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  
COM(2013) 118 final 

REPORT FROM THE COMMISSION 

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

{SWD(2013) 61 final} 

EN 

   EN 

 
 
 
 
  
 
TABLE OF CONTENTS 

Member States' Replies to the Court of Auditors' 2011 Annual Report ............................ 3 

Executive summary .................................................................................................................. 3 

1. 

2. 

SCOPE OF THE REPORT .................................................................................................... 4 

PRESENTATION AND KEY MESSAGES OF THE COURT'S 2011 REPORT ............................ 5 

3.  Towards improvement in Shared management by Member States ............................ 6 

3.1   First level checks, national rules and systems audits. ................................................... 7 

3.2   Audit Authorities............................................................................................................ 10 

3.3   Public Procurement........................................................................................................ 10 

3.4.  Cross compliance............................................................................................................ 12 

4.  Conclusion....................................................................................................................... 13 

 
 
REPORT FROM THE COMMISSION 

MEMBER STATES' REPLIES TO THE COURT OF AUDITORS' 2011 ANNUAL REPORT 

EXECUTIVE SUMMARY 

This  report  is  an  analysis  of  the  Member  States'  replies  to  the  European  Court  of 
Auditors'  annual  report  for  budgetary  year  2011.  It  is  in  accordance  with  the 
provisions  of  article162  (5)  of  the  Financial  Regulation  applicable  to  the  General 
Budget of the European Union. 

For  2011,  the  Court  made  further  modifications  to  the  presentation  of  its  report, 
primarily  by  adding  two  new  chapters.  The  Court  gave  a  clean  opinion  on  the 
accounts and it estimated the most likely error rate for the budget as a whole at 3,9% 
which  is  similar  to  last  year's  overall  error  rate  of  3,7%.  The  figure  of  3.9%  now 
includes errors in cross-compliance for both “Agriculture: market and direct support” 
and  “Rural  development”  following  a  change  in  the  Court’s  methodology.  Without 
this change, the figure would have been 3.8%. 

The  majority  of  replies  from  Member  States  were  received  within  the  scheduled 
timeline1.  As  in  previous  years,  the  quality  varied  considerably  from  one  Member 
State to another. In some cases replies were of a very high standard, while in others it 
was apparent that very little quality time had been dedicated to the replies. 

Member States reiterated their commitment to partnership with the Commission and 
the Court in order to ensure sound financial management of EU funds. For instance, 
three quarters of all Member States have expressed an interest in extending tripartite 
meetings, (which already exist in the Cohesion policy area), to Rural development 

Both  the  Commission  and  the  Member  States  have  expressed  their  commitment  to 
tackling  Rural  development  issues  in  order  to  reduce  the  error  rate.  DG  AGRI  has 
launched an action plan and as indicated in their replies, Member States are already 
taking some remedial action in order to address Rural development issues.  

In  the  Cohesion  policy  as  a  whole,  although  there  have  been  significant 
improvements,  concrete  and  sustained  actions  are  required  by  both  Member  States 
and  the  Commission  to  ensure  improved  results.  For  this  programming  period  DG 
REGIO  and  DG  EMPL  will  continue  targeted  actions.  These  will  include  focusing 
audits on more risky areas and financial actors, careful monitoring of actions taken 
by  national  authorities  interrupting/suspending  payments  and  applying  financial 
corrections where justified. For the next programming period, several measures have 
been proposed by the Commission and are being discussed in the inter institutional 
process.  These  measures  include  wider  use  of  simplified  costs,  quarterly  focused 
reporting  by  Member  States  to  the  Commission,  stricter  eligibility  rules  and  the 
introduction of net financial corrections and management declarations.  

1 See Annex A of this report-p15 

3

 
 
 
 
                                                 
REPORT FROM THE COMMISSION 

MEMBER STATES' REPLIES TO THE COURT OF AUDITORS' 2011 ANNUAL REPORT 

1. 

Scope of the Report 

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 State2 and Annex III was a questionnaire on general findings 
related to the policies and programmes under shared management. 

This report is an analysis of the Member States' replies and is accompanied by a Staff 
Working Document (SWD) which comprises the Member States' replies to Annex I 
and Annex III3. 

