COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND TO THE COUNCIL on the follow-up to 2012 discharge - Replies to requests from the European Parliament
Date: 2014-09-26
Institutions: European Commission
Subjects: EU control, EU expenditure, audit, budgetary control, financial control, general budget (EU), management audit, parliamentary question













EUR-Lex - 52014SC0286 - EN











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52014SC0286

COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND TO THE COUNCIL on the follow-up to 2012 discharge - Replies to requests from the European Parliament /* SWD/2014/0286 final */









TABLE OF CONTENTS
INTRODUCTION..................................................................................................................... 4
European Parliament resolutions on 2012
discharge................................................................... 5
Agricultural and Regional Policy:
Deficiencies in the Commission’s and Member States’ management        6
Commission’s Reservations, reasons for
binding commitments...................................... 11
Binding commitments to be made................................................................................... 18
The Court of Auditors' Statement of Assurance............................................................. 35
Revenue...............................................................................................................................      41
Agriculture....................................................................................................................... 44
Regional Policy, Energy and Transport........................................................................... 55
Commission Task Force for Greece................................................................................. 63
Employment and social affairs........................................................................................ 64
External relations............................................................................................................. 70
Research and other internal policies................................................................................ 73
OLAF.. ........................................................................................................................... 75
Tobacco smuggling.......................................................................................................... 81
Absence of progress in Bulgaria...................................................................................... 83
Roma.... ........................................................................................................................... 84
IT policies........................................................................................................................ 86
Studies and advice/consultation from external
providers............................................... 88
Getting results from the EU budget................................................................................ 89
SR 8/2012 Targeting of aid for the
modernisation of agricultural holdings................... 90
SR 11/2012 Suckler cow and ewe and goat
direct aids under partial implementation of SPS arrangements  92
SR 13/2012 European Union development
assistance for drinking water supply and basic sanitation in sub-Saharan
countries............................................................................................... 94
SR 14/2012 Implementation of EU hygiene
legislation in slaughterhouses of countries that joined the EU since 2004................................................................................................................... 95
SR 15/2012 Management of conflict of interest
in selected EU agencies...................... 96
SR 16/2012 The effectiveness of the Single
Area Payment Scheme as a transitional system for supporting farmers in the new
Member States.................................................................... 98
SR 17/2012 The European Development Fund
(EDF) contribution to a sustainable road network in sub-Saharan Africa................................................................................................. 100
SR 18/2012 European Union Assistance to
Kosovo related to the rule of law............ 102
SR 20/2012 Is Structural measures funding for
municipal waste management infrastructure projects effective in helping Member
States achieve EU waste policy objectives?..................... 103
SR 21/2012 Cost-effectiveness of Cohesion
Policy Investments in Energy................. 105
SR 22/2012 Do the European Integration Fund
and European Refugee Fund contribute effectively to the integration of
third-country nationals?............................................................ 106
SR 23/2012 Have EU Structural Measures
successfully supported the regeneration of industrial and military brownfield
sites?............................................................................................. 108
SR 24/2012 The European Union Solidarity
Fund’s response to the 2009 Abruzzi earthquake: The relevance and cost of
operations..................................................................................... 109
SR 25/2012 Are tools in place to monitor the
effectiveness of European Social Fund spending on older workers?.......................................................................................................... 110
SR 1/2013 Has the EU support to the
food-processing industry been effective and efficient in adding value to
agricultural products?...................................................................................... 111
SR 2/2013 Has the Commission ensured
efficient implementation of the Seventh Framework Programme for Research?......................................................................................................... 114
SR 3/2013 Have the Marco Polo programmes been
effective in shifting traffic off the road?            116
SR 4/2013 EU Cooperation with Egypt in the Field of Governance............................ 120
SR 5/2013 Are EU Cohesion Policy funds well
spent on roads?................................. 121
SR 6/2013 Have the Member States and the
Commission achieved value for money with the measures for diversifying the
rural economy?...................................................................... 123
SR 7/2013 Has the European Globalisation
Adjustment Fund delivered EU added value in re-integrating redundant workers?......................................................................................... 127
SR 8/2013 Support for the Improvement of the
economic value of forests from the European Agricultural Fund for Rural
Development.......................................................................... 129
SR 9/2013 EU support for governance in the Democratic Republic of the Congo...... 131
SR 10/2013 Common Agricultural Policy: Is the
specific support provided under Article 68 of Council Regulation (EC) No
73/2009 well designed and implemented?..................... 136
SR 12/2013 Can the Commission and Member
States show that the EU budget allocated to the rural development policy is
well spent?................................................................... 139
SR 14/2013 European Union direct financial
support to the Palestinian Authority..... 143
Eighth, ninth and tenth European Development
Funds................................................ 148
Performance, financial management and control
of EU agencies................................. 162
Bodies set up under the TFEU and the Euratom
Treaty............................................... 168
INTRODUCTION
This Commission
Staff Working Paper completes the Report from the Commission to the European
Parliament and the Council on the Follow-up to the 2012 Discharge. It presents
in detail the answers to 353 specific requests made by the European Parliament
in its Resolutions forming an integral part of its Decisions on the 2012
Discharge[1].
European Parliament resolutions on 2012
discharge
Agricultural
and Regional Policy: Deficiencies in the Commission’s and Member States’ management
1.           (§1 - 2012/PAR/0298) The
Parliament calls on the Commission, in light of repeated error concentration in
a few Member States, to assume greater and more substantial responsibility for
safeguarding the Union budget against financial losses.
Commission's
response:
In his
letter to the Discharge Rapporteur, Mr Pieper, and the Chairman of CONT, Mr
Theurer, on 10 March 2014 (ARES(2014)s:443707), Commissioner Semeta has
outlined the salient points of the measures to assume greater and more
substantial responsibility for safeguarding the Union budget against financial
losses:
1) the
adoption and implementation of delegated acts governing areas under shared
management in which the systematic application of net financial corrections
will be further strengthened;
2) the
clear identification of Member States with serious system deficiencies and the
implementation of the Commission's multi-annual audit strategy through
on-the-spot re-performance work of national audit authorities controls,
including at the level of beneficiaries and the direct audit of programmes or
authorities assessed by the EC as not sufficiently addressing the high risks
identified;
3)
addressing the detected problems through action plans and extensive
reservations in the DGs' Annual Activity Reports;
4)
reinforced supervision and controls of Member States through intensified
quality checks of national control and audit reports, audits of national
authorities and final recipients, effective and timely interruptions and
suspensions of payments as immediate response to detected weaknesses and
effective procedures for net financial corrections.
The EC
commits itself to regularly reporting on the implementation of these measures.
Furthermore,
new additional protective instruments will be introduced during the coming
2014-2020 programming period. The Commission is actively promoting the use of
simplified cost options: 
-         Simplified
cost options reduce the administrative burden for the public administration and
for beneficiaries. 
-         The
European Court of Auditors did not for the DAS 2012 find any error in the 26%
of ESF operations using these simplified options, whilst for the rest, the
frequency of errors (big or small) was about 40%. 
-         Projects
using simplified cost options place a greater focus on results and performance,
as opposed to inputs.
The formal
certification of annual accounts once all national controls have been done,
combined with the 10% retention mechanism on interim payments, net corrections
when serious irregularities are detected once accounts have been accepted and
the requirement of annual management declarations by managing authorities are
meant to offset the risk that expenditure claimed are not legal and regular and
to improve accountability at national level.
2.           (§3 - 2012/PAR/0299) The
Parliament calls, therefore [in the 2012 financial year the error rate rose for
the third time in succession], on the Commission to apply Article 32(5) of the
Financial Regulation (EU, Euratom) No 966/2012 more strictly in case of a
persistently high level of error, and consequently to identify the weaknesses
in the control systems and take or propose appropriate action in terms of the
possible simplification, the further strengthening of control systems and the
redesign of programmes or delivery systems
Commission's
response:
See reply
to § 2012/PAR/0298.
Moreover,
the Commission services have maintained in the Cohesion area their vigilance,
since interruptions and suspensions of payments are a useful preventive tool
for the proper spending of the EU funds. In 2013, the Commission opened 265
interruption cases (2012: 116) with a value of almost EUR 5 billion.
3.           (§4 - 2012/PAR/0300) The
Parliament urges all relevant actors involved in Union decision-making to
simplify further, notably by drafting eligibility rules that are simple and
verifiable, cutting red tape and devising appropriate and effective controls.
Commission's
response:
The
Commission notes that under shared management, Member States draft the
eligibility rules for programmes, within the limits set out in the
Fund-specific Regulations.
As far as
the Commission's competence is concerned, it has taken the recommended action.
Key elements of the 2014-2020 reform emphasize on simplification, particularly
for Member States.
The
2014-2020 framework contributes to cutting red tape and simplifying the use of
EU Funds. A common set of rules for all European Structural and Investment
Funds (ESIF) simplifies management particularly for beneficiaries who implement
operations under more than one Fund. Synergies with other EU policies rules
(e.g. research) are also foreseen.
From 2014
onwards, audit and control in the ERDF, ESF and the Cohesion Fund will be more
proportionate to both the amount of funds that are actually received and also
to the possible level of risk that investment could be misused or incorrectly
spent. Commission audit work will be focused on the more risk-prone areas. In
the case of well performing audit authorities, the Commission will limit its
audits where national delivery systems work well. Proportional control rules
will exclude repetition of audits by EU and national audit bodies to the same
operations, except for the purpose of commission re-performance to test the
work of audit authorities.
The wider
use of simplified costs options within ESIF is encouraged, which enables to
simplify financial management of operations while shifting the focus of
beneficiaries on the delivery of quality outputs and results.
With
simpler and clearer rules, legal certainly for beneficiaries will be
reinforced, and with increased proportionality for small programmes and
operations, their administrative burden will be adjusted to a lower level of
risk. More targeted reporting requirements are defined, as reporting is focused
on key indicators and hard data on progress made on the ground, and a
requirement for electronic information exchange with beneficiaries by the end
of 2015 under cohesion policy (“e-cohesion”) has been set.
Furthermore,
proportionality and reduction of the administrative burden are amongst the
general principles regulating the intervention of the ESIF under the 2014-2020
programming period as set out in Article 4 of the Common Provisions Regulation.
The main
tool to simplify and to streamline national eligibility rules is the use of
Simplified Cost options (SCOs). In November 2013 the Commission produced a
report on "Simplification and gold-plating in the ESF" identifying
the main sources of error due to unnecessary complicated national eligibility
rules and addressing some recommendations to the Member States, based in
particular on the use of SCOs. 
The use of
SCOs is particularly suitable for the type of expenditures reimbursed in ESF
projects. The Commission actively promoted their use through seminars which
were held by DG EMPL in all MS and also by introducing provisions in the
2014-2020 Structural Funds Regulation which will strengthen and encourage their
use. This will enable simplifying financial management of operations while
shifting the focus of beneficiaries to the delivery of quality outputs and
results. The Commission also regularly invites the managing authorities to
address guidance to beneficiaries on eligibility issues. The Commission fixed as
a target the use of SCOs to go up to +- 50% of ESF transactions by 2017.
Under the
EAFRD, the new obligation to conduct an ex-ante assessment of the verifiability
and controllability of rural development measures will further support the
establishment of simpler and better targeted programmes, which are easier to
control and implement.
With
regards to the EAGF, the CAP reform 2014-2020 provides a framework for setting
up direct payment schemes which are both effective and controllable. The reform
package also includes delegated and implementing legislation related to the
Integrated Administration and Control System (IACS). Although under the shared
management system it is up to MS to set up appropriate administration and
control structures to ensure that funds are correctly spent and to define clear
rules and procedures for beneficiaries, the Commission actively supports MS in
the implementation of direct payments also by providing detailed guidance
documents, dissemination of best practices among MS, organisation of expert
seminars and other means.
