

reply 

to 

Bulgaria:  

that 

Commission 
The 
the 
considers 
evaluation  of  the  added 
value of the expenditure 
programmes  has  to  be 
done  in  relation  to  the 
objectives  set  and 
in 
relation  to  the  criteria 
used 
testing 
when 
initially the added value 
the  Commission 
of 
(see  Box 
proposals. 
10.2) 

On 24 November 2011 the Commission proposed a Council regulation on Union support for the nuclear 
decommissioning assistance programmes in Bulgaria, Lithuania and Slovakia (COM(2011) 783) for the period 
2014-2020. This was accompanied by a comprehensive impact assessment that includes an evaluation of the EU 
added value.  
Bulgaria is playing an active part in discussions of this proposal at EU level. 

Slovakia:  

No department submitted any statement in respect of this point. 

162

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

in 

-  First 
indent:  The 
Commission  is  already 
taking  the  observation 
the 
into  account 
discussions 
and 
planning  for  the  next 
generation  of  financial 
instruments  in  the  post-
2013 
Multiannual 
Financial  Framework, 
where 
‘ensuring  EU 
added  value’  is  one  of 
the  key  principles  that 
must be respected by all 
proposed instruments. 

-  Second  indent:  The 
Commission  notes  that 
the Court's performance 
audit 
high 
found 
employment  effects  for 
tourism 
the  examined 
projects. 

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ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Annual Report 

Member State reply 

-  Third 
indent:  The 
Commission  considers 
that the EU added value 
of  the  programmes  was 
clear:  without 
them, 
the  overall 
reaching 
goal  of 
significantly 
improving  EU  nuclear 
safety, 
as 
helping  Member  States 
mitigate  the  effects  of 
early  closure,  would 
have  been  extremely 
difficult. 

as  well 

On 24 November 2011 
the Commission proposed 
a Council regulation on 
Union support for the 
nuclear decommissioning 
assistance programmes 
in Bulgaria, Lithuania 
and Slovakia 
(COM(2011) 783) for the 

164

 
 
ANNEX I. Paragraphs in the 2011 Annual Report and for each of the 2011 findings made by the Court referring to each particular country 

Paragraph  Observation in the 2011 

Member State reply 

Annual Report 

period 2014-2020. This 
was accompanied by a 
comprehensive impact 
assessment that includes 
an evaluation of the EU 
added value. 

165

 
 
 
ANNEX III A 
Questions put to Member States concerning policy areas Agriculture and Cohesion 

Part A.  Please reply to the general questions below   

1) In its report, the Court found weaknesses in the checks made by national authorities ("first level checks"). The Court also identified some 
cases in which national authorities had not effectively assessed whether costs claimed were reasonable. - see Chapters 4.26, 5.29, 6.15. 

In your opinion, which of these reasons is at the origin of  this problem: 

a)  Too few staff members performing first level checks 

b)  Staff not adequately qualified or experienced to perform first level checks 

c)  Poor methodology (e.g. checklists), 

d)  Any other reasons (specify which in detail) 

2) The Court recommends that the Commission should encourage audit authorities "to carry out specific system audits concerning ‘first level 
checks’ done by managing authorities and intermediate bodies". (See for example Chapter 5.73, recommendation 4) 

Does your Member State envisage carrying out additional and specific system audits in this area? 

Yes 

   If yes, please provide some details of these specific audits 

No  

  If no, please explain why 

3) The European Court of Auditors found that public procurement procedures constitute an important source of error (Box 3.1, paragraph 4.12, 
paragraph 5.32, Example 6.3 (c).  

What in your opinion contributes the most to these errors?  

-  Complexity of national public procurement rules,     

166

 
 
 
 
-  Complexity of EU public procurement directives, 

- 

insufficient "first level" checks. 

4) The Court identified non-compliance with national rules as one of the risks to regularity of payments. It also provided examples of breaches of 
these rules - (Box4.1, Example 5.2(c), and Example 6.3c). In paragraph 6.30, the Court recommends that the Commission assess whether 
national eligibility rules could be simplified. 

Do you agree that national rules need simplifying? 

Yes 

   if Yes, please give examples 

No  

5) For Chapter 5- Regional policy, Energy and Transport and Chapter 6- Employment and Social Affairs, tripartite meetings with the Court, 
the Commission and Member States are regularly organised. For these chapters, the meetings have proved to be highly successful in avoiding 
contradictions concerning the assessment of errors. In the case of Agriculture and Rural development, only one such meeting was organised in 
2012. 

Would  your  Member  State  be  interested  and  willing  to  participate  in  tripartite  meetings  for  the  Agriculture  and  Rural  development 
chapters? 

Yes 

No  

   if No give reasons 

6) In the chapter "Rural Development, Environment, Fisheries and Health" (§4.32), the Court of Auditors found that the non-respect of the cross-
compliance requirements in three of the six Member States audited did not always lead to the required reductions in payments.  

In your opinion, why has this happened: 

a)  The cross compliance requirements are not sufficiently clear; 

167

 
 
   
 
 
    
 
 
 
 
b)  Your Member State  does not consider the cross-compliance requirements to be enforceable; 
c)  There is an absence of communication between the authority performing the control and the one enforcing the reduction; 
d)  Any other reasons (specify which in detail). 

168

 
 
 
Member States replies to questions in Annex III 
MS 

Q1 
It can be assumed on 
the basis of the audit 
results for projects in 
the 2012 reference 
period under the two 
ESF programmes in 
Austria (error rate 
around 2% in each 
case) that the 
administrative 
authorities’ “first 
level checks” do not 
contain any serious 
weaknesses. The 
results of the system 
checks carried out in 
the past did not 
indicate this either. 
D - Inconsistent 
implementation of 
the provisions at 
delegated 
institutions. 
A/B/C/D - The errors 
established by the 
audit authority in the 
area of the ERDF are 
based on all the 
above-mentioned 
reasons (a-c). With 

Q2 
NO - BMLFUW: No. 
The audit system is 
sufficiently detailed. 
BMASK: No. It can be 
assumed on the basis 
of the audit results for 
projects in the 2012 
reference period under 
the two ESF 
programmes in Austria 
(error rate around 2% 
in each case) that the 
administrative 
authorities’ “first level 
checks” do not contain 
any serious 
weaknesses. The 
results of the system 
checks carried out in 
the past do not indicate 
this either. In addition, 
the ESF audit authority 
also carries out 
“systemic” checks 
when auditing projects.
BKA: In general, key 
element IV 
(appropriate 
administrative checks) 
is verified during the 

Q3 
BMASK: The most 
recent checks (project 
and system checks) by 
the ESF audit authority 
in both ESF programmes 
(2011 reference period) 
did not reveal any 
serious sources of errors 
with regard to public 
procurement procedures. 
A/B/C - BKA: The audit 
authority believes that 
this is a combination of 
the above-mentioned 
points, in connection 
with the fact that the 
contracts had already 
been awarded when the 
first level check took 
place, and the fact that 
the findings with regard 
to proper procurement 
procedures already have 
financial consequences 
for the beneficiary. The 
first level check body is 
therefore often under 
particular pressure. 
There are a few first 
level check bodies that 

Q5 

Q6 

 N/a. 

Q4 
YES - BKA: The 
audit authority 
believes that the 
source of the errors 
should be analysed 
first. Subsequently it 
should be considered 
at which points and to 
what extent the 
national rules should 
be updated. Thus, for 
example, greater 
clarity would be 
created by making a 
distinction according 
to project types. It is 
essential that the rules 
are formulated in such 
a way that they are 
unambiguous and the 
leeway for 
interpretation is not 
too great. This 
measure necessitates 
greater accuracy with 
regard to the agreed 
eligible costs in the 
aid commitment, as 
well as a clear 
agreement on the 

AT 

169

 
 
  
apply the European 
Commission’s guidelines 
for making financial 
corrections in such cases, 
but others do not. 

regard to the other 
reasons (d), past 
experience shows 
that often not enough 
specific criteria are 
laid down when 
checking and 
approving the 
application, which 
then complicates the 
first level checks. 

system check at the 
administrative 
authorities and their 
intermediate bodies. 
However, as a rule 
these checks cannot be 
carried out in 
conjunction with 
checks at the 
beneficiaries, which 
would allow individual 
cost items to be 
assessed and checked. 
The system checks are 
at least carried out at 
the body to be checked 
(first level check 
body). The audit 
authority does not have 
the resources to 
undertake more 
thorough 
complementary spot 
checks at the level of 
the beneficiary. 

proof to be provided. 
The eligibility rules 
can be considered 
only as a general 
framework, while 
concrete information 
is required in the aid 
commitments for the 
individual projects 
supported (not 
everything that is 
eligible in principle 
under the rules must 
also be eligible or 
approved in a 
concrete case). 
However, if 
simplification is 
understood to mean 
that inspection 
activities should be 
reduced or that 
essential steps in the 
inspection process are 
no longer carried out, 
then an amendment to 
the national eligibility 
rules would be 
counterproductive. 

170

 
 
BE 

A - Non, mais dans 
certains services, les 
effectifs sont 
insuffisants pour 
augmenter le nombre 
de contrôles 
D - complexité 
D - Pour la Wallonie, 
la question ne se 
pose pas.  
En effet, pour ce qui 
concerne le contrôle 
de premier niveau, 
nous n’avons pas 
constaté de lacunes 
significatives dans 
les systèmes que 
nous avons audités. 
Les faibles taux 
d’erreur constatés 
dans les campagnes 
de contrôle 
d’opérations au sens 
de l’article 62, §1er, 
b) du règlement 
1083/2006, en 
attestent. 
L’effort de 
centralisation du 
contrôle de premier 
niveau sur pièces 

YES - Cet élément est 
déjà contrôlé 
exhaustivement lors de 
l'évaluation de la 
principale disposition 
n° 4 dans le cadre de 
l'audit de système 
Autorité de Gestion et 
Instance de Médiation. 
Il est pris en compte et 
vérifié le FEDER 
Flandre chaque année. 
En outre, des audits de 
système sont effectués 
pour les questions 
horizontales telles que: 
législation sur les 
marchés publics, 
législation sur les aides 
d'Etat, publicité. Les 
résultats de ces 
évaluations et les 
résultats des audits sur 
les actions concrètes 
permettent d'évaluer 
globalement les 
contrôles de premier 
niveau. S'il s'avère sur 
base des audits sur les 
actions concrètes (AA) 
que les contrôles de 
premier niveau sont 