2 Annex II comprises the replies of the Member States to individual Statements of Preliminary Findings and is  
  not included in the Staff Working Document, but is made available to the Court. 
3 See previous footnote 

4

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
2 

Presentation and key messages of the Court's 2011 report 

The Court made further modifications to the presentation of the 2011 Annual Report. 
Two new chapters were introduced- one each for Agriculture and Cohesion- in order 
to  provide  a  more  detailed  analysis  of  the  audit  results  for  these  two  policy  areas. 
“Agriculture and natural resources” was replaced by “Agriculture: market and direct 
support”  and  “Rural  development,  environment,  fisheries  and  health”.  The  chapter 
which  was  formerly  Cohesion,  energy  and  transport  was  replaced  by  “Regional 
policy, energy and transport” and “Employment and social affairs”. 

In addition to the new chapters, the Court also provided comparative figures for the 
most likely error rate (MLE) for 2010 and 2011 for the budget as a whole, as well as 
for the individual policy areas.  

Finally  the  Court  further  highlighted  EU  performance  management  in  Chapter  10-
"Getting results from the EU budget"- which was first introduced in the 2010 Annual 
Report. 

In its statement of assurance, the Court noted that the accounts presented fairly the 
financial  position  of  the  Union  and  the  results  of  its  operations  and  cash  flows. 
Revenue and commitments were free of material error. Payments for Administrative 
and  other  expenditure  were  evaluated  as  free  from  material  error.  Payments  for 
“External relations and enlargement” were also free from material error,  except for 
interim and final payments. All other policy areas were affected by material errors. 
The  Court  also  considered  that  the  control  systems  were  all  classified  as  'partially 
effective', except in policy areas Administrative and other expenditure and Revenue 
which were classified as 'effective'. 

Policy  areas  affected  by  material  error  were  as  follows:  Rural  development, 
environment,  fisheries  and  health  with  a  most  likely  error  rate  (MLE)  of  7,7%. 
Agriculture:  market  and  direct  support  with  a  MLE  of  2,9%.  The  situation  for 
Cohesion policy as a whole improved significantly with a MLE of 5,1% compared to 
the 2010 figure of 7,7%. Nonetheless, both Cohesion policy chapters were affected 
by  material  error  with  “Regional  policy,  energy  and  transport”  having  a  MLE  of 
6,0%  and  “Employment  and  social  affairs”  a  MLE  of  2,2%.  Finally,  Research  and 
other internal policies had a MLE of 3,0%. 

For 2011, the Court's MLE for the EU budget as a whole was 3,9%, comparable to 
the 2010 figure of 3,7%. The figure of 3.9% includes errors in cross-compliance for 
both “Agriculture: market and direct support” and "Rural development" following a 
change in the Court’s methodology. Without this change, the figure would have been 
3.8%. 

The graph below shows the evolution of the error rate for the budget as a whole since 
2006. 

5

 
 
 
(1) In contrast to previous years, failure to meet cross-compliance obligations by recipients of payments under the CAP has 
been included in the calculation of the most likely error for 2011. The errors found represent around 0,1 percentage point of 
the most likely error estimated by the Court for payments as a whole.  

3. 

TOWARDS IMPROVEMENT IN SHARED MANAGEMENT BY MEMBER STATES  

As  mentioned  in  the  introduction,  in  addition  to  the  letter,  the  Commission  duly 
provided each Member State with three annexes: Annex I was a questionnaire on the 
paragraphs in the report  referring to  the individual  Member States; Annex II  was a 
questionnaire on audit findings which refer to each Member State and Annex III was 
a questionnaire on general findings related to shared management for DAS 2011. For 
Annexes  I  and  II,  the  Member  States  were  requested,  where  necessary,  to  provide 
details  of  actions  taken  to  rectify  the  errors  as  well  as  the  timing,  content  and 
expected outcome. 

This section of the report analyses the replies provided by Member States to Annexes 
I, II and III under four main thematic headings – (1) First level checks, national rules 
and  systems  audits  (2)  Audit  Authorities  (3)  Public  procurement  and  (4)  Cross 
compliance. 