4.           (§5 - 2012/PAR/0301) The
Parliament urges the Commission therefore [eight Member States are responsible
for 90 % of the financial corrections in the fields under shared management] to
direct its particular attention to those countries.
Commission's
response:
The
Commission has taken the recommended action. In the area of Regional and urban
policy, in addition to the enquiry to review the audit authorities’ work, in
some cases the Commission may identify that certain deficiencies could remain
undetected or not timely detected, which could jeopardise the assurance process
(assurance gap). The scope of such audits is to "Bridge the assurance
gap" and to cover high risk operational programmes and part of operational
programmes. Audits are mainly focused on the reliability of management
verifications at the level of the managing authorities/intermediary bodies (59%
of these risk-based audits), and to a lesser extent on selection of operations,
corrective capacity of the managing authority, certification of expenditure by
the certifying authority, and on the audit of high risk operations not yet
audited by the national audit authority. A total of 77 audit missions have been
carried out since 2010 covering 15 Members States and 70 operational
programmes, including at the level of beneficiaries (see DG REGIO Annual
Activity Report 2013, page 41 and Annex 8). 
As a
result of the 77 audits carried out, the impact on payments has been that for
58 programmes, payments have been interrupted or (pre)suspended or warning
letters have been sent to prevent declaration of irregular expenditure. This
demonstrates that the enquiry has enabled DG REGIO to effectively address
previous years' discharge request that it should systematically interrupt and
suspend payments to the programmes when serious deficiencies are identified in
management verifications. In such cases, as recommended by the Discharge
authority, payments have been resumed in 2013 only where there was sufficient
and reliable evidence that weaknesses had been remedied. The audit enquiry
"Bridging the assurance gap" has proven to be a pro-active response
to increase the assurance.
The
implementation of preventive and corrective measures such as remedial actions
plans, interruptions and financial corrections has led to improvements in the
systems of programmes put under reservation, ensuring that past and future
expenditure declared to the Commission is legal and regular. The same approach
will be implemented to address and follow-up the reservations in the 2013
Annual Activity report of the Directorate General for Regional and Urban
Policy.
In the
area of Employment and Social affairs DG EMPL's audit strategy aims to provide
reasonable assurance that the management and control systems established by
Member States comply with the requirements of the regulations and are
functioning effectively.
In 2013,
70 missions have been performed by EMPL auditors for the ESF 2007-2013
programming period focusing on three main issues:
- the
enquiry related to the ACR re-performance, which is the key element to give the
assurance to DG EMPL that the results of the ACRs from the AAs are reliable;
- audit of
programmes put in reservation in the 2012 AAR; In 2013, for 24 out 27,
programmes in reservation an audit mission was planned; Depending on the issues
linked to each programme, the missions were a fact-finding, a follow-up, a
system and projects audit or a review of the AA;
- a
thematic audit on management verifications, following the European Court of
Auditors annual report’s findings that in the area of Employment and Social
Affairs 76 % and 67 % of the errors detected in 2011 and in 2012 respectively,
should have been detected by the Managing Authorities, through their first
level checks ; DG EMPL audit plan in 2013 included 8 missions for this specific
thematic audit on Management Verifications; A report on the results of these
audits including recommendations addressed to Member States to improve their
management verifications, was sent to the EP in November 2013.
On the
preventive side, as recognized by the ECA in its 2012 Annual report, the main
tool to simplify and to streamline national eligibility rules is the use of
Simplified Cost options (SCOs). In its audits on ESF the Court did not detect
any error related to the use of SCOs (6.23) and concluded that more extensive
use of SCOs would have a positive impact on the error rate.
In
November 2013 the Commission produced a report on "Simplification and
gold-plating in the ESF" identifying the main sources of error due to
unnecessary complicated national eligibility rules and addressing some
recommendations to the Member States, based in particular on the use of SCOs. 
The use of
SCOs is particularly suitable for the type of expenditures reimbursed in ESF
projects. The Commission actively promoted their use through seminars which
were held by DG EMPL in all MS and also by introducing provisions in the
2014-2020 Structural Funds Regulation which will strengthen and encourage their
use. This will enable simplifying financial management of operations while
shifting the focus of beneficiaries on the delivery of quality outputs and
results. The Commission also regularly invites the managing authorities to address
guidance to beneficiaries on eligibility issues. The Commission fixed as a
target the use of SCOs to go up to +-50% of ESF transactions by 2017.
DG AGRI
audit activities are driven by a central risk analysis covering all CAP
expenditure in all MS. Any predefined special focus on specific paying agencies
would reduce the scope of the Commission's audit work.
5.           (§8 - 2012/PAR/0302) The
Parliament calls for a more detailed annual assessment of the situation [the situation
regarding financial adjustments in the individual Member States] in each of
them, indicating how much money could actually be channelled back into the
Union budget.
Commission's
response:
This will
be included in the communication on the protection of the Union budget in
September 2014.
6.           (§15 - 2012/PAR/0303) The
Parliament asks the Commission to submit without delay a proposal on limiting
if not banning replacement projects all together.
Commission's
response:
The
regulatory framework for the 2014-2020 period, recently adopted in December
2013 provides for rules for net financial corrections. Legislative proposals
for the 2021-2028 period will only be drafted after 2017.
.
Commission’s
Reservations, reasons for binding commitments
7.           (§19 - 2012/PAR/0304) The
Parliament urges all relevant actors involved in Union decision making to
increase efficiency, notably by drafting eligibility rules that are simple and
verifiable, by establishing clear rules and procedures for accessing the Union
funds, by cutting red tape and by devising appropriate and cost effective
controls.
Commission's
response:
See reply
§4 – 2012/PAR/300
8.           (§21 - 2012/PAR/0305) The
Parliament expects significant improvements in this regard [for years the
majority of the errors identified by the Court of Auditors ought to be have
been identified by the Member States themselves] in the funding period
2014-2020.
Commission's
response:
The
Commission has taken the recommended action and refers to the design of the
delivery system for 2014-2020 programming period. 
The key
elements of the 2014-2020 reform are related to ensuring better spending and
better programme governance to ensure a more error-safe environment. This will
include increased result orientation and performance, ex-ante conditionalities
to be fulfilled at the start of implementation for each programme,
simplification, particularly for beneficiaries and harmonised and simplified
eligibility rules. 
The Common
Provisions Regulation for the 2014-2020 programming period also contains
reinforced control provisions and requirements compared to the 2007-2013 period
that will improve the Member States’ accountability so as to better address
errors and ensure legality and regularity of co-financed expenditure each year
before certifying the programme accounts to the Commission.
As regards
the assessment of the first-level checks for 2007-2013 the Commission considers
it is already carrying out such assessment since 2010 through targeted audits
on high risk programmes in the frame of its audit enquiry "Bridging the
assurance gap". Results of these risk-based audits by end 2013 were
submitted to the European Parliament in the context of the 2012 Discharge and
are presented in the AAR of DG Regional and Urban Policy (see page 41 and
Annexe 8).
As regards
agriculture, DG AGRI is currently implementing the requirement in the new
Financial Regulation that the Certifying bodies have to issue an opinion on the
legality and regularity of MS transactions. If correctly done, this new
assurance model will reinforce the work of the Certifying bodies and provide
the Commission with a much more reliable picture of the quality of MS control
systems, including reported control statistics and error rates. In the meantime
and as recommended by ECA, DG AGRI applies a new approach to estimate the
residual error rates that takes into account all available information, notably
audits from both DG AGRI and ECA in the last 3 years. The potential impact of
the identified deficiencies on the error rate is estimated and added as a
top-up to the error rate reported by the Member State concerned at the level of
each paying agency, resulting in a more realistic and more precise estimate of
the residual error rate. Applied to direct payments for the AAR 2012, the
methodology has been further developed and extended to the whole CAP
expenditure in the AAR 2013.
9.           (§25 - 2012/PAR/0306) The
Parliament deems it a priority that the Commission proves to Parliament in the
case of reservations in which way convincing remedial measures have been taken
to overcome the latter's concerns [reservation in areas for which it has not
received adequate assurance from the Commission and/or the Court of Auditors to
refute its concerns].
Commission's
response:
The
Commission services have maintained in the Cohesion area their vigilance, since
interruptions and suspensions of payments are a useful preventive tool for the
proper spending of the EU funds. In 2013, the Commission opened 265
interruption cases (2012: 116) with a value of almost EUR 5 billion.
For the
ESF in 2013 alone 25 payment claims have been interrupted and 13 suspension cases
handled.
Regarding
the Regional and Cohesion Funds, cumulative financial corrections for the
programming period 2000-2006, which is now in the closure phase, total about
7,2 billion euro. This corresponds to 3,7 % of the total contribution (197
billion euro).
For 2013
the total amount of financial corrections and recoveries implemented is 3.4
billion euro, which corresponds to 2,4 % of the payments made.
The
average amount of financial corrections and recoveries implemented per year by
the Commission during the period 2009 to 2012 was EUR 2.6 billion or 2% of the
average amount of payments from the EU budget of EUR 127.2 billion.
For the
CAP, a reservation is lifted only once the Commission has obtained reliable
evidence that the weaknesses have been remedied through the implementation of
appropriate actions by the MS, and assurance that the irregular expenditure
declared in the past are or will be corrected (net financial corrections) under
the conformity clearance procedure,. A reservation always goes hand in hand
with a clear action plan to tackle the problem identified in the management of
EU funds. The Commission follows up these reservations and the corresponding
action plans by monitoring the progress of the underlying work to implement
them.
In 2013
the Commission adopted 4 conformity clearance decisions in Agricultural area,
covering 147 individual net financial corrections for a total amount of 1,1
billion EUR (2 % of the CAP expenditure budgeted for 2013). To be noted that
the average amount of net financial corrections executed over the past three
years for direct aid amount to 332 million EUR and for Rural Development to
around 109 million EUR. Where undue payments are or can be identified as a
result of conformity clearance procedures, MS are required to follow them up by
recovery actions against the final beneficiaries. However, even where this is
not possible, net financial corrections are an important means to induce Member
States to improve their management and control systems and, thus, to prevent or
detect and recover irregular payments from final beneficiaries. In 2013, the
amounts recovered from beneficiaries amounted to 94 million EUR for direct aid
and 98 million EUR for Rural Development.
10.         (§29 - 2012/PAR/0307) The
Parliament supports the Commission in its approach [concerning financial
corrections], and calls for the systems to be improved in any way possible,
including the provision of training to staff, in order to enhance their
effectiveness and rapidity.
Commission's
response:
The
requested actions have been taken. The rules governing the conformity
procedure, established in an implementing act were adopted on August 2014.
Under the
Common Agricultural Policy (CAP) legal framework, net corrections have been
applied since the first clearance of accounts decision in 1976 and will
continue being applied for both European Agricultural Guarantee Fund (EAGF) and
European Agricultural Fund for Rural Development (EAFRD). 
Any
identified irregular expenditure or deficiency in the primary controls carried
out by a Member State systematically triggers the opening of a conformity
procedure that results, after a contradictory and a conciliation phase, in a
proportionate and net financial correction that protects the EU budget against
the identified risk. Every year the Commission adopts between 2 and 4
conformity clearance decisions on a package of individual financial
corrections. In 2013 the Commission adopted 4 such decisions, covering 147
individual net financial corrections for a total amount of 1,1 billion EUR (2 %
of the CAP expenditure budgeted for 2013). 
The
Commission continues its efforts to streamline the procedure for financial
corrections. 
Firstly,
the new CAP Horizontal Regulation Reg. 1306/2013 (which was adopted by the
European Parliament and the Council on 17 December 2013) describes more clearly
the nature, scope and sequence of the successive steps. For instance, it
establishes a clear demarcation between the contradictory phase, during which
the Member State is responsible for providing all information (facts and
arguments) that may contradict the initial findings of the Commission, and the
conciliation phase during which only information made available in the previous
steps of the conformity procedure may be considered. It also describes the
three different types of financial corrections and the conditions for using
them. For instance, flat rate corrections shall be applied in cases where the Member State has not provided to the Commission the information that would be necessary for to
identify more precisely the financial damage to the Union.