A - La complexité des 
règles est certainement 
un facteur important 
débouchant sur des 
situations d’erreurs. 
Toutefois, la notion 
même « d’erreur » 
mériterait d’être clarifiée 
dans ce contexte 
spécifique. 
En effet, la 
quantification d’un non 
respect d’une des règles 
prévues par la législation 
sur les marchés publics, 
est parfois malaisée. 
Sur ce point, 
l’orientation utilisée par 
la Commission 
européenne en matière 
de corrections 
financières forfaitaires (« 
Orientations pour la 
détermination des 
corrections financières à 
appliquer aux dépenses 
cofinancées par les fonds 
structurels et le fond de 
cohésion lors du non 
respect des règles en 
matière de marchés 
publics – Document 

YES - Donner et 
utiliser la possibilité 
d’utiliser les coûts 
simplifiés au lieu des 
coûts réels – coût 
forfaitaires + coûts 
unitaires 
• Possibilité d’inclure 
les coûts du personnel
• Assouplir les règles 
des échéances 
d’éligibilité 
• Assouplir le principe 
de concentration 
territoriale 
YES - Diminution de 
la charge 
administrative par 
l’utilisateur 
notamment des coûts 
forfaitaires. 
YES - Introduction de 
simplifications telles 
que taux forfaitaire 
pour les coûts 
indirects (max. 20%), 
barèmes standards et 
forfaits. 
YES - Introduction de 
simplifications telles 
que frais généraux 
forfaitaires, barèmes 

171

A - Les 
exigences d'éco-
conditionnalité 
sont une liste de 
règlements et de 
directives, et de 
conditions pour 
maintenir des 
sols en bonne 
condition 
agriculturale et 
environnemental
e. Il n'est pas 
évident pour les 
autorités 
nationales de 
traduire cela en 
conditions 
concrètes devant 
être respectées 
par les 
bénéficiaires.  
D - La manière 
de calculer les 
réductions/sancti
ons est très 
complexe. 

 
 
 
  
dans le contexte des 
programmes 
cofinancés par le 
FEDER en Région 
wallonne, permet de 
spécialiser les 
ressources 
dédicacées à la 
vérification ; cet 
effort a certainement 
conduit à une 
amélioration du 
contrôle de premier 
niveau et doit être 
renseigné à titre de 
bonne pratique. 

insuffisants, il est 
possible, grâce à la 
flexibilité dans le 
planning de l'AA, de 
prendre presque 
immédiatement la 
décision d'étendre le 
contrôle de système de 
la principale 
disposition n° 4. 
NO - Pour la Wallonie, 
la réponse est non 
parce que ces audits 
ont déjà été effectués, 
pour l’essentiel. 
En effet, pour ce qui 
concerne les 
programmes 
opérationnels 
cofinancés par le 
FEDER et le FSE en 
région wallonne et 
communauté française, 
les vérifications de 
premier niveau sur 
pièces ont fait l’objet 
d’audits de système 
spécifiques au cours 
des années 2010 à 
2012 et ce 
conformément aux 
stratégies d’audit 

COCOF 07/0037/03-FR-
version finale du 
29/11/2007) et dont 
l’utilisation est fortement 
recommandée aux Etats 
membres, est parfois 
malaisée à appliquer 
sachant que les objectifs 
de cette orientation 
hésitent entre d’une part 
sanction d’un 
comportement irrégulier 
et d’autre part 
quantification d’un 
préjudice potentiel pour 
le budget de l’Union 
européenne. 
Nous comprenons que la 
Cour des comptes 
européenne quant à elle, 
peut adopter une autre 
approche (voir sur ce 
point, Rapport DAS 
2011, Page 344, Annexe 
1.1. « Approche et 
méthodologie d’audit », 
point 11). 
Une révision de la note 
d’orientation de la 
Commission de même 
que des efforts de 
formation sur 

standards et forfaits / 
simplification de 
pièces justificatives 
pour les coûts de 
personnel / traitement 
simplifié des recettes. 
YES - Les modalités 
2014-2021 vont dans 
le bon sens mais il 
faut à tout prix la 
même lecture des 
règlements de la part 
des différentes 
autorités (gestion, 
certification, audit) en 
et y compris la CCE 
et la CCEur.  
NO - La question est 
quelque peu ambigüe.
Si les règles sont 
définies au niveau 
national, il 
n’appartient plus à la 
Commission de les 
simplifier. 
Pour le surplus, en 
gardant à l’esprit que 
dans le cadre de la 
programmation 2007-
2013, les règles 
d’éligibilité sont 
essentiellement 

172

 
 
l’application de celle-ci 
(formations dispensées 
par la Commission), 
faciliteraient l’exercice 
du contrôle par les 
acteurs concernés dans 
les Etats membres. 
A - : la problématique 
rencontrée par nos 
opérateurs n’est pas la 
complexité du système 
européen mais bien celui 
du droit belge qui, 
souvent est sujet à de la 
jurisprudence. Le fait de 
cumuler tous les 
montants sur plusieurs 
années crée également 
des confusions dans les 
différents modes de 
passation de marché. 

déposées auprès de la 
Commission 
européenne et 
approuvées par celle-ci 
en 2008 et 2009. 
Pour le surplus, 
l’Autorité d’audit 
continue à exécuter le 
planning pluriannuel 
de ses audits 
conformément aux 
stratégies précitées. 
Le point précis sur 
l’état d’avancement de 
la programmation des 
audits, est fait 
systématiquement 
chaque année dans le 
rapport annuel de 
contrôle et lors de la 
rencontre bilatérale 
annuelle entre les 
autorités d’audit 
œuvrant au niveau 
belge et la 
Commission 
européenne.  
NO - Le programme 
d’audit de système 
couvre à ce jour, les 
différents types de 
risques : dentifiés. En 

définies par les Etats 
membres eux-mêmes 
(article 56, §4 du 
règlement 1083/206 « 
Les règles d’éligibilité 
des dépenses sont 
établies au niveau 
national, sous réserve 
des exceptions 
prévues dans les 
règlements 
spécifiques à chaque 
Fonds »), nous 
n’avons pas 
d’exemples 
spécifiques 
concernant les 
possibilités de 
simplification. 
De manière générale, 
les autorités de 
gestion sont attentives 
aux possibilités 
laissées par les 
règlements et 
orientations définis au 
niveau européen, en 
ce qui concerne le 
recours aux coûts 
forfaitaires (cf 
orientation de la 
Commission sur « les 

173

 
 
outre, l’A.A. de la 
R.C.C. ne contrôle que 
de petits programmes. 

coûts indirects 
déclarés sur la base 
d’un taux forfaitaire, 
les coûts à taux 
forfaitaire calculés au 
moyen de 
l’application de 
barèmes standards de 
coûts unitaires ou les 
montants forfaitaires 
»). 
Le recours à ces 
dispositions permet de 
faciliter la mise en 
œuvre des projets et 
leur contrôle, et par 
conséquent a un 
impact sur le taux 
d’erreur.   

174

 
 
BG 

NO - In accordance 
with the audit 
strategies for the 
operational 
programmes for which 
the Audit of European 
Union Funds 
Directorate is the 
Audit Authority, it 
performs annual 
systems audits, 
selecting the key 
requirements to be 
audited on the basis of 
an assessment of the 
risk. The first level 
checks recommended 
by the ECA are part of 
Key Requirement 4 – 
‘Management 
verification’ for the 
operational 
programmes’  
management and 
control systems. Since 
the risk for this key 
requirement in 2012 
has been assessed as 
high, the Audit of 
European Union Funds 
Directorate is currently 
carrying out a 

A/B - We share the 
conclusion that public 
procurement procedures 
are the main source of 
errors. We believe this is 
due to the complexity of 
national public 
procurement rules. 

YES - Audits on the 
operational 
programmes have 
found the eligibility 
rules to be 
increasingly complex. 
A horizontal audit on 
simplifying structural 
fund rules is now 
under way and the 
results will be 
presented at the start 
of 2013. 

175

 
 
  
  
  
scheduled audit of the 
systems covered by 
this key requirement. 
The systems audits 
will be completed at 
the start of 2013. We 
therefore see no need 
for an additional audit. 

With regard to the 
Structural Funds, in 
the framework of 
systems audits 
conducted in the 
Managing Authority 
and the intermediate 
bodies as part of the 
assessment of key 
requirement No 4 
‘Adequate 
management 
verifications’ of the 
Management and 
Control System, 
Cyprus is examining 
the following, as 
provided for in the 
Commission's 
Guidance Document 
on a common 
methodology for the 
assessment of 
management and 

With regard to the 
Structural Funds, the 
position of the 
Internal Audit Service 
is that any 
simplification helps 
better understanding 
on the part of 
beneficiaries so that 
they can follow the 
rules and facilitates 
the procedures for 
verifications and 
checks. 
Therefore we believe 
the rules could be 
simplified. The 
Managing Authority, 
being the competent 
authority for the 
establishment of 
national eligibility 
rules, should consider 
this matter. 

YES - 
Although the 
Internal Audit 
Service does 
not act as 
Supervisory 
Authority for 
these 
programmes, 
nevertheless 
it would be 
good if 
CAPO as the 
responsible 
body in 
Cyprus 
participated 
in such 
tripartite 
meetings. 

A - This relates 
to point 4.32 of 
the Report and 
does not apply to 
Cyprus, as the 
three Member 
States where the 
problems were 
identified are 
Italy 
(Lombardy), 
Hungary and 
Finland. 

The position of the 
Internal Audit Service is 
that the reasons listed in 
the questionnaire 
contribute little to errors.  

176

CY 

 
 
  
For example there 
could be a 
simplification of the 
eligibility rules of 
indirect costs 
(overheads) by 
claiming a percentage 
of total direct costs. 
This does not apply to 
CAPO. 

control systems in the 
Member States (2007-
2013 programming 
period) [COCOF 
08/0019]: 
• the existence of a 
written procedure in 
relation to the conduct 
of verifications (first-
level checks),  
• whether 
administrative 
verifications are 
completed before 
certification, 
• whether all 
applications for 
payment are subject to 
administrative 
verifications, 
• whether on-the-spot 
verifications are 
undertaken when the 
project is well under 
way, 
• whether evidence is 
kept, 
• whether on-the-spot 
verifications are based 
on adequate risk, 
• whether there are 
assessment procedures 

177

 
 
to ensure that the CA 
receives all 
information. 
This does not apply to 
CAPO. 

CZ 

D - • the difference 
between the ECA 
and the MS in how 
corrections are 
applied (the EC does 
not take COCOF 
specifics into account 
in the AR)• the ECA 
audit does not take 
national legislation 
into consideration• 
the ECA audit 
ignores the time 
aspect involved – 
assessment of 
deficiencies found by 
the ECA in 2012 
using knowledge 

YES - In 2011, the EC 
(DG REGIO) ordered 
(at the 2011 
Coordination Meeting 
in Brussels) the 
performance of a 
single systems audit in 
relation to all FBs 1-7 
for MAs/IBs, and to do 
so for all entities. As at 
30.6.2012 the Czech 
Republic had 
performed this for all 
the OPs (ERDF). 