The  majority  of  replies  from  Member  States  were  received  within  the  scheduled 
timeline4.  As  in  previous  years,  the  quality  varied  considerably  from  one  Member 
State to another. In some cases replies were of a very high standard, while in others it 
was  apparent  that  very  little  quality  time  had  been  dedicated  to  the  replies. 
Nonetheless, overall, nearly all Member States reported on and described initiatives 
for  improvement  already  taken  or  to  be  taken  in  the  future.  Some  Member  States 

4 See Annex A of this report-p14 

6

 
 
 
 
 
                                                 
reiterated  their  commitment  to  partnership  with  the  Commission  and  the  Court  in 
order  to  ensure  sound  financial  management  of  EU  funds.5  For  instance,  three 
quarters  of  all  Member  States  have  expressed  an  interest  in  extending  tripartite 
meetings (which already exist in the Cohesion policy area) to Rural development.6 -
see Graph 1.2 which provides information related to question 5 in Annex III of the 
questionnaire.  This  initiative  on  tripartite  meetings  is  also  in  line  with  the  Council 
discharge recommendation for the financial year 2011.7 

Graph 1.2 

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? 

3.1  

FIRST LEVEL CHECKS, NATIONAL RULES AND SYSTEMS AUDITS. 

Concerning  first  level  checks  and  national  rules,  in  its  report,  the  Court  found 
weaknesses in the checks made by national authorities and identified some cases in 
which  national  authorities  had  not  effectively  assessed  whether  costs  claimed  were  
in  compliance  with  applicable  rules.  In  Regional  policy  for  example,  the  Court 
considered that for 62% of the transactions affected by error “sufficient information 
was  available  for  the  Member  State  authorities  to  have  detected  and  corrected  at 
least some of the errors prior to certifying the expenditure to the Commission”8. For 

5 SWD p225 
6 SWD see MS replies to Annex III question 5 
7 COMBUD 17/13 p10 
8 ECA Annual Report 2011-5.29-p127 

7

 
 
 
 
                                                 
policy area Employment and social affairs, the Court made a similar observation for 
76%  of  the  transactions  affected  by  error9.  In  Rural  development,  the  Court  found 
that four of the six national authorities audited had not effectively checked whether 
costs  claimed  were  reasonable  and  that  on  the  spot  checks  had  not  always  been 
properly  carried  out  by  paying  agencies.10  In  addition,  the  Court  identified  non-
compliance with national rules as one of the risks to regularity of payments.11 

With regard to the adequacy of first level checks, Member States provided a variety 
of  responses.  Austria  and  Belgium  stated  that  in  each  case  these  checks  were 
satisfactory12,  with  Austria  highlighting  as  evidence  the  fact  that  error  rates  were 
around  the  materiality  threshold  for  the  two  European  Social  Fund  (ESF) 
programmes  audited  by  the  national  authorities.  Two  Member  States  (Finland  and 
Latvia)  stated  that  complex  eligibility  and  legislative  rules  did  occasionally  lead  to 
varying interpretations which in turn had an impact on the quality of the first level 
checks.13 Staff turnover with the consequent loss of expertise was cited by Slovakia 
and  Finland  as  a  contributory  factor  to  inadequate  first  level  checks.14  Finally, 
Greece summed up the situation by stating that "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".15 

Over  half  of  the  Member  States  agreed  that  national  rules  need  to  be  simplified  in 
order  to  lessen  the  administrative  burden  and  consequently  reduce  the  number  of 
errors. Nonetheless, Member States also indicated that EU directives also needed to 
be simplified in order to contribute to a reduction in errors. Luxembourg summed up 
the situation in the following statement: "National rules can always be simplified, but 
initial simplification of the rules in the (EU) directives would be welcomed"16. 

Finally, in response to a question on systems audits of first level checks (question 2 
in the questionnaire Annex III and Graph 1.3) just over 40% of Member States stated 
that in some cases they were already carrying out such audits. Denmark for example 
commented  that  in  both  Regional  policy  and  Rural  development,  the  Danish 
Business  Audit  Authority  and  the  Internal  Audit  Unit  within  the  Danish  AgriFish 
Agency respectively, had conducted systems based audits. In the case of the Danish 
AgriFish Agency, the Internal Audit Unit had already carried out an audit of Local 
Action  Groups  (LAG)  schemes  under  the  Rural  Areas  Programme  and  was  due  to 
carry out a follow up audit of the same programme in 2013.17 Lithuania, Latvia, the 
Czech  Republic  and  Greece18  all  indicated  that  systems  audits  were  already  an 
integral part of their auditing schedules and were carried out regularly. 