Secondly,
provisions in the delegated act set out more precisely the method and criteria
for calculating the financial correction in due proportion to the risk of
irregular expenditures. For instance more stringent rules and higher net
financial corrections will apply where there are three or more different
deficiencies in a control system. Commission guidelines will further detail the
more technical elements. 
Thirdly,
the rules governing the conformity procedure, established in an implementing
act to be formally adopted in July 2014, provide for mandatory deadlines for
both the Commission and the Member States at each step of the conformity procedure.
DG AGRI already implements a closer monitoring of the management of the
procedural delays. 
Finally,
in order to enhance the effectiveness of the audit work carried out by DG AGRI
an audit training program was incorporated in the DG AGRI's strategic training
framework from 2013. This program includes, notably, actual certification of
all auditors.
11.         (§30 - 2012/PAR/0308) The
Parliament would like to be informed on the total amount of the Union's
subsidies, grants and other financial instruments that were spent in setting up
and improving the LPIS system since the decision was taken, if possible divided
by Member-State.
Commission's
response:
This request
would require doing an analysis of relevant EU expenditure going back to 1992
when IACS was put in place. The resources that would have to be deployed to
obtain this figure would be disproportionate to the potential insights that
could be gained from it.
However,
what can be noted is that, since 2007, the amounts financed by the EAGF for the
acquisition of satellite imagery for checks, which is also used for the Land
Parcel Identification System (LPIS), are on average around EUR 6.5 million per
year.
12.         (§31 - 2012/PAR/0309) The
Parliament calls on the Commission to offset the entire financial risk of such
errors [errors detected in 2006 by the Court of Auditors in France and Portugal and confirmed by the Commission in 2008] in the Union budget through net
corrections.
Commission's
response:
The
Commission is taking the requested actions, but it would like to emphasize that
their accomplishment depends to a large extent on the progress made by the MS
in addressing the deficiencies (for example through action plans). 
The Court
confirmed in its Annual Report 2008 that EAGF expenditure was free from
material error (cf. paragraph 5.62). As regards the IACS, the Court reiterated
that it "generally is an effective and control system for limiting the
risk of irregular expenditure" (cf. paragraph 5.64).
The
Commission has taken the following measures to address the deficiencies in the
functioning of the national system in Portugal and France:
In Portugal: an action plan was launched in 2010 and reinforced in 2011. Audit missions carried
out in 2013 confirmed that the action plan had been implemented and that the
LPIS deficiencies had been addressed for claim year 2013. The results, in
respect of the error rate, will be measurable by mid-2014 i.e. final payments
for claim year 2013. While the deficiencies identified persevered for several
years, the EU budget was protected via the conformity clearance procedures
which ensured the claw back of over 100 million EUR in net financial
corrections for the claim years 2006 to 2008. For the subsequent claim years,
conformity clearance procedures are on-going in order to ensure that any undue
expenditure is recovered:
- Claim
years 2009-11: finalization of clearance procedure expected by end-2014; 
- Claim
year 2012: finalization of clearance procedure expected by mid-2015.
In France prior to 2008 no serious deficiencies were detected which would have merited a
reservation, an action plan or significant financial corrections. As
deficiencies were detected from 2008, a number of significant financial
corrections have been proposed in respect of financial years 2008-2010 for
which the clearance of accounts procedure is very advanced. Conformity
procedures are also ongoing for the subsequent years. In addition, in the
meantime (in 2013) an ambitious and thorough action plan for France has been set up to cover the weaknesses in the LPIS, the controls of
cross-compliance, and the controls for non-area coupled aids. A mission carried
out in February 2014 showed that while the plan is on track, some intermediate
commitments have not been met. Consequently, France has been requested to
tackle these issues and at the same time a more detailed reporting has been
requested so as to enable a more hands-on follow-up by DG AGRI.
13.         (§32 - 2012/PAR/0310) The
Parliament observes that the conformity clearance procedures take far too long
to protect the Union budget effectively; regrets the administrative capacities
that have been frozen for years and the loss in revenue and interest to the EU
budget.
Commission's
response:
The
Commission has taken the requested actions to shorten the conformity procedure;
however, it does not agree that the existing conformity procedure led to a loss
in revenues and interest to the EU budget. 
The
conformity procedure (indispensable before making net financial corrections)
requires certain steps to be applied in sequence as established in Regulation
EC No 1306/2013. The contradictory phase constitutes the core part of a
standard conformity clearance procedure; it aims at making it possible for the Member State to provide the Commission with any information that would contradict its
initial findings. In addition, a conciliation phase might be requested by the Member State, in cases where the Member State does not agree with the conclusions of the
Commission. These two phases aim at ensuring the right of the Member State to an actual contradictory process
However,
in order to ensure that the conformity clearance procedure is concluded within
a reasonable period of time, it is appropriate to lay down specific
time-periods for the different stages of the procedure to be respected by the
Commission and the Member State concerned. This is the reason why the rules
governing the conformity procedure, established in an implementing act formally
adopted on 6 August 2014, provide for mandatory deadlines for both the
Commission and the Member States at each step of the conformity procedure. DG
AGRI already implements a closer monitoring of the management of the procedural
delays. 
The
protection of the EU budget is hence furthermore secured through the
streamlined conformity procedure. 
The
Commission does not share the view that the delays of the conformity procedure
lead to a loss in revenue and interest to the EU budget. The Commission
systematically initiates a conformity clearance procedure if an audit reveals
deficiencies in the functioning of the national control systems, in view of
determining whether to impose a net financial correction. Financial corrections
are systematically determined on the basis of the nature and gravity of the
infringement and the financial damage caused to the EU budget. Where possible,
the amount is calculated on the basis of the loss actually caused or on the
basis of an extrapolation. Where this is not possible, flat-rates are used
which take account of the severity of the deficiencies in the national
management and control systems in order to reflect the financial risk for the
EU. Therefore, it cannot be concluded that delays at any step in the conformity
procedure could possible trigger a loss in revenue and interest to the EU
budget.
14.         (§33 - 2012/PAR/0311) The
Parliament expects remedial action of the Commission to ensure that the absence
of sufficient controls does not lead to unfair distortion of competition
between organic and conventional farmers.
Commission's
response:
The
Commission is making constant efforts to reinforce controls on organic
production and labelling of organic products, including through legal
provisions. 
Commission
Regulation (EU) No 392/2013 of 29 April 2013, amending Regulation (EC) No
889/2008 with the implementing rules on controls, clarifies a number of terms
that had led to diverging practices across Member States, establishes as from 1
January 2014 a minimum number of samples to be taken and analysed by the
control authorities or control bodies, and sets out as from the same date
specific requirements for the supervision of control bodies with a view to ensuring
an enhanced application of the organic control system in the Union.
The
Commission considered the need for further remedial action on the management
and control system for organic production and labelling of organic products in
its proposal for a Regulation of the European Parliament and of the Council on
organic production and labelling of organic products, amending the Official
controls Regulation and repealing Regulation (EC) No 834/2007, which has been
adopted on 24 March 2014.
15.         (§38 - 2012/PAR/0312) The
Parliament observes that the Commission does not conduct enough random sample
audits of its own at national management authorities and final beneficiaries.
Commission's
response:
The
Commission disagrees with the observation. It carries out its own audits
directly at the level of the risky managing authorities/intermediate bodies and
beneficiaries. A summary report on the results of the 77 audits carried out
since November 2010 until end 2013 covering 15 Members States and 7 Regions in
Italy for around 70 operational programmes considered by REGIO as at risk was
sent to the rapporteur in December 2013. Almost all these audits have led to
action plans and payment interruptions by DG REGIO. Between 2009 and 2013, DG
EMPL has carried out 87 system audits focused on riskiest OPs and in
significant number of cases these have led to interruption/suspension
procedures as disclosed in EMPL AAR.
See also
reply to 2012/PAR/0301.
16.         (§39, 2nd indent -
2012/PAR/0313) The Commission must perform more audits of final
beneficiaries and authorising authorities in year ‘n’ in Member States where
shortcomings have been found in administrative and audit systems in year ‘n-1’.
Commission's
response:
The
Commission has taken the recommended action and included in its audit strategy
for cohesion policy focused and risk-based audits enquiries to tackle
shortcomings at the level of managing authorities.
See reply
§ 5 – 2012/PAR/301
17.         (§39, 3rd indent -
2012/PAR/0314) The Commission must commit itself to audit all
operational programmes at least once in the course of the programming period.
Commission's
response:
The
request is not in line with the concepts of single audit, cost-efficiency in
the use of limited audit resources and the rapporteur's request and objective
to target Commission's audits to risky programmes, as we currently do. The
single audit approach as proposed by the ECA since 2004 allows the Commission
to have audit results and opinions for each programme every year as from the
start of the programming period. The Commission has to ensure that audit
authorities' work is reliable.
18.         (§39, 4th indent -
2012/PAR/0315) The Commission must report in time for the 2013
discharge procedure on the operational applicability of the term “serious
deficiencies” in the delegated act and on the net financial corrections it
generated.
Commission's
response:
The Commission
has adopted delegated acts governing areas under shared management under the
new Multiannual Financial Framework (MFF) 2014-2020. The delegated act based on
the CPR provides detailed rules to enable the mechanism of financial
corrections to work effectively by defining clearly the criteria for
determining "serious deficiencies" which trigger the procedure for
net financial corrections (NFC) (see Article 30 of Commission delegated
regulation 480/2014 of 3 March 2014).
Binding
commitments to be made
19.         (§40 - 2012/PAR/0316) The
Parliament calls on the Commission, in the area of agricultural policy, for
conformity clearance procedures in standard cases to be completed in less than
two years, as foreseen in the Commission’s internal benchmarking adopted more
than 15 years ago.
Commission's
response:
The
Commission is, through the new legal framework of the CAP, is taking actions
aiming at streamlining the whole procedure and limiting the risk of unnecessary
delays. In particular, deadlines for each step of the procedure are introduced
for both Member States and the Commission in the implementing act adopted on 6
August 2014.
However,
while there is scope for significantly speeding up the conformity procedure so
that in the simplest cases the conformity procedure can be managed in two
years, there can be no guarantee that each and every single case can be managed
in less than two years. For more complex cases the two phases of the conformity
procedure (contradictory followed by conciliation), the respect of the Member
State's right to challenge the Commission's findings and the need for the
correction to be in proportion to the seriousness of the deficiency will not
always make it possible to manage the procedure in less than two years.
The
Commission would in this respect also like to point out that the benchmarking
referred to in the Art 34 of the draft Implementing Regulation should rather be
used as a parameter against which MS and Commission practice is to be assessed.
20.         (§41 - 2012/PAR/0317) The
Parliament calls on the Commission, in the field of agriculture, to resolve
without delay the problems occurring in Paying Agencies whose residual risk of
error lies above the materiality threshold of 2% as identified by the
Commission; suggests to focus its efforts especially on the Paying Agencies in
France, Bulgaria, Romania, Portugal and Latvia.
Commission's
response:
The
Commission intends to take those actions referred to below. The reason for this
is that, in the framework of shared management, as set out in the Financial
Regulation and the rules on the financing of the CAP, it is the Member State,
which has to assume the primary responsibility for ensuring that actions
financed by the budget are implemented correctly in accordance with the rules.
The role
of the Commission under shared management consists rather in an overall
supervision, by verifying the effective functioning of MS's management and
control systems through conformity clearance procedures and applying net
financial corrections to protect the EU budget. 
In
addition, the Commission doesn't have the resources to handle every year about
50 million transactions (over 60 billion EUR) for 8 million final
beneficiaries. Therefore, DG AGRI audit activities are driven by a central risk
analysis (i.e. more audits focus on MSs, measures and programmes affected by
higher risks) covering all CAP expenditure in all MS. DG AGRI opens each year
around 250 audits on the effectiveness of the paying agencies' management and
control systems, and carries out around 120 audit missions on the compliance
with the EU rules. As a result, the Commission imposes net financial
corrections on the Member States which they reimburse to the EU budget any
irregular spending which has been identified. In 2013 the Commission adopted 4
conformity clearance decisions, covering 147 individual net financial
corrections for a total amount of 1,1 billion EUR (2 % of the CAP expenditure
budgeted for 2013).