None of the options 
above is the main cause 
of these errors. The main 
cause of these errors is 
the ambiguous wording 
of the directives 
regulating public 
procurement and the 
associated different 
perspective of 
contracting authorities 
on these provisions. 
Contracting authorities 
usually apply these 
general and ambiguous 
provisions in a different 
manner to how these 
provisions are 

NO - The ECA’s 
Annual Report does 
not indicate that the 
declaration of 
ineligible 
expenditures is a 
direct result of the 
complexity of the 
national rules. The 
Ministry for Regional 
Development-
National Coordination 
Authority (MRD-
NCA) has prepared a 
set of Rules for the 
Eligibility of 
Expenditures for OPs 
2007-2013, as well as 

178

Does not apply 
to the Czech 
Republic - we 
cannot make an 
assessment. 

 
 
  
existing in 2012 in 
relation to projects 
submitted and 
implemented in the 
years 2008-2009 

interpreted by the Court, 
and the Court performs 
its audits ex-
post.Contracting 
authorities can take the 
Court’s findings into 
account in the case of 
contracts awarded in the 
future, but cannot apply 
them to contracts already 
awarded. In its findings, 
the Court often argues on 
the basis of an 
infringement of basic 
principles. However, the 
basic principles of public 
procurement have no 
universal interpretation 
which could 
automatically be applied 
to every public contract, 
and so different 
individuals may 
justifiably have different 
opinions precisely in 
regard to the question of 
compliance with these 
basic principles, or the 
degree of their potential 
infringement.In some 
cases, the procedure of 
contracting authorities is 

a methodological 
guide to the eligibility 
of expenditures, 
which sets out a basic 
set of rules and 
general principles for 
determining 
expenditures eligible 
for co-financing from 
SFs and the CF. 
Grantors of aid then 
further elaborate these 
rules into the form of 
binding rules for the 
aid beneficiaries, and 
thus set specific limits 
for each type of 
expenditure directly in 
the decision on the 
granting of the aid. 
This procedure 
directly ensures that 
the aid beneficiaries 
are provided with the 
relevant 
information.Inaccurat
e or incorrect 
declaration of 
expenditures results 
from failures to 
comply with the 
conditions of 

179

 
 
indeed calculated, and 
their aim is to disregard 
these principles. 
However, this type of 
procedure only occurs in 
a minimal number of 
cases. 

decisions on the 
granting of aid, not 
from the complexity 
of the national 
methodological 
regulations. The 
centrally specified 
framework of rules on 
the eligibility of 
expenditures reflects 
the requirements for 
clear, comprehensible 
and simple rules to the 
greatest possible 
extent, and there is 
only very limited 
scope for their further 
simplification. 

180

 
 
DK 

C - Re point 4.26 in 
Chapter 4: 
Development of rural 
areas, the 
environment, 
fisheries and health 
The Payment Body 
had a poor method. 
Despite an 
instruction 
concerning 
reasonable prices, 
this was not 
exhaustive or 
updated. Checklist 
questions in the IT 
system have not been 
specifically 
elaborated, but are 
now being 
formulated. In 
accordance with 
Article 24(2)(d) of 
the Control 
Regulation 
(65/2011), the 
Payment Body has 
chosen to adopt 
comparison of 
various tenders as a 
general evaluation 
system. 

YES - In relation to 
rural areas 
In 2012, the Internal 
Audit Unit within the 
Danish AgriFish 
Agency chose to 
conduct a systems-
based audit of LAG 
schemes under the 
Rural Areas 
Programme. The audit 
focuses on follow-up 
of the audit comments 
that the Commission, 
the Court of Auditors, 
the Approval Body and 
the Internal Audit Unit 
itself made in 2011 
and 2012. Because 
there are still 
significant problems, 
the Internal Audit Unit 
will in 2013 also 
conduct a follow-up 
systems-based audit in 
this area. 

In relation to structural 
funds 
The Danish Business 
Authority’s audit 
authority has, with 

YES - In relation to 
rural areas 
The Danish AgriFish 
Agency welcomes 
simplifications at both 
national and EU level. 
The Danish AgriFish 
Agency is currently 
preparing the design 
of a new rural areas 
programme for 2014-
2020. This will 
include a review of 
the rules governing, 
for example, 
ecological support and 
the care of grassed 
areas 
(environmentally 
friendly agriculture) 
compared with 
administrative 
experience from the 
current programme. 
The Agency will try 
to incorporate this 
experience in the new 
programme with a 
view to promoting the 
greatest possible 
simplification for 
users/support 

A/B/C - The complexity 
of national regulations 
and EU Directives 
relating to public calls 
for tender makes it 
difficult to implement 
the verification and often 
leads to a risk of 
inadequate verification at 
the “first level”. 

181

The Danish 
authorities have 
cut support for 
all cross-
compliance 
infringements 
that the 
authorities 
identified during 
the Court of 
Auditors’ visits 
in 2011. It is also 
apparent from 
the Court of 
Auditors’ report 
(point 4.32) that 
the missing 
payment 
reduction for 
infringement of 
the cross-
compliance 
requirements 
concerns Italy 
(Lombardy), 
Hungary and 
Finland. 

 
 
 
  
In specific terms, this 
means that the EU 
provision is based on 
a requirement for, as 
a rule, two tenders to 
be submitted together 
with applications for 
subsidy. The 
Payment Body has 
nevertheless at the 
same time laid down 
de minimis 
thresholds for costs 
for movable property 
and for costs for 
building and 
construction tasks 
and for services.  
The rules are set out 
in guidance and 
instructions. The 
Agency assesses 
costs under the de 
minimis thresholds 
on the basis of 
reference costs such 
as list prices, etc. 

regard to the Regional 
Fund (ERDF – both 
national programmes 
and Interreg 
initiatives) and the 
Social Fund (ESF), 
conducted systems-
based audits of the 
parties implementing 
programmes; these 
include certification 
and administrative 
authorities, including 
first-level checks. As 
part of the auditing of 
operations (projects), 
auditing of the 
effectiveness of the 
first-level verification 
work is also performed 
on the basis of random 
samples. The audit 
results are discussed 
continuously with the 
certification and 
administrative 
authority to assess the 
effectiveness of the 
first-level verification. 
The administrative 
authority also holds 
meetings with the unit 

recipients. 

In relation to 
structural funds 
The parties 
implementing 
programmes for the 
ERDF and the ESF 
consider that the rules 
should be made as 
simple as possible. 
Work is going on all 
the time to simplify 
the rules. 

The parties 
implementing 
programmes for the 
ERDF and the ESF 
hope that information 
meetings can prevent, 
for example, errors in 
hourly records and the 
calculation of wages 
and salaries. 
Individual 
information meetings 
are now held for all 
support recipients, 
whereas previously 
general information 
meetings on the rules 

182

 
 
 
 
that performs the first-
level verification, in 
which observations 
and results are 
discussed. 

for the structural 
funds used to be held. 

EST 

183

 
 
  
  
  
  
  
  
FIN 

B - • The turnover of 
personnel may cause 
shortages of 
competence, 
particularly when the 
programming period 
changes to the next 
one. 
D - • The main 
factors behind the 
deficiencies in basic 
level inspections 
include the complex 
eligibility rules 
associated with many 
aid systems and the 
challenges associated 
with the application 
of rules concerning 
public sector 
procurement. The 
managing authority 
has issued common 
instructions and 
checklists for the 
basic level 
inspections of 
Finnish ERDF and 
ESF programmes. 
The checklists cover 
compliance with the 
key eligibility criteria 

YES - • The Agency 
for Rural Affairs 
implements in all ELY 
Centres inspections of 
the administration and 
control system for the 
purpose of analysing 
the functioning and 
practices of the system 
in all actions. Each 
ELY Centre is 
inspected during the 
programming period, 
and the inspections 
seek to ensure that 
more uniform practices 
are adopted throughout 
the country. 

YES - • The national 
procedures can be 
simplified by 
harmonising the 
national eligibility 
rules and by 
introducing simplified 
cost models as widely 
as possible.  
• For example, 
presenting the receipts 
at the time of 
submitting the aid 
payment application is 
a cumbersome 
procedure for both the 
beneficiary and the 
administration. A less 
onerous procedure 
would improve 
compliance with rules 
in this respect.  

184

 
 
  
  
  
• It would be possible 
to reduce further the 
ambiguity of both the 
regulations and the 
instructions. A 
simpler method, clear 
instructions and 
sufficient training 
would surely make 
the basic level 
inspections more 
efficient than now. 

D - Complexification 
croissante de la 
réglementation 
communautaire 
(multiplication des 
objectifs de contrôle 
et des articles dans 
les règlements ad 
hoc) ce qui aboutit à 
un transfert de la 
charge de contrôle 
par la Commission 
vers les Etats 
membres. 

FR 

NO - La méthodologie 
développée (par la 
Commission 
européenne) pour les 
audits de système 
couvre déjà les 
contrôles de premier 
niveau. 

A/B/C - L’ensemble 
combiné des trois causes 
peut-être considéré 
comme une cause des 
erreurs identifiées, 
sachant que l’application 
des règles de marchés 
publics soulève souvent 
des questions en 
opportunité et/ou 
d’interprétation juridique 
plus que d’audit 
strictement dit.  

NO - La 
réglementation pour la 
période 2007-2013 
prévoit que les règles 
nationales d’éligibilité 
soient fixées au 
niveau des Etats 
membres (compétence 
propre). Par ailleurs, il 
faut cependant noter 
que  la Commission a 
déjà, dans le cadre de 
l’article 7 du 
règlement 1080/2007, 
fixé un cadre très 
simple pour les  règles 
d’éligibilité. 