Other  Member  States  concluded  that  specific  systems  audits  were  not  required  as 
their particular audit strategy was comprehensive. Germany stated that audits of first 
level  checks  were  already  an  integral  part  of  systems  audits  and  that  specific  risk 

9 ECA Annual Report 2011 6.15-p155 
10 ECA Annual Report 2011-4.26-4.29-p104-105 
11 ECA Annual Report 2011- Example 5.2-p130, 4.26-p104, 5.29-p127 
12 SWD p164, 166 
13 SWD p179, 192 
14 SWD p215, 179 
15 SWD p185 
16 SWD p198 
17 SWD p176 
18 SWD p195, 192, 173, 185 

8

 
 
 
 
 
                                                 
areas  could  be  verified  separately.19  Slovakia  summarised  its  situation  in  similar 
terms.20 

Weaknesses  in  first  level  checks  and  in  particular  breaches  in  national  eligibility 
rules have contributed to the error rate in the Cohesion policy area. The Commission 
is  playing  an  active  role  in  encouraging  Member  States  to  address  the  issue.  It  has 
established a series of measures which include support to national authorities in their 
efforts  at  simplification,  and  support  for  management  and  control  authorities.  In 
addition,  it  is  also  carrying  out  a  thematic  risk-based  audit  on  the  effectiveness  of 
first level checks. 

Graph 1.3 

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?  

19 SWD p181 
20 SWD p215 

9

 
 
 
 
 
                                                 
3.2   AUDIT AUTHORITIES 

In  the  2011  Annual  Report  the  Court  provided  results  of  the  assessments  of  Audit 
Authorities (AAs) in seven Member States. The Court reviewed various facets of the 
working  methods  of  the  AAs  including  organisational  arrangements,  working 
documents and annual control reports and opinions. The results of these assessments 
were that four AAs were 'effective' two were ‘partially effective’ and one was ‘not 
effective’. The areas highlighted by the Court for improvement included checklists, 
quality  control  of  audits  and  audit  methodology.21  Consequently,  the  Court 
recommended  that  the  Commission  should  provide  further  guidance  to  AAs,  in 
particular  on  sampling  methods  and  that  AAs  should  be  encouraged  to  carry  out 
more systems audits.22 

Generally,  the  Member  States  in  which  AAs  had  been  assessed  negatively  by  the 
Court  and  which  had  provided  a  reply  indicated  that  where  failings  had  been 
identified,  remedial  action  had  already  been  taken  or  was  ongoing.  The  Czech 
Republic for example stated that: “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.”23 

In addition, the Member State commented further on the Court’s sampling selection. 
It  stated  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.”24 

Romania  stated  that  in  the  light  of  the  Court’s  observations,  its  main  AA  had 
reviewed  the  Court’s  preliminary  findings  and  had  expressed  a  willingness  to 
participate in a tripartite meeting (ECA, EC and AA) in order to “present to the ECA 
the  measures  to  be  taken  on  the  matters  which  ECA  auditors  considered  to  need 
some improvement.” This tripartite meeting was held in June 2012 and proved useful 
in clarifying important issues.25 

Generally Member States have indicated that where necessary, AAs aim continually 
to improve the quality of their work in order to ensure that the results are in line with 
the Court's recommendations in the 2011 report.  

3.3  

PUBLIC PROCUREMENT 

Public procurement was highlighted in the Court’s 2011 report as one of the major 
sources  of  errors.  In  Regional  policy  the  Court  identified  non  compliance  with 

21 ECA Annual Report 2011-5.39-5.41-p132-133 
22 ECA Annual Report 2011-5.73-p143-144 
23 SWD p8 
24 SWD p11 
25 SWD p123 

10

 
 
 
                                                 
procurement rules in 25% of the 180 transactions audited. In addition, in 9% of the 
transactions  audited  serious  failures  to  respect  rules  were  identified  and  accounted 
for 44% of all quantifiable errors in the policy area26. Similarly in policy area “Rural 
development”  and  “Employment  and  social  affairs”  non-compliance  with 
procurement rules contributed to the error rate27. 