Considering
the above, the Commission considers that the suggestion to focus on specific
paying agencies would arbitrarily reduce the scope of the audit work to be
carried out to address weaknesses. 
In its
2013 AAR, for paying agencies with an adjusted residual error rate between 2%
and 5%, DG AGRI assesses whether the risk is sufficiently covered by mitigating
factors and thus whether a financial reservation is necessary. This includes
whether there is an on-going conformity clearance procedure covering the expenditure
concerned and whether the necessary remedial actions have been implemented by
the MS concerned. PAs with an adjusted residual error rate above 5% were
subject to a reservation. DG AGRI made 62 reservations: 11 at measure level for
Market Measures, 20 (at paying agency level) for direct payments, and 31 at
paying agency level for rural development.
21.         (§42 - 2012/PAR/0318) The
Parliament calls, in order to remedy shortcomings in LPIS systems, for action
plans to be implemented promptly.
Commission's
response:
The
Commission is taking the requested action. The current procedure is to ask
Member States to draw up an action plan when significant deficiencies have been
identified in their LPIS. The state of play of implementation of these action
plans is subject to a reporting in DG Agriculture and Rural development's
Annual activity report (AAR). In addition, relevant information has been made
available to the Rapporteur (Cf also replies to requests 2012/PAR/0320,
2012/PAR/0341, and 2012/PAR/0381).
The first
course of action is nonetheless for the Member States to set up and promptly
implement such action plans. In addition, all Member States have to assess, on
an annual basis, the quality of their LPIS and adopt, where appropriate,
remedial actions (Cf article 6-2 of Commission Regulation (EC) No 1122/2009).
22.         (§42 - 2012/PAR/0319) The
Parliament calls, in the event of failure to comply with the deadlines set in
the action plans for proportional net financial corrections as part of the
conformity clearance procedure.
Commission's
response:
Any
identified risk to the EU budget systematically triggers a net financial
correction, to be applied proportionally to the risk to the EU budget in
function of the nature and gravity of the infringement and the loss to the EU
budget. Any delay in implementing the necessary remedial action prolongs the
duration of the identified risks of irregular payments and therefore triggers
systematically a higher net financial correction.
In
addition, following the entry into force of the CAP Horizontal Regulation No
1306/2013 a new legal framework provides for the possibility to, as an
additional preventive measure, suspend payments where the Commission concludes
that the MS concerned is not in a position to implement the necessary remedial
measures in accordance with an action plan based on clear progress indicators.
This represents a further incentive for the MS to speed up the implementation of
the action plans and to abide by the agreed deadlines for accomplishing the
corrective actions.
The
combination of preventive actions (interruption for EAFRD and suspensions for
both Funds) and net financial corrections where expenditure is paid in non-respect
of EU rules allows the Commission to act promptly and efficiently to protect
the EU budget.
23.         (§43 - 2012/PAR/0320) The
Parliament calls on the Commission to report on the state of play of the
implementation of the action plans for France and Portugal by 30 June 2014.
Commission's
response:
The
requested action has been taken. DG AGRI has reported on the implementation of
the action plans for Portugal and France in its Annual Activity Report 2013,
which will be published in mid-June 2014. The relevant information has already
been made available to the rapporteur.
For Portugal, the action plan was implemented in 2013. For France, the plan is expected to be
completed for claim year 2016. In the meantime, it is closely monitored by the
Commission services and the financial risk is fully covered by the ongoing
conformity clearance procedures.
24.         (§44 - 2012/PAR/0321) The
Parliament takes the view that recurrent land parcel identification
shortcomings must be met by progressively increasing corrective penalties well
beyond existing net and flat-rate corrections; calls for a Commission proposal
along these lines.
Commission's
response:
The
Commission will not be taking the requested action because it would require
reopening a regulation that has just been adopted by the two co-legislators in
the framework of the CAP reform. However, the increase in financial corrections
for recurrent violations of EU rules is already provided for and is applied in
all cases where there is enough evidence that the persistence of the
deficiencies is increasing the financial risk to the EU budget.
25.         (§45 - 2012/PAR/0322) The
Parliament calls on DG AGRI to develop and formalise its control strategy,
re-engineer its risk assessments according to the targets established, and
ensure proper monitoring through better quantitative and qualitative key
performance indicators whose disclosure in the Annual Activity Report should be
improved.
Commission's
response:
DG AGRI
adopted a new multi-annual audit strategy in March 2014.
This audit
strategy confirms the risk and system based approach, notably to achieve a
better audit coverage. A rolling three-year audit programme will apply from
July 2014. It will be reviewed periodically to take into account the
implementation of the CAP reform (e.g. new greening payments and associated
risk) and also the additional evidence that will be available from 2016 as a
result of the new work of the certification bodies on legality and regularity.
Key performance indicators on geographical coverage, expenditure coverage and
risk coverage are included in the strategy. They will be monitored and reported
upon in future AARs from AAR 2014.
26.         (§46 - 2012/PAR/0323) The
Parliament calls, in the field of regional policy, following the Commission's
and the Court of Auditors' recommendations, for the Member States to
drastically step up their first-level checks and render them more stringent.
Commission's
response:
The
Commission has taken the recommended action and included in its audit strategy
for cohesion policy focused and risk-based audits enquiries to tackle
shortcomings at the level of managing authorities. 
See reply
§ 5 – 2012/PAR/301
27.         (§47 - 2012/PAR/0324) The
Parliament calls on the Commission, in the activity reports of the
directorates-general, to report the extent to which Member States' control
statistics or audit reports have been examined, verified and validated and the
depth in which this has been done.
Commission's
response:
The
Commission has taken the recommended action and reported about its controls in
the AARs of the Directorates-General concerned.
28.         (§48 - 2012/PAR/0325) The
Parliament calls on the Commission, in its annual activity reports, to indicate
how its own risk analyses have influenced the use of its own audit capacities,
which countries were concerned and whether the shortcomings were remedied;
calls for more direct audits of random samples taken from national granting
authorities and final beneficiaries.
Commission's
response:
The term
"random samples" is misleading in this context, since the EP seems to
ask for risk based audits. The Commission is sampling on a risk base.
The
Commission has taken the requested action and reported in the AARs of the
Directorates-General concerned on the audits carried out. In the area of
cohesion, audit resources are annually deployed on the basis of a comprehensive
risk analysis. The audit work is generally focused on two main areas, i.e. (i)
the re-performance of Audit Authorities' work and, (ii) system related audit
work (generally verification of management verifications). Both types always
include the audit of a sample of beneficiaries and operations. The audits which
lead to a negative assessment of the systems systematically give rise to
interruption or suspension procedures.
Concerning
the request to increase the audits on managing authorities, please see reply to
2012/PAR/0323.
As regards
Agriculture, each year the Commission opens around 250 audits on the
effectiveness of the paying agencies' management and control systems, and
carries out around 120 audit missions on the compliance with the EU rules.
These audit activities are driven by a central risk analysis (i.e. more audits
focus on MSs, measures and programmes affected by higher risks) covering all
CAP expenditure in all MS. The additional staff required for carrying out
direct audits based on a random sample on a scale that would allow an
extrapolation of the results would far exceed the staff that could be
redeployed and/or freed by reducing the number of audits in MS with low error
rates. See also reply to 2012/PAR/0333.
29.         (§49 - 2012/PAR/0326) The
Parliament stresses that the guidelines for audits by the Commission itself
ought to constitute a self-imposed obligation on the Commission; calls on the
Commission already to present them as part of the 2013 discharge procedure;
calls for clear indications, to this end, of the extent to which Member States
and programmes which have attracted attention in the past have been subjected
to a special audit approach and the extent to which net financial corrections
can be accelerated.
Commission's
response:
The
Commission has taken the requested action.
As regards
Cohesion, The "guidelines for audits" is understood as the Commission
audit strategy for the 2014-2020 period, which was drafted as a single audit
strategy for ERDF, ESF, CF and EMFF for the years 2014/2015 and finalised on
15/04/2014 (Ares(2014)1192851), i.e. in time for the 2013 discharge.
The
"special audit approach" is understood as a risk based audit approach
and in embedded in the above mentioned audit strategy. Please see reply to
2012/PAR/0323.
The
request to indicate "the extent to which net financial corrections can be
accelerated" is unclear. The Commission has committed itself in the 2008
Action Plan that contradictory procedures related to financial corrections have
to be finalised within 24 months after the audit. The Commission is meeting
this objective.
In the
area of agriculture, from the beginning of 2016 (in respect of financial year
2015), Certifying Bodies (CB) will report on the legality and regularity of the
expenditure for which reimbursement was requested from the Commission to a much
greater extent than has been the case under the previous and current regulatory
frameworks. In practice, this means that CBs will be required to verify the
results of on-the-spot checks carried out by the PAs. Detailed guidelines on
the audit methodology for the CB have been prepared with the MS and were made
available on 15/01/2014. DG AGRI's audit strategy provides for a specific audit
work from 2015 in order to check the reliability of the opinion delivered by
the CBs.
In
addition, the Commission is taking actions aiming at streamlining the whole
procedure and limiting the risk of unnecessary delays through the new legal
framework of the CAP. In particular, some steps of the existing contradictory
procedure will be merged, deadlines for each step of the procedure are
introduced for both Commission and Member States, and if a Member State does not send the required information in time the Commission will be able to
proceed to the next step on the basis of the information available. The
Commission will endeavour to limit the maximum duration of the whole conformity
clearance procedure to the strict minimum necessary, while respecting the
different stages of the conformity procedure (i.e. contradictory and
conciliation) required by the relevant regulations; for standard cases the
procedure will be accomplished in maximum two years.
30.         (§50 - 2012/PAR/0327) The
Parliament expects that the Commission improves its own checks on the audit
authorities' annual control reports, to ensure that auditors are able to reach
conclusions on the impact of the reliability of error rates from Member States'
audits and to strengthen its assurance process.
Commission's
response:
The
Commission has taken the requested action. The Commission reviews the work of
audit authorities, including through re-performance of audits of operations
already audited by the audit authorities. In the context of the analysis of the
ACRs, the Commission requests from audit authorities specific underlying or
complementary information, including in the context of its on-the-spot
fact-finding missions, when necessary for the assessment of reported error
rates, and in case of specific risks.
The
Commission's assessment of the reported error rates is to be seen in the
context of the assurance it has obtained since 2009 through its review of the
work of audit authorities, which includes re-performance of audits of
operations already audited by the audit authorities. 
In
addition, further guidance on the treatment of errors has been provided to the
Audit Authorities in 2012-2013 and numerous technical meetings and seminars have
been organised by the Commission with all audit authorities in 2012-2013 in
order to further improve the audit sampling methodology used in preparation of
the ACRs.
In the
Agricultural area, the Commission is already verifying the quality of the
certification reports and opinions issued by the Certifying Bodies during the
annual financial clearance of accounts. Verifying the quality of the
certification reports is reinforced by the new strategic audit plan and annual
work programme. The reliability of the certification work remains for the
financing period 2014-2020 of a particular interest for DG AGRI, considering
that those results feed in the Central Risk Analysis (CRA) and constitute the
ground for calculating the residual error rates to be reported in the AAR and
to be used for DAS purposes.
31.         (§51 - 2012/PAR/0328) The
Parliament calls on the Commission to do everything in its power to shorten the
adversarial procedures preceding the imposition of net corrections or
interruptions of payments; calls on the Commission to submit a report and a
proposal on the subject.
Commission's
response:
The
Commission has taken the requested action. On the shortening of contradictory
procedures for financial corrections in the area of Cohesion policy, the
Commission has committed itself in the 2008 Action Plan that contradictory
procedures related to financial corrections have to be finalised within 24
months after the audit. The Commission is meeting this objective.