185

 
 
  
  
DE 

NO - The Court’s 
recommendation is 
rejected. Audits of the 
functioning of first 
level checks are 
already an integral part 
of systems audits. 
Specific risk areas can 
be checked separately 
by means of 
horizontal/thematic 
(partial-)systems 
audits.See also:• 
Guidelines for a 
uniform method for the 
evaluation of 
management and 
control systems in the 
Member States (see 
Key Requirement 4: 
‘Adequate 
management 
verifications’).• The 
Commission’s answers 
to the Court's 
observations, OJ C 344 
of 12 November 2012, 
p.144 

A/B/C - For the ERDF, 
the following specific 
sources of error were 
flagged up:- Use of rules 
which are designed for 
private management use, 
particularly when it 
comes to selecting the 
type of tender procedure 
to be used- Use of the 
rules by management in 
such a way as to favour 
certain private bidders 
seeking to win the 
contracts, but who are 
not familiar with open 
tender procedure rules, 
e.g. by publishing the 
tender notices in 
procurement journals, 
while the market waits 
for a direct request for 
bids   - Requirements set 
in stone regarding the 
provision of statements 
and evidence that 
conditions are met for 
exercising discretion in 
selecting alternatives, 
taking account of the 
rules on public 
procurement. Instead of 

YES - For the ERDF, 
it has been pointed out 
on numerous 
occasions that the 
overly complex EU 
rules need to be 
simplified as a matter 
of priority. Individual 
national examples 
have been provided 
on numerous 
occasions, showing 
that the partly 
complex national 
provisions stem from 
the relevant EU 
provisions, which 
need to be 
simplified.The 
following individual 
examples were 
provided as examples 
of rules that need to 
be simplified: • More 
extensive possibilities 
for the use of flat rates 
or dispensing with the 
need to provide 
timesheets, or 
simplification of flat 
rates for overheads, 
which, however, if 

186

A/B/C/D - 
Germany was 
not among the 
Member States 
affected by the 
above. 

 
 
  
  
a plausible and feasible 
result, the outcome is the 
subjective opinion of 
someone without expert 
knowledge. The choice 
of tender procedure is no 
longer linked to the 
purpose of the contract 
and the efficiency of the 
procedure, but only to 
the avoidance of the risk 
of losing funds through a 
lack of expertise during 
the selection 
procedures.- Failure to 
recognise typical 
circumstances as 
sufficient grounds in 
comprehensive 
procurement procedures    
- Unclearly worded 
rules: national rules used 
by the selection and 
award bodies are drafted 
with the help of private 
associations and contain 
in the award notice 
unclear award criteria 
which should only be 
used in isolated cases 
and do not necessarily 
correspond to the 

simplification is to be 
achieved, should not 
be audited afterwards 
by the EU and classed 
as ineligible. (Both of 
the above are only 
possible if the 
corresponding 
provisions at 
European level are 
simplified).• Complex 
rules governing 
eligibility and too 
many conditions in 
connection with the 
approval of grants.• 
Avoidance of multiple 
audits, at considerable 
administrative 
expense, and which 
do not lead to a 
significant rise in 
audit certainty. The 
greatest potential for 
simplification lies in 
the EU 
rules.Simplification of 
the relevant EU rules 
in the area of the 
EAFRD is also 
fundamental. 
Germany has put 

187

 
 
forward a whole range 
of concrete proposals. 

situations of private 
bidders; the EU rules are 
not always properly 
translated- There are no 
remedial measures in 
place to deal with 
apparent or real 
procedural errors, such 
as national fiscal rules, 
which could allow 
procedural errors to be 
dealt with on the basis of 
market accessibility, 
non-discrimination and 
transparency, thereby 
instigating weaknesses in 
the drafting of the 
procurement rules- 
Interpretation of the 
remedies for procedural 
errors are held to be 
unlawful with collusion 
taking place, enabling 
certain bidders to gain a 
competitive advantage - 
Assumption that the 
results of secondary 
controls are accurate- 
Failure to allow different 
types of tender 
procedure, irrespective 
of the contractual value, 

188

 
 
where notification of 
competition is given, in 
line with Directive 
2004/17/EC.In the case 
of the ESF, it was 
pointed out that the 
control authorities 
systematically verify the 
regularity of the public 
procurement procedure 
as well as compliance 
with the national legal 
provisions in place to 
guarantee the regularity 
of the expenditure 
declarations submitted to 
the Commission. The 
Commission is informed 
of these results in the 
Annual Control Reports. 
A system check is 
currently in place in 
respect of the open 
tender procedure but it 
has not yet been finalised 
and so the results and 
analyses are not yet 
available. 

189

 
 
GR 

D - The reasons are 
complex and mostly 
depend on who 
performs the first 
level check. First 
level checks are 
performed either by 
Administrative 
Authorities or 
intermediate bodies 
authorized to that end 
and which have a 
different form. Hence 
the first 3 reasons 
combine depending 
on the body 
conducting the 
check. 

Under the approved 
management and 
control system 
(MCS), first level 
checks (the 
verifications under 
Article 13 of 
Regulation (EC) No 
1828/2006) are 
performed by the 
managing authorities 
(Managing 
Authorities and 

YES - The control 
manual of the 
Financial Control 
Commission (EDEL) 
posted on www.edel.gr 
(Audit Activities - 
Control Strategy and 
EDEL Control 
Manual) for the 
programming period 
2007-2013 provides in 
Section B.4 "Special 
System Checks" for 
the performance of 
special system checks 
aimed at investigating 
high-risk horizontal 
issues. One of these 
horizontal issues 
concerns the 
fundamental 
requirements 
(procedures) for the 
operation of the 
(common) 
management and 
control system, 
including management 
verifications. 
In pursuance of the 
above, special system 
checks were designed 

YES - National laws 
must be unified and 
there must not be two 
or more laws in force 
regarding the 
implementation of the 
same operation (e.g. 
Law 3614, Law on 
Municipalities and 
Communities – 
Kallikratis, etc.). 
National eligibility 
rules establish the 
expenditure co-
funding rules. 
However, they come 
to supplement the 
national rules under 
which the projects are 
implemented. Most of 
the problems 
encountered in terms 
of compliance with 
national eligibility 
rules are due to the 
fact of having many 
different legal 
frameworks for the 
implementation of an 
operation depending 
on the type of the 
beneficiary who 

190

 
 
 
  
  
  
implements the 
project and/or of the 
operation 
implementation time. 
The fact that the 
national institutional 
framework for 
implementation varies 
frequently but also 
due to different 
sources, leads to 
uncertainty as to the 
applicable provisions 
but also to errors 
because different 
provisions on the 
same issue may serve 
different purposes 
and, therefore, their 
implementation is a 
matter of 
interpretation.  

Intermediate 
Managing Bodies) 
administratively on 
each expenditure 
statement of the 
beneficiary and on-
the-spot on 
operations selected 
on the basis of a 
documented 
sampling method.  
To perform both 
administrative and 
on-the-spot 
verifications, the 
MCS requires the use 
of standard check 
lists which must be 
filled in by the 
officers conducting 
the verifications and 
are signed in order to 
substantively 
document the 
verification.  

As regards 
administrative 
verifications, 
weaknesses can be 
observed in cases of 
projects involving a 

for the audit period 
1/7/2009-30/6/2010. 
For the seven bodies 
checked in terms of 
individual criteria of 
evaluation of this 
fundamental 
requirement, it was 
found that they work 
well with a need for 
only minor 
improvements relating 
—as appropriate— to 
training, compliance 
with and 
implementation of the 
program of on-the-spot 
inspections, failure to 
develop sampling or 
document sampling 
methodology. The 
response of the bodies 
to the 
recommendations of 
the checks was 
satisfactory. 
The above are 
mentioned in EDEL's 
2010 the Annual 
Control Report. 

191

 
 
  
particularly large 
number of expenses 
to be verified and, 
therefore, of 
supporting 
documents to be 
reviewed. Typically, 
these projects are 
implemented by 
means of grants. The 
problem is 
exacerbated by the 
wide diversity of 
both co-funded 
actions implemented 
by means of grants 
and beneficiaries 
who implement them 
under the existing 
national framework 
applicable to them.  
As for on-the-spot 
verifications, 
weaknesses may, in 
individual cases, be 
due to variation in 
the number of staff 
members of the 
competent unit in 
charge of carrying 
out on-the-spot 
verifications during 

192

 
 
the programming 
period. This 
combined with the 
great diversity in the 
national framework 
under which projects 
are implemented 
within an OP does 
not allow, in some 
cases, the timely 
implementation of 
the annual program 
of on-the-spot 
verifications.  
Furthermore, and 
based on the fact that 
in accordance with 
the approved MCS, 
on-the-spot 
verifications are 
performed on 
operations for which 
the managing body 
has already verified 
the expenditure 
administratively and 
at a time that may 
follow their 
certification at the 
Commission, 
external audits of the 
certified expenditure 

193

 
 
at the Commission 
may identify errors 
which are corrected 
by the Member State 
at a later time. 
           The above 
suggests the 
importance of the 
role of administrative 
verifications which 
due to the volume of 
work they require 
and their frequency 
should be given 
special attention with 
a view to simplify 
and systematize them 
to achieve their goal 
at an acceptable cost-
benefit ratio and 
without repeating the 
procedures followed 
at the level of the 
beneficiary. This is 
considered an issue 
of particular 
importance for 
projects implemented 
by means of grants. 

194

 
 
HU 

IRL 

D - in previous years, 
the shortcomings of 
first-level checks 
were mostly 
attributable to 
compliance checks of 
public procurements; 
however, the audit 
system has been 
improved in this 
regard since 2011. 

YES  - based on risk 
analysis and taking 
into account the 
European 
Commission’s 
recommendations. 

D - In Ireland’s 
experience several 
findings of 
weaknesses in 
national first level 
verifications have 
arisen from a lack of 
familiarity by 
contracted 
Commission auditors 
with public 
administration and 
financial 

NO - For the 2007-13 
period our Audit 
Authority continues to 
roll out our programme 
of systems audits on 
MA/IB Key 
Requirement No 4 
'Adequate 
Management 
Verifications' to all 
interventions 
that declare 
expenditure in the 

A - bearing in mind that 
the audit results are 
based on procedures 
launched under the 
previous Public 
Procurement Act 
C- (Since 8 December 
2010, a centralised 
public procurement audit 
system has been in 
operation at the National 
Development Agency, 
which has helped us 
achieve significant 
progress in the 
supervision of public 
procurement. For more 
detail, see reply to 
Heading 1 of Annex I.) 
B - One of the main 
reasons for a high error 
rate finding in respect of 
public procurement is a 
very narrow 
interpretation of 
procurement rules being 
taken by Commission 
Auditors. Furthermore, 
arising from recent audit 
findings, contract 
compliance issues are 
being treated as 

195

YES - introduce 
simplified accounting 
in practice; introduce 
claims based on an 
average rate. 

YES - There may be 
scope for greater 
simplification and 
clarity. This issue is 
related to the 
interpretation of EU 
procurement rules, as 
noted in the response 
to Question 3 above, 
along with the 
translating of those 
EU rules into national 
rules and the 

YES - Yes in 
principle and 
depending on 
the frequency 
and the level 
of 
administrativ
e burden that 
such tripartite 
meetings 
would 
engender.     

D - There are a 
number of 
possible reasons. 
  Member states 
may consider 
certain breaches 
as minor leading 
to no reduction. 
Eligibility and 
GAEC issues are 
interlinked. 
Breakdown in 
communication 

 
 
  
  
management 
procedures. 