Member  States  acknowledge  the  importance  of  procurement  errors  and  continue  to 
seek measures to remedy the situation. Hungary for example stated that: "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."28 

Spain  also  provided  information  on  measures  taken  to  improve  the  procurement 
situation. For Regional policy, five Statements of Preliminary Findings addressed to 
the  Member  State  concerned  findings  on  public  procurement.  In  four  of  the  five 
cases Spain stated that it had already taken concrete action to improve the situation 
and  that  procedures  in  the  field  had  either  been  reinforced  or  new  procedures  had 
been  introduced.  The  fifth  case  was  a  limited  compliance  issue  with  no  financial 
implications.29 

Seven Member States - Austria, Denmark, France, Germany, Lithuania, Luxembourg 
and  Poland,  all  highlighted  three  main  factors  which  contribute  to  procurement 
errors.30  These  were  (1)  complexity  of  national  public  procurement  rules  (2) 
complexity  of  EU  public  procurement  directives  and  (3)  insufficient  first  level 
checks.  Luxembourg  stated  additionally  that  procurement  procedures  posed  a 
particular  challenge  to  project  managers  who  very  often  had  no  expertise  in  the 
area.31 

Other  Member  States  suggested  that  the  reasons  for  procurement  errors  were  even 
more specific. The Czech Republic commented that: "The main cause of errors (in 
procurement)  is  the  ambiguous  wording  of  regulatory  public  procurement  and  the 
associated different perspective of contracting authorities on these provisions".32 

Member  States  continue  their  efforts  to  improve  implementation  of  public 
procurement  rules  and  procedures.  The  Commission  is  acutely  aware  of  the 
challenges  which  Member  States  face  with  regard  to  public  procurement  and 
submitted a proposal for modification of the existing Public Procurement Directive in 
December  2011.  The  proposal  is  currently  under  discussion  in  Parliament  and 
Council.  Consensus  has  already  been  reached  on  the  main  elements  of  the 
Commission  proposal,  including  anti-fraud  measures,  simplification  and  greater 
flexibility of rules and procedures. 

26 ECA Annual Report 2011-5.32-p128 
27 ECA Annual Report 2011-Example 3.1 p78 and Example 6.3 c-p157 
28 SWD p3 
29 Reply to Annex II in which specific SPFs are mentioned 
30 SWD p164, 176, 180, 181, 195, 198, 203 
31 SWD p198 
32 SWD p173 

11

 
 
                                                 
3.4.  

CROSS COMPLIANCE 

In  its  2011  Annual  Report,  for  the  first  time  the  Court  included  cross  compliance 
errors  in  the  calculation  of  the  error  rate  for  both  “Rural  development”  and 
“Agriculture: market and direct support”. In both policy areas the Court focused on 
selected  GAEC  (good  agricultural  and  environmental  conditions)  and    statutory 
management  requirements  (SMRs)  and  identified  some  errors.  In  “Agriculture: 
market  and  direct  support”,  the  Court's  audit  also  examined  the  design  and 
implementation of the systems for cross compliance in six Member States and found 
that of the six systems audited, one was effective,  four  were  partially  effective  and 
one  was  not  effective..33  In  “Rural  development”  in  particular,  cross  compliance 
infringements  were  identified  in  26  of  the  73  payments  examined  by  the  Court.  In 
addition, the Court also noted significant problems concerning the implementation of 
cross compliance requirements for the identification and registration of animals.34 

The Member States   where cross compliance systems were audited and weaknesses 
identified, all provided replies to this finding. They all highlighted the importance of 
the  timing  of  the  verifications  and  the  possible  difficulties  this  entailed.  Finland 
commented that: "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".35 

Denmark stated that cross compliance verifications were being started earlier in the 
year,  while  Spain  commented  that  their  verifications  were  now  being  made 
throughout  the  year.36  Italy  has  now  considered  adjusting  "the  scheduling  of  the 
checks for 2013 to comply with the ECA's comments"37 and finally Hungary seemed 
to be uncertain of the impact of the timing issue.38 

In  addition,  some  Member  States  provided  other  possible  reasons  for  cross 
compliance errors - see graph 1.4 with details of reasons given by Member States for 
non-respect  of  cross  compliance.  Malta  and  Latvia39  for  example  stated  that  cross 
compliance  requirements  were  not  sufficiently  clear  and  Malta  stated  further  "that 
beneficiaries apply for certain measures with the intention of benefiting from funding 
and  make  little  effort  to  learn  about  the  obligations  they  are  taking  on."  Finally 
Ireland40  pointed  out  that  some  Member  States  may  consider  certain  breaches  as 
minor  and 
to  no  reduction.  Ireland  also  cited  possible 
communication breakdowns between the specialised body and the paying agency as a 
reason for cross compliance errors. 