Concerning
"the adversarial procedures preceding the […] interruptions of
payments", the Commission points out that there is no adversarial
procedure to interrupt payment deadlines. An interruption is an administrative
act that takes place without such a procedure.
The
submitting of a proposal is understood as preparing the delegated acts. The
Commission has adopted delegated acts governing areas under shared management
under the new Multiannual Financial Framework (MFF) 2014-2020. The delegated
act based on the CPR provides detailed rules to enable the mechanism of
financial corrections to work effectively by defining clearly the criteria for
determining "serious deficiencies" which trigger the procedure for
net financial corrections (NFC) (see Article 30 of Commission delegated
regulation 480/2014 of 3 March 2014).
In the
area of agriculture, the Commission is taking actions aiming at streamlining
the whole procedure and limiting the risk of unnecessary delays through the new
legal framework of the CAP (notably, Article 34 of the draft Implementing
Regulation). In particular, some steps of the existing contradictory procedure
will be merged, deadlines for each step of the procedure are introduced for
both Commission and Member States, and if a Member State does not send the
required information in time the Commission will be able to proceed to the next
step on the basis of the information available. The Commission will endeavour
to limit the maximum duration of the whole conformity clearance procedure to
the strict minimum necessary, while respecting the different stages of the
conformity procedure (i.e. contradictory and conciliation) required by the
relevant regulations; for standard cases the procedure will be accomplished in
maximum two years.
32.         (§52 - 2012/PAR/0329) The
Parliament calls on the Commission to insert in the annual report on the
protection of the Union budget a chapter on net financial corrections per Member State.
Commission's
response:
The
Communication on the protection of the Union budget will provide information on
interruptions, suspensions, financial correctors and recoveries. In addition,
the Commission will include data on net financial corrections which lead to
assigned revenue for the EU budget and the results of Member States’ corrective
work.
33.         (§53 - 2012/PAR/0330) The
Parliament calls on the Commission to identify in the Communication on shared
fund management the three Member States with the highest error rates and
financial corrections, which will subsequently receive a hearing from the
discharge authority as part of the discharge procedure.
Commission's
response:
The
Commission has taken the requested action. The "Communication on shared
fund management" is understood as the communication on the protection of
the EU budget, adopted in September each year. There, financial corrections are
reported but no error rates. Error rates by Member States are reported in the
AARs of the Directorates-General concerned. Both documents, the AAR and the
report on the protection of the EU budged, contain information by Member State. The request concerning the hearing is addressed to the discharge authority.
34.         (§56, 1st indent - 2012/PAR/0331)
The Parliament asks that the DGs concerned should build up a new and
reinforced audit strategy to counter weaknesses found in in some Member States
as referred to in paragraphs 47, 48 and 49.
Commission's
response:
The
Commission has taken the requested action and put in place a new and reinforced
audit strategy for Agriculture (in May 2014) and a single audit strategy for
the 2014-2020 period for ERDF, ESF, CF and EMFF for the years 2014/2015
(Ares(2014)1192851) that cover the requests raised by the EP.
35.         (§56, 2nd indent -
2012/PAR/0332) The Parliament asks for intensification of quality
checks on Member-States audit and control reports as referred to in paragraphs
47 and 48.
Commission's
response:
The European
Court of Auditors (ECA) has for a number of years expressed concern that Member
States' statistics were understated and that the work requested of the
certification bodies was not sufficient to deliver a valid audit opinion on the
legality and regularity of the underlying transactions. In this context, it is
important to highlight the changes brought about by the new Horizontal
Regulation, No 1306/2013 insofar as the work of the Certification Bodies (CB)
is concerned (Art 9), and which amongst other things, are aimed at addressing
the Court of Auditors concerns. 
From the
beginning of 2016 (in respect of financial year 2015), CBs will report on the
legality and regularity of the expenditure for which reimbursement was
requested from the Commission to a much greater extent than has been the case
under the previous and current regulatory frameworks. In practice, this means
that CBs will be required to verify the results of on-the-spot checks carried
out by the PAs.
Detailed
guidelines on the audit methodology for the CB have been prepared with the MS
and were made available on 15/01/2014. DG AGRI's audit strategy provides for a
specific audit work from 2015 in order to check the reliability of the opinion
delivered by the CBs. If correctly done the opinion of the CBs on legality and
regularity will reinforce the overall assurance that can be drawn by DG AGRI on
the reliability of MS control systems including reported control statistics and
error rates.
In the
meantime and as recommended by ECA, DG AGRI applies a new approach to estimate
the residual error rates that takes into account all available information,
notably audits from both DG AGRI and ECA in the last 3 years. The potential
impact of the identified deficiencies on the error rate is estimated and added
as a top-up to the error rate reported by the Member State concerned at the
level of each paying agency, resulting in a more realistic and more precise
estimate of the residual error rate. Applied to direct payments for the AAR
2012, the methodology has been further developed and extended to the whole CAP
expenditure in the AAR 2013.
36.         (§56, 3rd indent -
2012/PAR/0333) The Parliament asks for an increase in the random
sampling based audits by the Commission in the spot and the more systematic use
of net financial corrections as referred to in paragraph 13.
Commission's
response:
The term
"random samples" is misleading in this context, since the EP seems to
ask for risk based audits (see request 2012/PAR/0325). The Commission is
sampling on a risk base.
Concerning
the request to increase the audits on managing authorities, please see reply to
2012/PAR/0323.
If
"random samples" is understood as statistical sampling, the requested
action is not being taken. The additional staff required for carrying out
direct audits based on a statistical sample on a scale that would allow an
extrapolation of the results would far exceed the staff that could be
redeployed and/or freed by reducing the number of audits in MS with low error
rates. Moreover, MS with low error rates are already less exposed to Commission
scrutiny based on the risk analysis. Reducing Commission controls further would
not be in line with the principles for a sound risk analysis and could lead to
financial risks to the budget.
As regards
net financial corrections for cohesion policy, the Commission has taken the
requested action. For the 2014-2020 programming period, under certain
conditions fixed in the regulation (Article 145(7)), the Commission must adopt
a decision of a net financial correction even if the Member State agrees to the
correction, thus removing the possibility for the Member State to re-use the
amount. There is no discretionary power for the Commission.
In the
Agricultural area, the audits will continue on a risk-based system. As the
risks identified may very much vary depending on the MS, measure, scheme,
paying agencies or control system at stake, a purely transaction-based
approach, on the basis of a fully representative and statistically valid
sample, appears less relevant than system-based and risk-based audits,
especially when considering also the existing audit resources and the large
number of transactions that such audits would have to cover. DG AGRI's
multiannual audit strategy for the 2014-2020 period maintains the risk based
approach and aims to achieve a better trade-off between risks and coverage: no
MS will be left out, but more risky MS will be audited more intensively.
As from
the FY 2015, the results of the audit work carried out by the certification
bodies on the legality and regularity of expenditure will be used in the
Agricultural area, based on a representative sample of transactions at the
level of final beneficiaries.
The
Commission will make systematic use of net financial corrections in case of
non-compliance with EU rules or inadequate control procedures, in order to
mitigate the risk of irregular expenditure. The introduction of deadlines for
the conformity clearance procedure in the area of agriculture (made possibly by
the new legal framework for the CAP) should reduce the time needed to decide on
these net financial corrections.
37.         (§56, 4th indent -
2012/PAR/0334) The Parliament asks for detailed rules in the CPR
delegated act to provide for definition of serious deficiencies and assessment
of key requirements for management and control systems as referred to in
paragraph 216.
Commission's
response:
See reply
§ 39, 4th indent – 2012/PAR/0315
38.         (§56, 5th indent -
2012/PAR/0335) The Parliament asks for the application of progressively
increasing payment reductions and administrative sanctions where eligibility
criteria have not been respected by the final beneficiary receiving direct payments
or rural development support and recurrent LPIS shortcomings.
Commission's
response:
The
Commission has taken the requested action. The current regulatory framework
carries forward a system of effective, dissuasive and proportionate penalties
when beneficiaries have not complied with the eligibility conditions. The
relevant delegated act was published on 20 June after the end of the scrutiny
period (Commission Delegated Regulation (EU) No 640/2014 supplementing
Regulation (EU) No 1306/2013 of the European Parliament and of the Council with
regard to the integrated administration and control system and conditions for
refusal or withdrawal of payments and administrative penalties applicable to
direct payments, rural development support and cross compliance). These
provisions should be applied by the Member States at the level of final
beneficiaries, and are without prejudice to financial corrections that the
Commission may impose on Member States in case deficiencies in their management
and control systems, including the LPIS, are identified. Moreover, where such
deficiencies are of a serious nature, the Commission may reduce or suspend
monthly and interim payments to Member State on the basis of Article 41 of the
new Horizontal Regulation (EU) No 1306/2013 on the financing, management and
monitoring of the CAP.
39.         (§56, 6th indent -
2012/PAR/0336) The Parliament asks for the suspension mechanism to be
used as an ex ante instrument for protection of the Union budget as referred to
in paragraph 42.
Commission's
response:
The
Commission will use the new mechanism for suspension established in Article 41
of Regulation No 1306/2013 of the European Parliament and of the Council on the
financing, management and monitoring of the CAP, as a new ex-ante instrument to
protect the EU Budget from weaknesses in the control system of the Member
States.
40.         (§56, 7th indent -
2012/PAR/0337) The Parliament asks that the use of interruptions, suspensions,
financial corrections, and recoveries will be detailed in the next annual
report on the protection of the Union budget, and specifically for structural
and cohesion funds in the reports for 2016 onwards as referred to in paragraph
52.
Commission's
response:
see
response to request 2012/PAR/0329
41.         (§56, 8th indent -
2012/PAR/0338) The Parliament asks that Annual Activity Reports (AARs)
from the DGs should include information on reservations regarding risk to the
Union budget and such reservations should only be lifted when the weaknesses
have been addressed through Member State action and correction of irregular
expenditure, and AARs also to error rate and residual risk estimates
particularly when Member States have carried out corrective actions.
Commission's
response:
The
Commission considers that the 2013 AARs include this information and confirms
the practice of lifting reservations.
Indeed,
the Commission reports the serious weaknesses identified in the execution of
the EU budget through reservations in the AARs of the Commission's
Directors-General and discloses the resulting risk for the EU budget. A
reservation always goes hand in hand with a clear action plan to tackle the
problem identified in the management of EU funds and, if the regulatory
conditions are met, the Commission may interrupt or suspend the respective
payments. The Commission follows up these reservations and the corresponding
action plans by monitoring the progress of the underlying work to implement
them. A reservation will be lifted only once the Commission has obtained
reliable evidence that the weaknesses have been addressed through the
implementation of appropriate actions by the Member State (MS) the appropriate
correction procedures have been launched, and the new system has proved its
reliability in practice.
AARs also
show in a transparent way how the Commission fulfils its responsibility with
regard to ensuring the legality and regularity of shared management policies,
at the level of individual MS and programmes (for Cohesion Policy) or paying
agencies (for Agriculture). In addition, the Commission presents estimates of
error rates and residual risks concerning paying agencies, measures or
programmes and MS to have an indication of the actual risk after the
implementation of corrective actions.
42.         (§56, 9th indent -
2012/PAR/0339) The Parliament asks that a new horizontal report should
be prepared on how new preventive and corrective tools are implemented under
the 2014-2020 MFF, and assessing any risk from the gap between the final
legislation compared to the Commission proposals.
Commission's
response:
The new
annual horizontal report analysing how the new preventive and corrective tools
are and will be implemented under the MFF 2014-2020 can only be made available
for the first time as of 2016. Before that, the timing of the adoption of the
corresponding legislative acts does not allow for an adequate assessment. The
ad hoc "gap assessment" report will be produced once in early 2015
and will show the main differences between the Commission's proposals and the
final legislative acts as adopted by the Legislative Authority, and it will
identify the potential risks that those differences may entail.
43.         (§56, 10th indent -
2012/PAR/0340) The Parliament asks that contradictory and conciliation
procedures should be streamlined so that the whole conformity procedure will be
shortened to two years in all standard cases as referred to in paragraph 40.