IT 

2007/13 programming 
period and updates on 
the progress made to 
date on these audits is 
included at Appendix 5 
of the respective 
Annual Control 
Reports. 

We are not answering 
this question as the 
recommendation 
quoted concerns 
regional policy, energy 
and transport. 
Furthermore, it does 
not seem to us that any 
similar 
recommendations have 
been made concerning 
the agricultural Funds 
(cf. Chapters 3.45 and 
4.54). 

procurement compliance 
issues, even though they 
are quite distinct. 

application of those 
rules to EU funded 
projects.  

between the 
specialised body 
and the paying 
agency 

THIS CONCERNS 
NATIONAL LEVEL 

D -  there is 
evidence that the 
interpretation of 
the Regulations 
give rise to the 
possibility to 
remedy minor 
defaults through 
the 
implementation 
of appropriate 
corrective 
measures 

196

 
 
  
  
 
LV 

D - Comments 
relating to regional 
policy, energy and 
transport, and also 
employment and 
social affairs: 

We are of the 
opinion that the main 
reason for the 
weaknesses in first-
level checks is the 
complex nature of 
the legislation and 
the rules for its 
implementation, 
which allow various 
interpretations; we 
also believe that in 
certain cases an 
insufficient level of 
detail is provided 
regarding first-level 
checks. 
Comments relating to 
agricultural and rural 
development: 
The basic principles 
for the 
implementation of 
aid measures laid 
down in the relevant 

YES - Comments 
relating to regional 
policy, energy and 
transport, and also 
employment and social 
affairs: 
Management and 
control system audits 
are performed in all 
bodies concerned; all 
of the basic 
requirements and basic 
criteria which are 
binding on a specific 
body are evaluated on 
the basis of the 
COCOF 08/0019/00-
EN guidelines  issued 
by the Commission. 
As a result, first-level 
checks are audited 
annually in all of the 
bodies which 
administer EU funds. 
In addition, the Audit 
Authority has 
identified areas which 
come under the scope 
of first-level checks 
and which are subject 
to horizontal audits in 
all EU fund bodies, for 

YES - Comments 
relating to agricultural 
and rural 
development: 
Simplification needs 
to be carried out in 
order to reduce the 
administrative burden; 
however, potential 
risks to the 
administration of EU 
fund payments must 
also be evaluated.  
Examples: 
- more efficient 
cooperation between 
national authorities, 
including the 
interconnectivity of IT 
systems; 
- operation of the 
project application 
administration system 
– joint in situ 
inspections, legal 
aspects of the 
commitment of funds, 
the use of accessible 
IT systems for the 
submission of project 
applications and 
reports/reviews, and 

197

A - The Latvian 
authorities are of 
the opinion that 
the basic 
principles laid 
down in the 
relevant external 
legislation 
(regulations) for 
determining 
cross-
compliance 
requirements are 
not clearly 
defined and are 
general in 
nature; as a 
result, Member 
States can 
interpret and 
implement these 
provisions in 
various different 
ways.  

 
 
 
  
  
for communication, 
etc. 

example; 
1) public procurement;
2) commercial aid; 
3) publicity 
requirements; 
4) equal opportunities; 
5) environmental 
protection 
requirements; 
6) and others. 

external legislation 
(regulations) are not 
clearly defined and 
are general in nature; 
as a result, Member 
States can interpret 
these provisions in 
various ways (e.g. 
with regard to 
determining the 
eligible costs which 
are possible under a 
project); 
First-level checks 
(administrative 
assessment) are 
performed in 
accordance with the 
principles/procedures 
laid down by the 
Managing Authority 
and the Paying 
Agency for each aid 
measure or group of 
measures; however, a 
wide range of project 
applications are 
received for each aid 
measure (various 
different types of 
activity, categories of 
expenditure etc.), and 

198

 
 
each project 
application must be 
evaluated separately 
and in detail (it is not 
possible to create a 
separate 
administrative 
procedure for each 
specific project, and 
so a human factor 
exists in the 
application of these 
provisions). 

199

 
 
LITH 

YES - The Lithuanian 
audit institution notes 
that specific system 
audits related to the 
initial inspections 
carried out by 
managing and 
intermediary 
institutions in 
Lithuania are 
performed annually (as 
part of the MCS 
performance audit 
during the respective 
reporting period taking 
account of the level of 
materiality and the 
level of audit 
reliability laid down in 
the Audit Strategy 
(where the audit 
sample depends on the 
inherent reliability of 
the audited MCS 
institution, its internal 
control and self-
reliability). 

A/B/C - Non-compliance 
due to the failure to 
observe the formal 
provision of the 
Directive having no 
impact on the 
procurement outcome 
and application (non-
application) of the 
financial correction 
should not be taken into 
consideration when 
analysing the issue of 
eligibility of costs 

200

YES - With a view to 
reducing the 
administrative burden 
on contracting 
authorities, the public 
procurement 
procedure is 
simplified. The 
requirement to the 
contracting authority 
to publish technical 
specifications of all 
procurement 
procedures has been 
eliminated, and only 
the technical 
specifications of 
procurement 
procedures of large 
scope and importance 
are subject to 
publication. Another 
change is the 
elimination of the 
requirement to publish 
suppliers’ proposals in 
the Central Public 
Procurement 
Information System if 
they are of a very 
large volume and 
contain technical 

 
 
  
  
  
drawings, charts, etc. 
Given that the 
supplier’s proposal 
used to be rejected for 
the sole reason of 
inaccurate or 
ineffective wording of 
the supplier’s 
declaration, now the 
supplier’s declaration 
is evaluated when 
verifying the 
supplier’s 
qualification. The 
time limits for 
analysing claims have 
also been extended. 
To reduce the 
administrative burden 
on projects and with a 
view to ensuring more 
efficient 
administration of 
funds, action was 
taken to overcome the 
lack of current assets 
of project 
implementers, there is 
no longer a 
requirement to submit 
certified copies of 
documents, the 

201

 
 
application of fixed 
unit rates of project 
costs and fixed 
amounts of project 
costs has been 
introduced. The rules 
for establishing and 
paying indirect project 
costs on the basis of a 
uniform rate have 
been drafted and are 
already successfully 
used by the ESFA. 
These rules stipulate 
the procedure for 
establishing and 
paying indirect, or 
overhead, costs of 
projects implemented 
under the operational 
programme on the 
development of 
human resources and 
co-financed by the 
European Social Fund 
using a uniform rate. 
The provision that 
advance payment can 
be made without the 
supplier submitting an 
advance payment 
invoice and the 

202

 
 
provision that eligible 
advance payments are 
the ones identified in 
legal acts (e.g. 
students’ 
scholarships) has been 
supplemented. 

LUX 

D - L’appréciation du 
caractère raisonnable 
des dépenses ne se 
limite pas dans 
certains cas à une 
analyse quantitative 
eu égard aux 
objectifs fixées dans 
la fiche de 
candidature et 
nécessite une 
compétence 
technique spécifique, 
notamment pour les 

YES - L’audit interne 
fait des contrôles 
spécifiques des 
différents régimes 
agricoles selon un plan 
triennal établi sur base 
d’une analyse des 
risques potentiels.  
NO - L’AA ne 
comprend pas cette 
recommandation. La 
qualité des contrôles 
de premier niveau est 
constatée chaque 

A/B/C - Les 3 éléments 
peuvent jouer, la 
complexité joue surtout 
au niveau des porteurs de 
projets qui ne sont pas, 
en général, des 
spécialistes en marchés 
publics. 
B - ces directives 
transposées en 
législation nationale 
contribuent ensuite à la 
complexité des règles 
nationales en la matière 

YES - Les règles 
nationales pourront 
toujours être 
simplifiées mais un 
travail initial de 
simplification au 
niveau des règles 
prévues dans les 
directives serait 
appréciable. 
NO - Dans les 
exemples donnés, les 
règles paraissent 
claires 

203

 
 
  
  
année à travers les 
contrôles d’opération. 
Des constats et des 
recommandation sont 
faites par l’AA. Un 
suivi est également 
effectué par l’AA. 

projets de recherche. 
Par ailleurs, il ne faut 
pas perdre de vue 
qu’il s’agit dans ce 
cas d’une obligation 
de moyen et 
l’absence d’atteinte 
de résultat 
significatif ne 
signifie pas 
forcément que les 
dépenses ont un 
caractère 
déraisonnable. Dans 
tous les cas, intégrer 
la vérification du 
respect du principe 
de bonne gestion 
financière très tôt 
dans le processus de 
contrôle limite ce 
genre de problème. 

MT 

YES - The Paying 
Agency in Malta has a 
permanent internal 
auditor so that the 
various measures 
implemented by the 
agency can be 
examined in detail. 
The current internal 
auditor prepares a five-

YES - The Paying 
Agency has no say in 
changes to national 
regulations. Although 
they may be too 
stringent in certain 
cases, this is in order 
to safeguard public 
and European funds. 
The Paying Agency 

A/D - Malta is of 
the opinion that 
beneficiaries 
apply for certain 
measures with 
the intention of 
benefiting from 
funding and 
make little effort 
to learn about the 

204

 
 
  
  
  
would prefer if these 
laws could be 
simplified. 

obligations they 
are taking on. 

year plan including 
revisions of all of the 
measures offered by 
the Paying Agency, 
together with a 
detailed examination 
of the accreditation 
criteria. This reassures 
the management that 
certain errors, flaws in 
internal processes and 
incorrect 
implementation of the 
regulations are 
identified immediately. 
The Agency is thus 
working pro-actively 
to identify its errors 
before the Certification 
Body or ahead of a 
mission from the 
European Commission 
or the Court of 
Auditors, so that action 
can be taken.  

205

 
 
NL 

A/B/C - All three are 
equally necessary. If 
one of the three is 
missing or is not 
functioning properly, 
this has a direct 
bearing on the 
quality of the 
controls. 

NO - Once a year, the 
Dutch Audit Authority 
carries out a system 
audit of all the first 
line audits for all the 
Structural Funds 

NO - With the 
implementation of the 
‘standard subsidy 
framework’ (national) 
as of 1 January 2010 , 
the Netherlands has 
substantially 
simplified the rules 
for implementation 
and justification of 
national subsidies, 
leading to a reduced 
implementation 
burden for the 
authority and a 
reduced 
administrative burden 
for the subsidy 
recipient. For 
example: mandatory 
flat-rate or 
performance-based 
(PxQ) subsidisation of 
subsidies below €125 
000, withdrawal of the 
advance payment 
applications and 
limitation of the 
number of interim 
reports. It is often EU 
provisions themselves 
that mean this 

206

D - The 
Netherlands 
would leave this 
to the judgment 
of the Member 
States 
concerned.  