therefore 

leading 

33 ECA Annual Report 2011 3.9 p75 and 4.16-4.18 p102 and 4.30-4.31-pp105-106 
34 ECA Annual Report 2011 4.17-4.18 p102 
35 SWD p113 
36 SWD p112, p113 
37 SWD p115 
38 SWD p113 
39 SWD p199, p192 
40 SWD p190 

12

 
 
 
                                                 
Graph 1.4 

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: 

In  order  to  mitigate  the  inherent  risk  of  errors  in  cross  compliance,  in  its  recent 
proposal  for  a  Common  Agricultural  Policy  after  2013,  the  Commission  proposes 
further simplification and streamlining of cross compliance rules and the respective 
controls.41  

4. 

CONCLUSION 

The  vast  majority  of  the  replies  from  the  Member  States,  indicate  that  the  relevant 
bodies in the Member States carefully follow-up the findings of the European Court 
of Auditors. Member States agree that first level checks which function well are of 
critical  importance,  and  that  remedial  actions,  particularly  with  regard  to  the 
performance of Audit Authorities, are on-going. 

Weaknesses  and  errors  detected  by  the  Court  also  show  that  simplification  is  a 
comprehensive  process  which  affects  both  European  and  national  rules,  even  if  at 
times, it is difficult to tell the difference between all applicable rules. 

41  Regulation  on  the  financing,  management  and  monitoring  of  the  Common  Agricultural  Policy  (horizontal 
regulation) containing cross compliance rules - COM(2011) 628 final/2. 

13

 
 
 
 
 
 
                                                 
 
The Commission is playing an active role in this area: In December 2011, it tabled 
ambitious  proposals  regarding  public  procurement  rules.  These  are  currently  under 
discussion  in  the  European  Parliament  and  Council.  Consensus  has  already  been 
reached  on  the  main  elements  of  the  Commission  proposal,  including  anti-fraud 
measures, simplification and greater flexibility of rules and procedures. 

More generally, the Commission has established a series of measures which include 
support to national authorities in their efforts towards simplification, and support to 
management  and  control  authorities.  In  addition,  it  is  also  carrying  out  a  thematic 
audit on the effectiveness of first level checks. For Rural development specifically, 
the  Commission  established  an  action  plan  which  includes  measures  such  as  better 
information, training and new guidelines for beneficiaries and administrations, and a 
more  rigorous  audit  plan.  In  addition,  the  Commission  has  addressed  a  letter  to  all 
Member States requesting that they identify inter alia, a concrete set of actions aimed 
at the reduction of errors and that they reinforce preventative measures to reduce the 
risk of errors in the future implementation of Rural development programmes. 

Finally,  the  Commission  welcomes  the  fact  that  Member  States  reiterated  their 
commitment  to  partnership  with  the  Court  in  order  to  ensure  sound  financial 
management  of  EU  funds.  For  instance,  three  quarters  of  all  Member  States  have 
expressed  an  interest  in  extending  tripartite  meetings  (ECA,  Member  States  and 
Commission) which already exist in the Cohesion policy area, to Agriculture - Rural 
development. 

14

 
 
 
Annex A 

MEMBER STATE 

Transmission date 

AUSTRIA 
BELGIUM 
BULGARIA 
CYPRUS 
CZECH REPUBLIC 
DENMARK 
ESTONIA 
FINLAND 
FRANCE 
GERMANY 
GREECE 
HUNGARY 
IRELAND 
ITALY 
LATVIA 
LITHUANIA 
LUXEMBOURG 
MALTA 
NETHERLANDS 
POLAND 
PORTUGAL 
ROMANIA 
SLOVAKIA 
SLOVENIA 
SPAIN 
SWEDEN 
UNITED KINGDOM 

18/12/2012 
21/12/2012 
14/12/2012 
14/12/2012 
14/12/2012 
11/01/2013 

13/12/2012 
18/12/2012 
18/12/2012 
17/12/2012 
17/12/2012 
18/01/2013 
13/12/2012 
27/12/2012 
14/12/2012 
13/12/2012 
13/12/2012 
14/12/2012 
13/12/2012 
13/12/2012 
14/12/2012 
14/12/2012 
13/12/2012 
13/12/2012 
14/12/2012 
28/01/2013 

15