Commission's
response:
The
Commission is, through the new legal framework of the CAP, is taking actions
aiming at streamlining the whole procedure and limiting the risk of unnecessary
delays. In particular, deadlines for each step of the procedure are introduced
for both Member States and the Commission in the implementing act adopted on 6
August 2014.
However,
while there is scope for significantly speeding up the conformity procedure so
that in the simplest cases the conformity procedure can be managed in two
years, there can be no guarantee that each and every single case can be managed
in less than two years. For more complex cases the two phases of the conformity
procedure (contradictory followed by conciliation), the respect of the Member
State's right to challenge the Commission's findings and the need for the
correction to be in proportion to the seriousness of the deficiency will not
always make it possible to manage the procedure in less than two years.
The
Commission would in this respect also like to point out that the benchmarking
referred to in the Art 34 of the draft Implementing Regulation should rather be
used as a parameter against which MS and Commission practice is to be assessed.
44.         (§56, 11th indent -
2012/PAR/0341) The Parliament asks that, for France and Portugal, comprehensive action plans should be established in the field of agriculture in
among other the updating of their LPIS systems as requested in paragraph 44.
Commission's
response:
The
requested action has been taken. Comprehensive action plans have already been
established for both Portugal and France.
For Portugal, the action plan was implemented in 2013. For France, the plan is expected to be
completed for claim year 2016. In the meantime, it is closely monitored by the
Commission services and the financial risk is fully covered by the ongoing
conformity clearance procedures (Cf reply to request 2012/PAR/0320).
45.         (§56, 12th indent -
2012/PAR/0342) The Parliament asks for the introduction of a template
and recommendations for national management declarations.
Commission's
response:
The
Commission actively supported the introduction of national declarations during
the negotiations of the last revision of the Financial Regulation. As a result
of the negotiations, the new Financial Regulation of 25.10.2012 endorsed the
concept of additional declarations signed at the appropriate level, i.e.
national declarations (Art. 59.5).
Following
the conclusion of the legislative deliberations on the financial year 2011, a
dedicated working group on national declarations was established to develop
recommendations and a template for such national declarations. The group was
launched on 16 December 2013 by Commissioner Šemeta, together with MEP Jan
Mulder and the Council’s Lithuanian and Greek Presidencies. The documents
related to its activities are published at the following URL address:
http://ec.europa.eu/budget/biblio/documents/iwgnd/index_en.cfm
The
Commission also reported in the ECOFIN meeting of 18 February 2014 on the
results achieved by the working group so far. The working group has finalised
its work by the end of June 2014 and adopted on June 26 the recommendations for
the establishment and use of national declarations. Once adopted by the
Commission, the recommendations and templates will be transmitted to the EP,
the Council, the European Court of Auditors (ECA) and the national Parliaments.
46.         (§56, 13th indent -
2012/PAR/0343) The Parliament asks for limiting the option of replacing
projects affected by error with new projects before 15 February n+ 1.
Commission's
response:
The
regulatory framework for the 2014-2020 period, recently adopted in December
2013 provides for rules for net financial corrections. Legislative proposals
for the 2021-2028 period will only be drafted after 2017.
The
request calls for a review of the legislation adopted by the European Parliament
and Council only in December 2013.
47.         (§56, 14th indent -
2012/PAR/0344) The Parliament asks for making better use of RAL and
limiting the period covered by pre-financing.
Commission's
response:
This is
not possible due to the current legal set-up of the various programs. This
objective can only be achieved by first modifying the relevant regulations and
then by amending each individual agreement. More importantly, it should be
underlined that the prefinancing is a tool meant to provide our beneficiaries
with a float and to enable them to run the projects they have committed to. If
the period covered by prefinancing were to be shorter than the period of the
project, then the beneficiary would sooner or later run out of resources and
the project in question could eventually fail.
48.         (§56, 15th indent -
2012/PAR/0345) The Parliament asks that the Commission should reach
binding bilateral agreements with Member States which have attracted particular
attention, along the lines of the European Semester.
Commission's
response:
As
outlined in great detail in letters from President Barroso and Commissioner
Semeta regarding the Discharge 2012, the Commission has committed itself
already to address weaknesses in Member States. Commissioner Semeta's letter
provides a comprehensive outline of instruments and actions put in place to,
inter alia, identify Member States with serious systems deficiencies, how to
address the problems and how to report on the actions taken. This will be
possible within the existing legal framework put in place for the spending
programmes under the new financial framework. Different processes are put in
place to report on Europe 2020 which is a common endeavour of Member States and the Commission.
49.         (§58, §59 - 2012/PAR/0346)
The Parliament calls on the Commission to establish a registry for all
Union funds going to media in the Member States from the structural funds or
agricultural funds including rural development; calls on the Commission to
concentrate on those Member States which are vulnerable or conspicuous in this
respect.
Commission's
response:
The
Commission considers that the request is not operational enough in order to be
implemented. Under shared management in cohesion policy, the Commission does
not have information at project level.
However,
for agriculture and rural development, following the European Court of Justice
ruling of 9.11.2010 in cases C-92/09 and C-93/09 Volker und Markus Schecke GbR
and Hartmut Eifert, the EC has proposed to the European Parliament and Council
new provisions on Transparency. These are included in Chapter IV of Regulation
(EU) N° 1306/2013 of 17 December 2013). The purpose of the new provisions is to
make information about the beneficiaries of CAP payments accessible to the
public, together with details about the measures, the nature and purpose of the
CAP payments. This will enhance transparency regarding the use of Union funds in
the common agricultural policy and will improve the sound financial management
of these funds, in particular by reinforcing public control of the money used.
In order to cause the least interference with the beneficiaries’ right to
respect for their private life in general and to protection of their personal
data in particular, a threshold was set up as regards the amount of aid
received below which the name of the beneficiary should not be published. The
new rules will be applicable to payments made from financial year 2014, as from
31st May 2015.
50.         (§60 - 2012/PAR/0347) The
Parliament urges the Commission to establish the template for the management
declaration as soon as possible; reiterates in this respect the on-going work
of the interinstitutional working group on Member State Declarations which for
its result is very dependent on the new content of the management declarations.
Commission's
response:
The
management declarations as foreseen by Art 59 of the Financial Regulation are
further defined in the respective sectoral legislation.
For CAP,
the template for management declarations is foreseen in Article 3 and Annex I
of the "COMMISSION IMPLEMENTING REGULATION (EU) No 1306/2013 of 17
December 2013 laying down rules for the application of point (b) of Article
7(3) of Regulation (EU) No 1306/2013 of the European Parliament and of the
Council on the financing, management and monitoring of the common agricultural
policy with regard to paying agencies and other bodies, financial management,
clearance of accounts, rules on controls, securities and transparency".
This implementing act was adopted on 06/08/2014 (C/2014/5461).
For the
European Structural and Investment Funds (ESI Funds) the template for a
management declaration is foreseen in the "COMMISSION IMPLEMENTING
REGULATION (EU) No …/..of XXX laying down additional rules pursuant to
Regulation (EU) No 1303/2013 of the European Parliament and of the Council as
regards the model for the progress report, the format for submission of the
information on a major project, the methodology for carrying out the
cost-benefit analysis, the format of the model for the joint action plan, the
model for the implementation reports for the Investment for growth and jobs
goal, the model for the management declaration, the models for the audit
strategy, the audit opinion and the control report and pursuant to Regulation
(EU) No 1299/2013 of the European Parliament and of the Council as regards the
model for the implementation reports for the European territorial cooperation
goal" (inter-service consultation closed in July). This implementing act
is to be adopted in accordance with the advisory procedure. It is currently in
discussion with the Member States and expected to be adopted in the second
semester of 2014.
51.         (§61 - 2012/PAR/0348) The
Parliament calls on the Commission to monitor the certification process of the
national audit authorities in the Member States dealing with repeatedly high error
rates more frequently; encourages the Commission to present a communication and
legislative proposal to this end.
Commission's
response:
The
Commission will not be taking the requested action. As regards Structural and
Cohesion Funds, the size of error rates is not linked to the reliability of the
audit authorities. High error rates can be reported by reliable as well as
non-reliable audit authorities. The same holds true for low error rates. The
Commission monitors all audit authorities and verifies in particular their
independence (condition in the CPR) but audit authorities are not formally
subject to a certification process under the CPR. The Commission sees no need
for a legislative proposal.
The new
reinforced audit strategy in DG AGRI aims to target the weakest links in the
assurance chain: deficient management and control systems which perform
ineffective first level checks at the level of the paying agencies and which
produce unreliable control results at the level of certifying bodies.
52.         (§62 - 2012/PAR/0349) The
Parliament calls on the Commission to apply Article 32(5) of the Financial
Regulation (EU, Euratom) No 966/2012 if the level of error is persistently
high, and consequently to identify the weaknesses in the control systems,
analyse the costs and benefits of possible corrective measures and take or
propose appropriate action in terms of simplification, improvement of control
systems and redesign of programmes or delivery systems.
Commission's
response:
The
Commission has taken the recommended action and refers to the design of the
delivery system for 2014-2020 programming period. 
The key
elements of the 2014-2020 reform are related to ensuring better spending and
better programme governance to ensure a more error-safe environment. This will
include increased result orientation and performance, ex-ante conditionalities
to be fulfilled at the start of implementation for each programme,
simplification, particularly for beneficiaries and harmonised and simplified
eligibility rules. 
The Common
Provisions Regulation for the 2014-2020 programming period also contains
reinforced control provisions and requirements compared to the 2007-2013 period
that will improve the Member States’ accountability so as to better address
errors and ensure legality and regularity of co-financed expenditure each year
before certifying the programme accounts to the Commission.
As regards
the assessment of the first-level checks for 2007-2013 the Commission considers
it is already carrying out such assessment since 2010 through targeted audits
on high risk programmes in the frame of its audit enquiry "Bridging the
assurance gap". Results of these risk-based audits by end 2013 were
submitted to the European Parliament in the context of the 2012 Discharge and
are presented in the AAR of DG Regional and Urban Policy (see page 41 and Annex
8).
As regards
agriculture, DG AGRI is currently implementing the requirement in Article 59 of
the new Financial Regulation that the Certifying bodies have to issue an
opinion on the legality and regularity of MS transactions. This new assurance
model will reinforce the work of the Certifying bodies and provide the
Commission with a much more reliable picture of the quality of MS control
activities. In addition, simplification efforts have been put forward through
the new CAP for the period 2014-2020, in compliance with sound financial
management principles.
53.         (§63 - 2012/PAR/0350) The
Parliament calls for significant reductions in those reporting requirements and
control densities for Member States that operate permanently with very low
error rates; encourages the Commission to present a communication including an
efficient and effective control policy to this end, allowing for more resources
to be made available for control measures in and for countries with high error
rates.
Commission's
response:
The
Commission considers that the reliability of the reported error rates is as
important as the reported error rate itself in order to evaluate the
functioning of the systems and to decide where to focus the audit activity on.
See also reply to 2012/PAR/0348. As regards the called for reduction of control
densities, this option is already provided for in the area of agriculture (Art
41 of the draft Implementing Regulation, detailing the rules already enshrined
in Art 59(5) of Regulation (EU) No 1306/2013, on the financial management of
the CAP provides for the cumulative conditions to be met for a reduction in the
number of on-the-spot-controls).
54.         (§64 - 2012/PAR/0351) The
Parliament urges the Commission to tackle the problem of 'frontmen' being used
for the purpose of obtaining public contracts and calls for every stage of public
procurement procedures to be published on Internet, ensuring maximum
transparency, and identifying subcontractors also.
Commission's response:
Les mesures ont déjà été
prises en ce sens: les nouvelles directives sur les marchés publics 2014/24/UE
et 2014/25/UE augmentent déjà la transparence puisque: 
• dès le début de la
procédure, tous les documents y relatifs doivent être disponibles
électroniquement;
• pour tous les services
relevant des directives, il existe maintenant une obligation de publication
ex-ante et ex-post;
• une fois le contrat
octroyé, il existe l'obligation de communiquer les noms et adresses des
sous-traitants des services et travaux qui sont fournis dans les locaux placés
sous la surveillance directe des pouvoirs adjudicateurs.