 
 
  
  
'standard subsidy 
framework' cannot be 
used in all cases. 
Furthermore: the 
European Court of 
Auditors’ examples 
mainly concern 
decision-making on 
which target group 
and/or which costs to 
take into 
consideration for 
subsidisation. A 
broader formulation 
of the target groups 
and of the eligible 
costs does not lead to 
a simplification in 
terms of reduced 
burden in the 
Netherlands’ opinion. 
To conclude, the 
European 
Commission does not 
have the competence 
to amend national 
subsidy rules. 

207

 
 
PL 

A/B/C/D - According 
to the Coordinating 
Institution of the 
National Strategic 
Reference 
Framework (CI of 
the NSRF), we 
should agree with the 
opinion of the 
Commission, 
presented in relation 
to chapters 5.29 and 
6.15, pursuant to 
which - in 
accordance with 
adopted solutions - 
institutions conduct 
an in-depth control of 
expenditure at the 
project trial upon the 
certification of these 
expenditures to the 
Commission. And 
the mandatory 
verification of each 
payment request is 
not of the in-depth 
control nature, 
therefore it may not 
produce the effect in 
the form of the 
discovery of each 

A - ;( in particular high 
frequency of changes, 
lack of specification of 
some important 
concepts, e.g. 
"abnormally low 
price")B - one of the 
causes for errors in the 
area of public 
procurement may be 
problems resulting from 
the differences in 
interpretation regarding 
the correctness of the 
application of the 
national and EU law. It 
should be noted that it is 
not appropriate to treat 
national legislation and 
the EU directives on the 
public procurement as 
separate entities. To a 
large extent the content 
of national legislation is 
in fact a consequence of 
the adoption of specific 
solutions in directives. 
As a result, Member 
States have somehow 
limited opportunities for 
introducing 
simplifications in this 

208

NO - These cases are 
examined by the SCC 
– within the scope of 
selected elements of 
the system – basically 
in each control 
concerning directly the 
use of EU funds. The 
SCC does not provide 
for additional, special 
controls concerning 
first-level checks. In 
the opinion of the 
Court presented in the 
annual report for the 
year 2010, 
management and 
control systems in 
Poland are effective. 
As part of the 
conducted audit no. 
PF-4452, the ECA 

NO - National law 
and regulations 
implement EU law 
requirements as well 
as often complicated 
and detailed guidance 
and recommendations 
of the Commission 
DGs as how to 
implement EU law. 

Does not 
concern Poland  

 
 
  
irregularity. 
However, the 
irregularities are 
discovered during the 
aforementioned in-
depth control on the 
site where projects 
are implemented in 
relation to the project 
test sampled based 
on those developed 
by individual 
institutions.The MA 
of the OPI&E does 
not agree with the 
allegations of ECA 
auditors concerning 
control deficiencies 
in the system. In the 
opinion of the MA of 
the OPI&E, the 
institutions operated 
in accordance with 
the applicable legal 
standing. Moreover, 
the control system is 
monitored by the AA 
and EC on an 
ongoing basis and 
they do not find any 
major defaults. 
Moreover, the public 

checks".During a 
system control, the 
Managing Authority of 
the Operational 
Programme of the 
Development of 
Eastern Poland (MA of 
the OP DEP) verifies 
whether the functions 
specified in Art. 60 
and 70 of the Council 
Regulation (EC) No. 
1083/2006 of 11 July 
2006, entrusted by the 
IB of the OP DEP 
Agreement, are 
performed in the right 
manner and the 
management and 
control system of the 
OP DEP operates 
properly, effectively 
and in accordance with 
the law. This 
verification includes 
first-level checks 
carried out by the 
intermediary body. 
During the conducted 
operation audits, the 
Audit Authority (Tax 
Audit Office) also 

area. Therefore, the 
nature of the cause of 
problems connected with 
the public procurement 
law should only identify 
its complexity, without 
specifying the author of 
relevant legal actsC - the 
time devoted to 
individual first-level 
checks is sometimes so 
short that it does not 
offer the possibility of a 
thorough/detailed control 

209

 
 
procurement control 
system under the 
OPI&E was found by 
the EC to be 
effective. In the 
opinion of the MA of 
the OPIE the main 
reasons of 
irregularities in 
"first-level checks" 
executed in the OPIE 
is the high degree of 
complexity of IT 
projects and highly 
specialist nature of 
research and 
development 
projects. This may 
cause that the staff 
performing 
control/audit 
activities may not 
have sufficient 
qualifications and 
adequate/sufficient 
checklists. According 
to the Managing 
Authority of the 
Human Capital 
Operational 
Programme (MA of 
the HCOP) the 

draws attention to the 
issue of first-level 
checks carried out by 
the managing authority 
and intermediate body. 
A number of other 
authorised audit 
authorities (Public 
Procurement Office, 
SCC) also perform 
activities in this area. 
The applicable control 
system is designed to 
eliminate deficiencies 
in first-level checks. 
Pursuant to the 
provisions of the 
Principles of control 
under the HCOP, 
Intermediate Bodies 
(IBs) are required to 
conduct annually,  in 
the years 2008-2015, 
at least one system 
control in each 
institution to which 
they delegated a part 
of their tasks. And 
during the 
development of the 
Annual Control Plan 
for a given year, the 

210

 
 
reasons of any 
irregularities 
performed by 
individual 
institutions include in 
particular staff 
shortages, i.e. in the 
units responsible for 
the implementation 
of the control process 
too few employees 
are employed in 
relation to the 
number of system 
controls and project 
controls to be 
performed/the scope 
of works performed 
by these units 
(examination of 
complaints, appeals, 
etc.). This causes 
difficulties in the 
possibility of 
performing an in-
depth analysis of the 
materials presented 
for the control. High 
volume of control 
tasks also makes it 
difficult to improve 
employees' skills and 

MA of the HCOP 
always prepares a risk 
analysis, based on 
which the most risky 
institutions in the 
system are selected for 
auditing. Moreover, 
the MA assumes the 
possibility of 
extending system 
controls in the IBs 
when it finds that such 
activities are justified 
(e.g. in case of finding 
numerous irregularities 
in the implementation 
of the HCOP), inter 
alia with controls in 
the subordinate 
Intermediate Body of 
the 2nd degree. A 
system control is 
aimed at checking the 
correctness, 
effectiveness and 
compliance with the 
law of the procedures, 
as well as the 
functioning of the 
management and 
control system of the 
HCOP and allows for 

211

 
 
the adequate 
examination of all 
areas of the operation 
of the institution. In 
addition, the 
implementation system 
of the HCOP also 
provides for 
conducting temporary 
system controls when 
major defaults in the 
operation of the 
institutions involved in 
the implementation 
system are suspected. 
Such controls are 
carried out in practice, 
i.e. in case when the 
institution finds a 
threat in the 
functioning of a lower-
level institution. 

update their 
knowledge.Accordin
g to the Coordinating 
Institution of 
Regional Operational 
Programmes (CI of 
ROP) - change in the 
legal environment 
and interpretation of 
laws by controlling 
bodies, audit 
authorities and 
courts. In the opinion 
of the Supreme 
Chamber of Control 
(SCC) erroneous 
methodology 
contributes to the 
problem in the area 
of agriculture and 
rural areas. 
Furthermore, the 
time devoted to 
individual first-level 
checks is sometimes 
so short that it does 
not offer the 
possibility of a 
thorough/detailed 

212

 
 
control. 

 Therefore,  
in the opinion of the 
MA of the HCOP, 
there is no need to 
conduct additional 
first-level checks, as 
those that are 
conducted at present 
make it possible to 
find errors in the 
functioning of the 
institution and to take 
appropriate remedial 
actions. In the opinion 
of the Managing 
Authority of the 
European Territorial 
Cooperation MA of the 
ETC), the system 
control at the present 
level is sufficient. In 
the opinion of the MA 
of the OPI&E, the 
recommendation 
concerns the EC and 
the AA ("The Court 
recommends the 
Commission to (...) 
encourage auditing 
authorities to conduct 
detailed system 
controls concerning 

213

 
 
first-level checks 
conducted by 
managing authorities 
and intermediate 
bodies"). 
Notwithstanding the 
foregoing, bearing in 
mind the reservations 
of the MA of OPI&E 
submitted to the 
aforementioned 
findings of the ECA, 
and the fact that in the 
regular system controls 
(conducted under 
relevant regulations), 
both the EC and the 
Audit Authority do not 
find any serious 
deficiencies in the 
management and 
control system of the 
OPI&E, the MA of 
OPI&E does not plan 
to carry (or have 
carried by the IB) 
special system audits 
within the scope of the 
"first-level checks". 
Nevertheless, the 
aforementioned scope 
is also verified by the 

214

 
 
MA and the IB while 
conducting system 
controls, in accordance 
with the Annual 
Control Plans.  
In the opinion of 16 
MAs of the ROP, the 
recommendations in 
question concern the 
Audit Authority which 
controls MAs of the 
ROP, which are 
additionally controlled 
by the CC and SCC. 
Moreover, internal 
audits of the 
procedures of MAs of 
the ROP are 
conducted. In the 
opinion of MAs of the 
ROP, the sanction 
system is extensive 
and sufficiently 
rigorous. Procedures 
specified in the 
implementation 
process allow for strict 
adherence to the 
eligibility 
requirements.  
With respect to the 
OPIE, the MA marked 

215

 
 
answer YES. It also 
informed that "First 
level checks" in the 
management and 
control system of the 
OPIE are the checks 
carried out by the 
Implementing 
Institutions 
(institutions which are 
parties to contracts for 
project co-funding). 
The correctness of 
such checks is a 
mandatory element of 
system controls carried 
out by the MA of the 
OPIE  
in Implementing 
Institutions. The MA 
of the OPIE conducts 
annually system 
controls of each 
Implementing 
Institution - based on 
the annual control 
plan. 
At the request of the 
European 
Commission, the Audit 
Authority conducted 
an additional 

216

 
 
control/audit of the 
management and 
control system in the 
measure 4.5 of the 
OPIE. The Audit 
Authority does not 
plan to conduct any 
other/additional/specia
l audits. 