Il est à noter que les
directives 2014/24/UE et 2014/25/UE sont entrées en vigueur le 17 avril 2014 et
que les Etats membres disposent d'un délai de 2 ans pour les transposer en
droit national (au plus tard jusqu'au 18 avril 2016).
Toutefois, la Commission ne
peut accepter l'exigence de la publication sur internet à chaque étape des
procédures de passation de marché public, car celle-ci irait à l'encontre de la
simplification administrative recherchée par les directives elles-mêmes.
With
regard to the Concessions Directive 2014/23, new rules contain obligation to
ensure free of charge and unrestricted access to all concessions documents
on-line (since the moment of publication of concession notice or invitation to
tender).
55.         (§65 - 2012/PAR/0352) The
Parliament calls on the Commission to examine its internal shared management
arrangements and make recommendations to the European Parliament regarding the
appointment of Union officials at the head of national payment, management and
audit authorities in the Member States with responsibility for the disbursement
of Union funds.
Commission's
response:
Member
States have the task to appoint the heads of national authorities. The request
would violate the principles of shared management and subsidiarity and
interfere with the autonomy of national public administrations. For Regional
policy, a task force was already set up to help administrations in Greece and Portugal. DG REGIO also provides financial management and control training seminars on
the 2014-2020 programming period to MS' authorities. Also underway are
anti-fraud and anti-corruption seminars targeting certain MS in particular.
Another initiative is the guidance on how to avoid the most common errors
linked to public procurement.
As regards
Agriculture, DG AGRI services regularly meet with representatives of the
Learning Network of Directors of Paying Agencies and Coordination bodies to
examine various technical aspects related to the management and control of CAP
instruments. At the annual conference of the directors of the Paying Agencies,
organized by DG AGRI, DG AGRI auditors inform of their own most common audit
findings and present the findings of the Court of Auditors. Such presentations
are also made on the occasion of similar biannual conferences organized by the
Presidency. Moreover, DG AGRI's anti-fraud advisor regularly gives anti-fraud
seminars at paying agencies. Moreover, as of 2014, DG AGRI has created a new
unit specifically dedicated to providing MS with advice and support in the
implementation of direct payment schemes.
The Court of
Auditors' Statement of Assurance
56.         (§70 - 2012/PAR/0353) The
Parliament calls for a figure to be put on the risk of the above amount
[amounts to be called from MSs for staff pensions] not being made available, in
the light of the Member States’ financial positions; proposes that
consideration should be given to setting up a Community pension fund in order
to get these financial commitments vis-à-vis staff off the balance sheet.
Commission's
response:
As replied
in previous years, the accounting practice described has been used since the
introduction of the accruals based accounts in the EU entities. Applying a
different method would unavoidably lead to a negative DAS for the accounts
because it is not in line with the International Public Sector Accounting
Standards. Pension liability is a widely spread concept with international
definition from which it is not for the Commission to depart. As regard the
suggestion to create of an actual pension fund, it should be recalled that the
Union pension scheme is based on the same actuarial principles as an actual
pension fund. The possible creation of an actual pension fund has also been
addressed, amongst other policy aspects, in the context of the Report from the
Commission to the Council on the Pension Scheme of European Officials and Other
Servants of the European Union (COM (2012) 37 final, available at this link).
In particular, Section 4.7 presents several possible different implementation
options, with estimates of the related budgetary implications.
57.         (§94 - 2012/PAR/0354) The
Parliament calls on the Commission to supply country-specific information in
the appropriate depth and on the basis of meaningful time series.
Commission's
response:
The
communication on the protection of the EU budget will provide amounts broken
down per Member States.
58.         (§96 - 2012/PAR/0355) The
Parliament asks the Commission to provide Parliament and the Council with
precise amounts [concerning financial corrections and recoveries] and the use
made thereof in this regard in the next communication on the protection of the
Union budget for the financial year 2013.
Commission's
response:
This will
be included in the communication on the protection of the EU budget in
September 2014.
59.         (§100 - 2012/PAR/0356) The
Parliament encourages the Commission to present information reconciling as far
as possible the year in which payment is made, the year in which the related
error is detected and the year in which recoveries or financial corrections are
disclosed in the notes to the accounts.
Commission's
response:
The EP has
requested this already in the past and the Commission has explained the
technical circumstances that hinder such a reporting. Due to the cumulative
feature of payment applications under cohesion policy, projects expenditure can
be spread over many years.
The
Commission is committed to improving the information provided on the protection
of the EU budget but regarding the request to link recoveries or financial
corrections to the year of the original payment or detection, it has to be noted
that it is seldom possible as expenditure is controlled several years after the
actual year of a given payment. Additionally, in shared management, the
differences in the timing of financial corrections and actual recoveries on one
side, and error rates on the other, also prevent this reconciliation. This is
also relevant for direct management where recovery orders are issued after the
end of the – often multiannual – grant period.
In the
area of Agriculture, reconciliations of payments with declared expenditure and
recoveries/financial corrections are carried out by the Certifying Bodies
during the annual financial clearance of accounts.
60.         (§102 - 2012/PAR/0357) The
Parliament calls on the Commission to develop a joint approach among the
directorates-general with regard to establishing amounts at risk.
Commission's
response:
The
Commission has provided a definition of the concept of amount at risk in the
2013 Synthesis report COM(2014)342 final.
61.         (§103 - 2012/PAR/0358) The
Parliament urges the Commission to adequately protect the Union budget and
finds the average level of past financial corrections and recoveries
encouraging.
Commission's
response:
The
Commission will continue to improve the application of financial corrections
and recoveries. This issue has also been addressed in the 2013 Synthesis
report.
62.         (§104 - 2012/PAR/0359) The
Parliament considers that the comparison made by the Commission’s Synthesis
Report of the total for ‘amounts at risk’ with the average level of financial
corrections over the last years should be put into context.
Commission's
response:
The
Commission has provided information on this aspect in the 2013 Synthesis
report.
63.         (§105 - 2012/PAR/0360) The
Parliament regrets that the Commission continues to ignore Parliament's long
standing request to add the individual Commissioner's signature to the annual
activity reports of his/her related Directorate-General for which he/she is
responsible; notes that the synthesis report is adopted by the College of Commissioners, but deems this unsatisfactory in the light of democratic
accountability principles.
Commission's
response:
The AAR is established in compliance with the FR which stipulates that the Authorising Officer
by Delegation shall report to his or her institution on the performance of his
or her duties in the form of an annual activity report. The Synthesis Report is
adopted by the College in oral procedure. As mentioned in this report, by
adopting the Synthesis Report, the College takes the political responsibility
for the management of the Budget.
64.         (§109 - 2012/PAR/0361) Given
the urgent lifesaving nature, rapid project cycle and modest budget (EUR 2 per
citizen per year) involved in the Union emergency response, the Parliament
calls on the Commission and the budgetary authority to recognise the
exceptional nature and specificity of these actions by ensuring matching levels
of commitment and payment appropriations for humanitarian aid in the annual
budgetary cycle.
Commission's
response:
The
Commission recognises the very nature and the specificity of humanitarian aid
actions and is fully aware of the problems that the high volume of outstanding
commitments may create.
In order
to rectify this situation caused by the high pressure on the level of payment
appropriations it has taken the following corrective measures:
With the
transfer DEC 6/2014 in April the payment appropriations have been increased by
EUR 150 million drawing from the Emergency Aid Reserve (EUR 50 million), and a
temporary redeployment from DCI (EUR 55 million) and IPA (EUR 45 million,
including EUR 15 million from cross-border cooperation).
In the
Draft Amending Budget 3/2014 the Commission has requested EUR 250 million in
payments. 
In Draft
Budget DB 2015 the Commission is proposing for Humanitarian Aid to set payments
at the same level as commitments.
The
Commission believes that these measures are adequate to meet the legal
obligations and to avoid disruption on the ground.
65.         (§110 - 2012/PAR/0362) The
Parliament notes that under shared management pre-financing payments are not
conditioned by the existence of a guarantee; suggests therefore that the
Commission should provide in the reports of the accounting officer a breakdown
of pre-financing payments by year of their accrual and by Member State.
Commission's
response:
As such a
reporting has not been done before, it will take a significant development time
so as to be sure that reliable information is produced. However, the Commission
would like to draw the attention to the fact that simply comparing the amounts between
Member States would not provide any relevant insight on the use of funds.
66.         (§111 - 2012/PAR/0363) The
Parliament is worried since EUR 4,8 billion from the previous programming
period 2000-2006 was paid from the Union budget as pre-financing to projects in
the structural domain as of 31 June 2013, which neither have been cleared nor
had the amounts been recovered by the Commission or the Member States; demands
information on the state of play of those projects and information about the
schedule for recovery or clearance of those funds.
Commission's
response:
For
agriculture, there is an open enquiry regarding Objective 1 national Greece (started on 13/11/2013). It is foreseen to be concluded during 2014.
The enquiry
was launched because the winding-up report submitted by the Greek authorities
for the above-mentioned programme indicated an overall error rate upon closure
above the generally accepted error rate of 2% according to the Guidelines on
closure of assistance (2000-2006) from the Structural Funds. The competent
national authorities did not agree with the corresponding financial reductions.
The latest communication from Greece in respect was on 19 September 2013.
The Greek
authorities replied to the observations raised on 13/01/2014. By letter dated
5/03/2014, the Commission's services invited the national authorities to a
bilateral meeting which will take place on the 27/05/2014. The duration of the
enquiry is in the view of the Commission fully justified and can hardly be done
faster given the Member States' legitimate right to presents its argument
before a final decision is made by the Commission
67.         (§112 - 2012/PAR/0364) The
Parliament demands a detailed breakdown and a detailed explanation of the EUR
2,3 billion of pre-financing that: (a) had been adjusted due to technical
corrections made to the opening balance when accruals-based accounts were first
prepared or (b) had been transferred from the Commissions balance sheet to
other Union bodies (agencies and joint undertakings) at the time of their
creation.
Commission's
response:
This
request would be a major and time consuming exercise. The Commission highlights
that the opening balance sheet was thoroughly audited by the Court of Auditors
at the time and each year the pre-financing amount has been, understandably,
the most scrutinised amount on the EU balance sheet. Since 2007 no major issues
with pre-financing have been identified by the Court.
68.         (§113 - 2012/PAR/0365) The
Parliament is worried that the Commission received in the development and
cooperation area only guarantees for a total of EUR 700 million while an amount
of EUR 10,1 billion in pre-financing has already been paid; expects the
Commission to undertake the necessary steps to minimise the credit risk.
Commission's
response:
A global
risk assessment has been undertaken in 2012 by the Commission in order to
establish guidelines for asking or not asking for a pre-financing guarantee.
The replies are striking: most EU Delegations have never cashed a guarantee.
This implies that the important amount of work requested from sub-delegated
authorizing officers in managing these guarantees seems disproportionate to their
real added value. The provision of unnecessary pre-financing guarantees results
in ineffective use of the Commission's personnel as well as financial
resources. The deterrent effect of guarantees should however not be
underestimated, and it is undisputed that we would face more problems of
reimbursement of pre-financings without them.
The
question at stake is therefore to determine the cases where requesting a
pre-financing guarantee does add value to the protection of EU financial
interests, while reducing the total number of guarantees to a manageable level
and otherwise limiting the risks linked to pre-financing payments. The decision
to request a pre-financing falls consequently under the responsibility of the
Authorizing Officers, who must carry out a risk analysis, taking into account
the value of the contract, its subject matter, its duration and pace and the
structure of the market (works, supply and services). It is also not authorized
for low value contracts (<60.000 EUR). For grants, it is usually not
requested from NGOs, organisations that have signed a FPA, government
departments or public bodies, and it is not allowed if the Coordinator is an
International Organisation.