PT 

217

 
 
  
  
  
  
  
  
RO 

D - diversity of 
measures opened 
within the NRDP and 
the large number of 
sessions per calendar 
year, leading to 
agglomeration of 
projects in a short 
period of time as 
regards the APDRP 
evaluation 

NO - The current 
system audits carried 
out on each operational 
program include 
specific objectives 
aiming to assess the 
functioning of first 
level checks both 
within the Managing 
Authorities (MA) and 
within the intermediate 
bodies (IB). Checks 
conducted in regard to 
these objectives 
especially take into 
account the risk areas 
identified by both the 
MA and the European 
Commission during 
the previous audit 
activities (e.g. the 
public procurement 
area). The purpose of 
these evaluations is to 
obtain appropriate 
assurance for the 
correctness, regularity 
and eligibility of the 
amount requested for 
refund by 
beneficiaries. Please 
note that in 2011 and 

218

 
 
  
  
  
  
2012 audit actions on 
the procurement area 
were also conducted at 
UCVAP and 
ANRMAP level (new 
institutions formally 
integrated in the 
management and 
control systems) to 
assess, on the ex-ante 
segment, how these 
entities support the 
checks carried out at 
MA and IB level. 
According to the audit 
strategies amended and 
sent to the EC, this 
type of actions 
undertaken at UCVAP 
and ANRMAP level 
are planned to be 
conducted every year 
up to the end of the 
programming period 

219

 
 
SK 

D - staff turnover, 
time-consuming 
process of the project 
may cause variation 
in the adequacy of 
the expenditure 
verification time, 
unclear rules for 
eligibility. 

NO - The performance 
of the system audits 
aimed at determining 
the effectiveness of the 
management and 
control system 
provides adequately 
for the uncovering of 
deficiences in the area 
of first-level control at 
national level. 

YES - - 
Harmonisation of 
eligibility rules 
supplemented by 
national rules based 
on the same principle 
- Retain and expand 
the current 
mechanisms by 
applying the 
simplified costs 
methods, with the aim 
of reducing the 
administrative burden 
(see primary 
application of unit 
costs)- Applying the 
sampling method for 
audit, based on risk 
assessment- Fewer 
input documents, 
greater emphasis on 
outputs- 
Simplification of 
procedures in public 
procurement- 
Simplified definition 
of rules on 
expenditure eligibility 
for financial and 
insurance services.In 
the 2014 – 2020 

220

D -other reasons, 
probably to 
specific incidents 
in specific 
Member States. 
In Slovakia, 
where the non-
compliance with 
the requirements 
of cross-
compliance 
results in lower 
payments.  

 
 
  
  
programme period the 
Managing Authority 
for OP Education and 
OP Science and 
Research plans to use 
a simplification by 
applying a fixed 
amount of indirect 
project costs and 
applying fixed costs 
calculated on a 
standard scale of 
project unit costs. 
YES - UNP's reply: 
The Commission 
cannot of course 
change national 
eligibility rules 
directly, but a 
Member State can in 
order to allow 
sufficient room for 
manoeuvre in eligible 
areas or rather to say 
what is not eligible in 
specific areas. It is 
essential that 
eligibility rules are 
prepared in good time, 
that they are 
unambiguous and that 
they are designed 

SL 

D- For the 
implementation of 
measures to improve 
competitiveness (121 
farm modernisations 
and infrastructure 
developments) SI has 
produced catalogues 
of eligible costs 
which it has used 
since 2007 and which 
were last updated in 
2011. On the basis of 
the eligible costs, 
ARSKTRP only 
approves expenditure 
in applications that is 
within the limit of 
the maximum 

NO - : Because 
management checks 
are the subject of 
detailed examination 
in each system audit 
(key: key requirement 
4 – management 
checks); as a result of 
the findings of an audit 
of expenditure 
transactions certified 
in 2010, in 2011 the 
Slovenian audit body 
carried out a system 
audit of the 
intermediate body that 
focused on key 
requirement 4 (first-
level checks). 

A - Public procurement 
award procedures entail 
significant and varied 
inherent risks; the issue 
is complex and cannot be 
dealt with adequately in 
a single-sentence reply 

221

 
 
  
  
eligible. During the 
authorisation 
procedure, account is 
taken when 
authorising payment 
only of amounts that 
have been previously 
approved and comply 
with the catalogue of 
eligible costs. 

bearing in mind the 
burden that they 
impose on the 
beneficiary in terms 
of preparing evidence 
and on the party 
executing checks at 
every level of 
implementation.  
MKO and 
ARSKTRP's reply: 
Simplifications of the 
legislation make sense 
and we are preparing 
them for the next 
programming period. 
The main focus will 
be in the area of 
penalties where the 
emphasis will be on 
penalising according 
to seriousness and for 
recurrent offending. 
Likewise more 
attention will be paid 
to informing and 
training farmers via 
the farm management 
plan. Requests for 
individual measures 
and sub-measures 
must be formulated in 

222

 
 
such a way as to be 
administratively 
verifiable. 

223

 
 
ES  

D - Discrepancies 
with the 
interpretation of the 
Court of Auditors 

NO - In the 
management and 
control system audits 
one of the points to be 
analysed is the first-
level control 
procedure. It is not 
considered necessary 
to conduct a specific 
audit. It is not 
considered necessary 
to conduct a specific 
audit. 

SW 

D - SE considers that 
it is important to 
examine costs before 
disbursement to 
project owners and 
certification to the 
Commission.  

YES - This will 
become apparent from 
the ESV's [Swedish 
Financial Management 
Authority] audit 
strategies. We will 
know more in a few 
weeks.  

YES - When drafting 
new rules the aim 
should always be to 
make them effective 
and appropriate, and 
therefore not 
unnecessarily 
complex. It is not, 
however, the 

224

 
 
  
  
  
  
  
  
  
UK 

A/B/D - The Scottish 
Government Audit 
Authority (SGAA): 
In our opinion, there 
could be several 
issues that impact on 
the first level checks 
carried out by the 
national authorities. 
Insufficient training 
may well have an 
adverse impact on 
the ability of staff to 
identify weaknesses 
or effectively 
assessed whether 
costs being claimed 
were reasonable.  In 
addition, the actual 
volume of 
transactions would 
have an impact on 
the ability of staff to 
undertake the checks 
in sufficient detail 
that would be 
required if there were 
insufficient staff 
available to pick up 
the high levels of 

YES - SGAA:• 
Certifying Authority: 
Systems for certifying 
expenditure, drawing 
down funds, 
reconciling certified 
amounts to EC with 
accounting records and 
SEAS data to €urosys• 
Managing Authority 
(MA): Review of the 
revised control 
structure following the 
removal of the 
Intermediate Body tier 
from the control 
structure and the 
incorporation of the 
duties of the Bodies 
within the MA 
framework.• Managing 
and Certifying 
Authorities: Systems 
for recording 
irregularities, pursuing 
recoveries and 
maintaining the 
debtors’ ledger• 
Managing Authority: 
Compliance with 

A - SGAA: In the view 
of the SGAA, the 
complexities of the EU 
Public procurement rules 
has had an impact on the 
areas of error noted 
during audit reviews. 
These are not particular 
easy to follow and have 
led to issues involving 
first level checks.  Also 
the penalties associated 
with errors in 
procurement appear 
quite draconian in terms 
of penalties with no real 
leeway for judgement 
calls.BIS: Public 
procurement is a 
recurrent source of 
errors. I don't feel best 
placed to advise whether 
the underlying issue is 
national or EU rules, but 
I do think that the 
Commission needs to 
recognise this difficulty 
and take all possible 
steps to provide 
guidance and training to 

225

Commission's job to 
examine this 
YES - SGAA: In the 
case of Scotland, 
National Rules in the 
view of the SG AA 
are overly 
prescriptive.  The 
detailed levels of 
controls noted in the 
national rules makes it 
more difficult to 
manage the 
programmes as there 
is no real room for 
making reasonable 
assessments of 
specific issues.  
Controls prescribe 
what is and what is 
not acceptable. There 
is therefore no real 
room for manoeuvre 
and things are not 
usually that black or 
white. This can lead 
to conflict between 
the MA and 
beneficiaries in terms 
of what is acceptable 
and what is not.  
However this level of 

A/D - SGAA: 
We have not 
come across the 
issues described 
in the ECA 
report as the 
cross-
compliance 
regime in 
Scotland 
operates in 
general 
effectively.  
However, as 
requested, in the 
opinion of the 
SG AA the main 
reason would in 
all probability be 
down to bad 
communications 
between the 
authorities 
performing the 
control and the 
one enforcing 
any subsequent 
reduction. If 
good 
communications 

 
 
  
transactions that may 
be created from time 
to time in the 
programming 
period.Department 
for Business 
innovation and Skills 
(BIS):  The multiple 
choice question is 
rather simplistic.  
Structural Funds are 
complex and it would 
be difficult to 
eliminate errors 
entirely, but in the 
UK MAs have 
certainly responded 
positively to issues 
that have arisen in 
recent years in terms 
of reviewing their 
management and 
control systems. For 
example, in England 
DCLG introduced a 
comprehensive 
action plan in 2011 
showing how they 
were working to 
strengthen 
management 
controls, standardise 

Article 60 of Council 
Regulation (EC) No. 
1083/2006• Managing 
Authority: Compliance 
with the requirements 
regarding Financial 
Engineering 
instruments (Venture 
Capital and Loans 
Funds, etc).• Managing 
Authority: Systems for 
fraud prevention, 
detection and 
investigation. RPA: 
Internal Auditors work 
for the agency to 
provide an 
independent, objective 
assurance and 
consulting activity on 
systems, processes and 
core controls designed 
to add value and 
improve the Agency's 
operations. Each year 
they conduct 
transaction testing of 
first level checks 
performed for that 
year’s claim 
population. This 
supplements the 

MSs on the interaction of 
public procurement rules 
and Structural Funds to 
reduce the proportion of 
errors arising in this area 
for the next round of 
programmes.Department 
for Communities and 
Local Government 
(DCLG): The 
complexity of the EU 
procurement directives 
make this inherently 
complex and difficult. 
The guidance about the 
treatment of sub-OJEU 
procurement and the 
pressure on audit 
authorities to probe to a 
similar depth into sub-
OJEU procurement and 
pre-existing framework 
contracts has moved this 
to another level of 
complexity.  

detail makes it easier 
from an AA 
viewpoint to 
undertake audit work. 
BIS: UK Ministers 
have agreed that as 
part of the 
interdepartmental 
work to prepare the 
UK Partnership 
Agreement for 2014-
20 Structural Fund 
programmes, officials 
will develop options 
for administrative 
simplification and 
reducing burdens on 
beneficiaries. Options 
will need to be 
evaluated for cost and 
feasibility but could 
focus on: •        greater 
alignment of national 
eligibility rules for 
projects; •        
improved harmonised 
guidance to 
applicants; •        a 
common portal for 
applicants with 
underlying 
management 

226

are not in place 
then inevitably 
there would be 
instances of 
reductions in 
payments 
following cross-
compliance 
checking being 
missed.There 
may also be 
issues 
surrounding the 
way in which 
cross-
compliance 
checking is 
carried out if a 
number of 
agencies/organis
ations undertake 
such checks. 
This could led 
again to wider 
communication 
issues if proper 
procedures have 
not been 
developed. 

 
 
procedures and 
improve guidance 
following 
interruptions 
imposed in 2010. 
More recently, 
DCLG has focused 
on enhancing the 
quality of its Article 
13 management 
checks. 

Certifying Body audits 
currently completed by 
the National Audit 
Office on compliance 
with accreditation 
regulations and 
accuracy of 
payments.BIS: Audit 
Authorities in the UK 
carry out systems 
audits and operations 
audits as part of the 
Audit Strategy, details 
of which can be found 
in the Annual Audit 
Summary. Additional 
systems audits can be 
carried out if high 
error rates are found in 
audits of operations. 

processes harmonised 
wherever possible; 
and •        steps taken 
to ‘hide the wiring’ 
through use of 
common or similar 
forms and single 
contact points for 
applications to more 
than one fund.  
Officials should also 
explore whether 
management and 
control functions can 
be strengthened by 
establishment of a co-
ordination function 
across funds and/or 
structural change, e.g. 
for ERDF and ESF, 
merging the certifying 
authority function into 
the managing 
authority within 
individual funds and 
merging audit 
functions across the 
funds.   

227

 
 
 
Part B. Please enter any general comments you have 

concerning the 2011 Annual report 

or general issues relating to the discharge procedure. 

MS 
AT 
BE 
BG 

B 
No comments. 

228

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
CY 
CZ 

The annual report for 2011, etc. 

Denmark considers it satisfactory that the Court of Auditors has through the years – since the introduction of the audit opinion with 
effect from the financial year 1994 – with certain reservation regarded the EU’s accounts as providing a true and fair view of the 
Communities’ income and expenditure and its financial position. Taken in its entirety, this part of the audit opinion has in other 
words been positive through the years, and has for the last five financial years been free from reservations (blank opinion). 

Denmark considers it unsatisfactory that the Court of Auditors has again had to issue a negative audit opinion as to the legality and 
regularity of the transactions within, inter alia, areas of expenditure in which administration is shared between the Commission and 
Member States. Based on the progress in financial management and control of the budget achieved in recent years, there are 
nevertheless grounds for a certain degree of optimism as regards scope for achieving an audit opinion that continues to include few 
reservations. 

DK 

Particular importance is attached to the section of the annual report concerning the achievement of results with the aid of the EU 
budget. This section confirms the need for an improvement in the quality of expenditure and thus better compliance with the 
principle of sound financial management, i.e. thrifty, productive and not least effective use of the Union’s appropriations. There is a 
significant need for greater transparency concerning the true European added value of the EU interventions, as there is also a need 
for a stronger commitment from the Council in this area. The section on the achievement of results may help bolster the Council’s 
discussion of scope for better linkage of, on the one hand, assessments of results and, on the other, bud¬getary and legal regulation 
of the various policy areas. 

Denmark also appreciates the fact that the Court’s presentation of the audit results has become more satisfactory in recent years. This 
applies in particular to the following aspects: the publication of the most likely error percentages in the audited payments; integration 
of the Commission’s management opinions in the relevant sections of the annual report; the splitting of policy areas between several 
sections; and the enlarged description of the audit approach and method. This clearer presentation increases scope for rectifying 
weaknesses in the financial implementation of the budget and in the quality of the expenditure, and makes it easier year by year to 
identify whether and at what rate the necessary progress is being made. 

229

 
 
  
  
 
 
 
 
EST 
FIN 
FR 

DE 

GR 

HU 

This questionnaire was implemented in a technically clumsy fashion. The boxes in the questionnaire cannot be ticked directly.  

In the field of agriculture, the ECA attributed an error rate of almost 100% in respect of the open tender procedure. This error in the 
area of tender procedures concerns claims which were entirely eligible for support. With this assessment, the ECA fails to single out 
claims which are wholly ineligible and have a 100% error rate attributed to them.  
The Federal Ministry for Food, Agriculture and Consumer Protection (BMELV) considers that this approach followed by the ECA 
does not differentiate enough and must be corrected. 

We are pleased that the European Court of Auditors has again issued an unqualified opinion regarding the reliability of the report for 
the financial year 2011 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. We are pleased, however, that the error rate in 
the Regional policy, energy and transport chapter again decreased in 2011 against the previous year, proving the success of the 
efforts made by the Commission and the Member States in that regard. Of course, we do not believe that we have reached our 
intended objective, but in our opinion this serves as an indication that we are on the right track and that most parties involved are 
working to promote the lawful and correct use of aid.  
Our general view on the structure and content of the report is that its length and level of detail are appropriate. While the description 
of the identified weaknesses is characterised by a measure of generalisation, it is understandable that due to length constrains it was 
not possible to describe every shortcoming in detail. Furthermore, we find it useful that several chapters of the report also contain 
specific examples of identified irregularities related to the underlying transactions. 

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IRL 

IT 
LV 
LITH 
LUX 
MT 
NL 

PL 

• Ireland welcomes the ECA 2011 annual report.  
• In relation to policy group which includes Cohesion Policy, Ireland welcomes the fall in the error rate and the fact that the level of 
error remains well below those reported by the Court in the period 2006-2008. Ireland continues to consider that this is a positive 
development and a reflection that the provisions in the 2007-13 regulatory framework are working.  

• The issue of interpretation of procurement rules continues to be a significant factor in contributing to the error rate and Ireland 
would welcome greater clarity on their application to 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. 

The most likely error rate in total payments, estimated by the Court, in 2011 (3.9%) remained at the same level as in 2010 (3.7%). 
Given that during this period there was an increase in payments by EUR 7 164 million (5.85%) from EUR 122 231 million to EUR 
129 395 million, it should be viewed positively. 
According to the Court, the largest increase in the likely error rate in payments for 2011 compared to 2010 occurred in the former 
group of policies (1) Agriculture and Natural Resources (Agriculture: Market Support and Direct Aid as well as Rural Development, 
Environment, Fisheries and Health) and in the group of policies (2) Research and Other Internal Policies. 
In the opinion of the Commission, the increase in relation to the previous year under the sub-group of policies Agriculture: Market 
Support and Direct Aid is still within the standard range of statistical changes from year to year and does not demonstrate that the 
general quality in expenditure management and control by Member States has deteriorated. However, under the sub-group of 
policies Rural Development, Environment, Fisheries and Health, the Commission reports the deterioration of situation, but to a more 
limited extent than it was stated by the Court. 
In the context of the group of policies Research and Other Internal Policies, the Commission is of the opinion that its management 
and control systems provide reasonable assurance (taking into account the reservations) of maintaining a balance between the 

231

 
 
  
 
  
  
  
  
  
  
objectives of legality and correctness, and issues concerning the ratio of risk and proportionality and control profitability. 
It should be noted that the most likely error rate, estimated by the Court, under the former group of policies Cohesion, Energy and 
Transport (Regional Policy, Energy and Transport and Employment and Social Affairs), whose funds are used by Poland the most, 
has decreased. 
Poland will continue to participate actively in the debate on the acceptable error rates in spending EU funds, but above all, it will 
continue to endeavour to ensure that the funds spent in our country are free from defaults 

No department submitted any comments on the ECA Annual Report for budget year 2011. 

PT 
RO 
SK 
SL 

232

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

• 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. 

ES  

• 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, as regards the ERDF and Cohesion Fund, the Court of Auditors should review the criteria for quantifying the financial 
consequences of the errors and, in any case, apply the principle of proportionality laid down in Article 99 of Council Regulation 
(EC) 1083/2006 of 11 July 2006. 

• In the case of Agriculture, the error percentage has increased, due mainly to non-respect of cross compliance (good agricultural and 
ecological practices). To avoid this non-respect in future, the rules and conditions would have to be simplified and clarified in order 
to facilitate work in the first-level audit and reduce the audit team's margin for interpretation as far as possible. 

SW 

BIS: We have commented previously on the Annex II list of ECA audits which does not identify which programme is involved. 
Unless the ECA identify the CCI No of the programmes concerned, this section would be ignored. BIS and HM Treasury do NOT 
receive copies of ECA audit letters or reports so we are not in a position to know which of our programmes are audited. 

UK 

Regarding the actual report, BIS feels that the separation of ESF from ERDF and Cohesion Fund is unhelpful and counter-productive 
– Energy and Transport should be separated from Cohesion policy and ESF returned to that Chapter. The artificial split in the 2011 
report does not highlight the reduction in error rates in Cohesion Policy (Structural and Cohesion Funds) in 2011. 

RPA: The UK are disappointed to see the ECA's conclusion that the Commission's 'residual error rate' is not yet a reliable indicator 

233

 
 
 
 
 
 
 
  
 
 
of the extent to which transactions remain affected by error after the operation of supervisory and control systems. The Commission 
must be able to assess the residual error rate accurately if it is going to be able to tackle the problem effectively. 

The UK call on DG AGRI to work urgently with the ECA, other parts of the Commission and Member States to agree a robust 
methodology for measuring the legality and regularity of expenditure, after the application of controls to claims, so that certification 
bodies can use this in their annual audits. 

The UK agrees with the ECA and DG AGRI that it is essential that rural development programmes after 2013 are simple to 
implement and administer, so that error rates are reduced. Regulatory requirements must help rather than hinder Member States to 
simplify the implementation of their programmes as envisaged by Article 9 of the Rural Development Regulation. Careful 
consideration also needs to be given to the timetable for implementation. 

The UK believe that Member States should also be able to simplify their administrative processes and reduce the burden on 
claimants to ensure that their rural development measures are “verifiable and controllable” under Article 69. 

Whilst the error rate for expenditure on market measures and direct support is lower than that for rural development, it is still above 
the materiality threshold. The error rate on Pillar 1 could rise significantly above the current 2.9% if additional administrative 
complexity is introduced due to measures such as greening and the active farmer test. Action is therefore needed to ensure that 
control requirements are as simple as possible across the whole of the CAP. 

The UK note that the ECA provided an opinion (No. 1/2012) on the CAP reform proposals. It would be useful to have a further 
assessment from ECA next year as to whether the reform is likely to reduce future error rates. 

DCLG: Table 5.2: The ECA did not consult either the Managing Authority (DCLG) or the Audit Authority (DCLG) or DG Regio 
before making these wholly inaccurate statements. In a letter to DG Regio dated December 2012 they have now admitted that the 
removal of unrepresentative errors and the reduction of the residual error rate was justified.  
The ECA should now withdraw the references to Merseyside and West Midlands programmes and republish table 5.2. 

234