69.         (§114 - 2012/PAR/0366) The
Parliament urges the Commission to prepare and publish a ‘long-range cash flow
forecast’, projecting future payment requirements to ensure that necessary
payments can be met from approved annual budgets.
Commission's
response:
The
Commission is taking the recommended action.
Pursuant
to article 38§3f of the Financial Regulation, the Commission will attach to the
Draft Budget 2015 a summary statement of the schedule of payments for 2014,
2015 and 2016.
This
schedule will cover for each budget line also the outstanding commitments,
commitments of the current year and the request for 2015.
Information
on the long-term budgetary needs of the EU will also be included in the report
sent by the Accounting Officer of the Commission to the Parliament and Council
in September in accordance with the Financial Regulation article 150§4.
70.         (§115 - 2012/PAR/0367) The
Parliament recalls its proposal for a full-time Commissioner for Budgetary
Control.
Commission's
response:
The
Commission takes note of the Parliaments proposals but considers that it cannot
commit the future President of the new Commission and therefore cannot prejudge
the allocation of the portfolios of the members of the new Commission.
71.         (§116 - 2012/PAR/0368) The
Parliament calls on the Commission to shield the Union budget from the
resulting risk of irregular payment by applying financial corrections in the
event that such weaknesses in Member States' management and control systems are
found; calls, therefore, on the Member States and the Commission once again to
urgently reinforce first-level checks to address this unacceptably high level
of mismanagement.
Commission's
response:
The
Commission considers this request to be implemented as, under the shared
management of the CAP, the Member States are responsible for the first level
controls before payments to the beneficiaries and the Commission systematically
applies net financial corrections to protect the EU budget in all cases where
its supervision of the proper functioning of the Member States management and
control systems reveals deficiencies.
In the
framework of shared management, as set out in the Financial Regulation and the
rules on the financing of the CAP, the Member States assume the primary
responsibility for ensuring that actions financed by the budget are implemented
correctly in accordance with the rules. The role of the Commission is to
supervise, by verifying the effective functioning of Member State's management and control systems through audits (including on-the-spot) and
systematically applying net financial corrections to protect the EU budget
where deficiencies are identified.
Between
2011 and 2013 some 300 audit missions were carried out. Regarding net financial
corrections, in 2013, decisions were adopted by the Commission in respect of
1.1 billion EUR covering the final outcome of 147 individual conformity
clearance procedures. 
See also
reply to request 2012/PAR/0307
72.         (§118 - 2012/PAR/0369) The
Parliament notes that the lack of reliability of the first-level checks
performed by some Member States undermines the credibility of the annual
activity reports drafted by the Commission services and the Synthesis Report
adopted by the Commission, as they are partially based on the results of the
checks performed by the national authorities; reiterates, consequently, its
previous demand that the Commission establish reliable and objective annual
activity reports.
Commission's
response:
The
Commission, as outlined in the Letter of Commissioner Semeta to the EP CONT
Committee of 10 March 2014, committed itself to address weaknesses in Member
States, to put in place actions to remedy the situation and to report on it,
inter alia, in the annual activity reports. These actions include measures
regarding the quality of the first-level checks performed by the Member States.
The 2013 Synthesis report also reflects the commitments taken on this aspect.
73.         (§122 - 2012/PAR/0370) The
Parliament requests the Commission to forward each year to Parliament the
annual summaries of the final audit reports and of the controls carried out by
the Member States pursuant to Article 59(5)(b) of Regulation (EU, Euratom) No
966/2012 at the latest two months after their receipt by the Commission under
the necessary safeguards laid down in the Interinstitutional Agreement of 2
December 2013 between Parliament and the Commission on budgetary discipline,
cooperation in budgetary matters and sound financial management.
Commission's
response:
The
Commission has accepted and is implementing the Parliaments request to
translate and to forward all annual summaries to the Parliament as soon as
possible. However, taking into account the time needed for translation, the
request to forward the annual summaries to Parliament within two months upon
receipt is technically not feasible.
74.         (§124 - 2012/PAR/0371) The
Parliament requests the Commission, after the establishment of the template, to
actively and constantly encourage the Member States to use that template in
order to receive useful and reliable national declarations from all Member
States.
Commission's
response:
See
response to 2012/PAR/0342.
Revenue
75.         (§128 - 2012/PAR/0372) The
Parliament notes that the Court of Auditors was unable to demonstrate the
correctness of EUR 8 million of the EFTA contribution (EUR 240 million); calls
on the Court of Auditors and the Commission to investigate this finding and
report on the correctness of the EFTA contribution in the follow-up to the
discharge for 2012.
Commission's
response:
The
Court’s audit did find administrative weaknesses in the procedure for an ad hoc
calculation which arose as an exception to the standard procedure which
determines the contributions of EFTA states, ex-ante. Atypically, the
calculation identified by the Court, related to the ex-post contribution of one
EFTA state to one EU programme over several years. The Court’s audit did not
find errors in the calculations or payments of other revenue transactions.
The
Commission services are reviewing the administrative procedure for the
calculation of atypical contributions by EFTA states such as those which are
determined ex-post in order to prevent the recurrence of the weaknesses
identified by the Court.
76.         (§129 - 2012/PAR/0373) The
Parliament calls on the Commission to inform the Committee on Budgetary Control
during the follow-up to the 2012 discharge procedure what efforts have been
made to remove reservations regarding the communication of data from the GNI
field.
Commission's
response:
The
general reservations on EU-25 Member States were lifted in January 2012 and
replaced by 103 specific reservations and six transversal reservations (which
are specific reservations that are the same for all MSs). The general
reservations on Bulgaria and Romania were lifted in January 2013 and replaced
by 19 specific reservations and six transversal reservations (which are
specific reservations that are the same for all Member States).
In
September 2013, two more country specific reservations were placed, one for Austria and one for the United Kingdom. In August and September 2013, the Commission notified the
EU-27 Member States that it reserved its position on two additional transversal
issues. All of the country specific and transversal reservations have as their
target date 22 September 2014 (excl. the latest UK specific reservation the
target date of which is 22 September 2016).
In
September 2012, the Commission issued a general reservation on Greek GNI data
of 2008. In September 2013, the Commission extended the general reservation on
Greek GNI data of 2008 to 2009.
By May
2014 the Commission has lifted fifteen of the Member States’ country specific
GNI reservations; and 72 of the transversal GNI reservations (which is
approximately one third of all 216 transversal reservations).
77.         (§131 - 2012/PAR/0374) The
Parliament wishes to be informed what measures the Commission has taken to
remove existing reservations relating to the national VAT system of the Member
States, which may date from as long ago as the 1990s.
Commission's
response:
Together
with the Member States concerned, the Commission addresses the potential
shortcomings underlying reservations during VAT own resource inspections and
specially arranged management visits. This approach has proven effective. 
At the end
of 2012 there were 158 VAT reservations, by May 2014 the total had been reduced
to 108. 
At the end
of 2012, 17 reservations were being monitored as being long-outstanding (that
is set by the Commission more than 5 years before and with the financial
consequences then unresolved). Of those long-outstanding reservations four
covered at least one year prior to 2000, with the earliest year being 1995. By
May 2014 twelve of the long-outstanding reservations from 2012 had been lifted
and information had been obtained to lift a thirteenth. For the four remaining
significant progress had been achieved: (i) a Court judgment in 2013 has
clarified precisely what types of transaction need to be included in the
compensation; (ii) the coverage of the reservation has been reduced from motor
vehicles and fuel, to fuel only; (iii) the Member State has provided revised
calculations which will be the subject of verification by the Commission during
2014; (iv) it has been agreed that a full audit will be conducted by an
independent third party to identify all the ramifications of accounting
adjustments which, at first sight, would have the effect of reducing the Member
State’s own resource liabilities. (The two latter items both include the year
1999.) 
The
Commission will continue to apply the same methodology in the future.
78.         (§134 - 2012/PAR/0375) The
Parliament regrets that Belgium, Finland and Poland, which the Court of
Auditors visited in 2012 in the course of its audits, are characterised by
shortcomings in customs surveillance at national level in connection with
retrospective audits and risk analysis; calls on the Commission to investigate
these shortcomings.
Commission's
response:
The
Commission will follow up the shortcomings found by the Court and will request
the Member States concerned to take remedial measures.
79.         (§135 - 2012/PAR/0376) The
Parliament calls on Member States and the Commission to step up their customs
surveillance, especially in the major ports; calls on the Commission to report
on the matter during the preparation of the discharge for 2013.
Commission's
response:
The Member
States are responsible for carrying out customs controls. In recent years in
its inspection of the Member States' systems and procedures for the collection
of traditional own resources the Commission has put special emphasis on Member
States’ risk management and control systems. Three thematic reports
consolidating the annual results of these inspections (Member States' control
strategy, local clearance procedure and external transit procedure) have
already been presented to the Member States. In 2013 the Commission carried out
inspections of End Use and the entry of goods into the EU. In the latter
inspection, the procedures at major EU ports in 8 Member States were inspected.
By the end of 2014 thematic reports on these themes are planned. Thematic
reports provide a global picture of the situation per Member State, cover all the shortcomings identified and give an account of the follow-up action taken.
These reports can be made available to the European Parliament on request.
80.         (§140 - 2012/PAR/0377) The
Parliament calls on the Commission to use all means to enforce the obligation
of Member States to provide information [on VAT fraud, and in particular the
so-called carousel or missing trader fraud] in a timely manner to the
Commission.
Commission's
response:
There is
currently no legal obligation in the Regulation on Administrative Cooperation
and the fight against VAT fraud (Regulation 904/2010) for Member States to
provide information on VAT fraud and carousel/missing trader fraud in
particular. Therefore, the Commission has no real means to enforce this.
Nevertheless,
the Commission tried to enforce the provision of information in relation with
administrative cooperation through annual statistics. As there was no majority
amongst Member States to make this obligatory, the delivery of the benefits and
results of administrative cooperation is only optional (box 22 of the Model –
annex IV of Regulation 79/2012).
The only
information available in this context therefore derives from the annual report
to be submitted by the Eurofisc network to the Standing Committee on
Administrative Cooperation. This report covers also information on
carousel/missing trader fraud. Although, the Commission pleads during the
annual plenary meetings of Eurofisc that the report must include detailed
information on the fraud covered detected and prevented in the working fields
(and will continue to do so), it is up to the Member States to decide on the
content of the report.
Agriculture
81.         (§143 - 2012/PAR/0378) The
Parliament calls on the Commission and the Court of Auditors, in the context of
the adversarial procedure, to reach agreement on the eligibility criteria for
permanent pasture.
Commission's
response:
There is
no disagreement between the Commission and the European Court of Auditors.
82.         (§151 - 2012/PAR/0379) The
Parliament calls for this new approach [approach used by DG AGRI to calculate
the residual error rate for decoupled area aid in 2012] to extend to all CAP
expenditure in DG AGRI's next Annual Activity Report.
Commission's
response:
The
requested action has been already done in the framework of the AAR 2013.
In 2012 DG
AGRI adjusted its method to estimate a more comprehensive residual error rate
(RER) by taking into account all available information (its own audit reports,
those of the ECA and CB). This assessment was carried out in respect of
decoupled direct aids in the AAR of 2012 and extended after further fine-tuning
in the AAR 2013 to all CAP expenditure.
The
methodology for calculating the RER will be further developed next year (AAR
2014) in the direction of a multiannual cumulative approach that will reflect
the impact of the ex post net financial corrections imposed by the Commission
(and recoveries from beneficiaries by Member States themselves) on the residual
risk to the EU budget.
See also
reply to request No 2012/PAR/0332.
83.         (§153 - 2012/PAR/0380) The
Parliament urges the Commission, in cooperation with the Member States, to
address the problems with regard to permanent pasture and ensure that it is
correctly recorded in the LPIS; urges the Commission to inform Parliament on a
six months basis on progress made.
Commission's
response:
The
Commission has already taken the requested action The Commission is already
working with the Member States on ensuring a common understanding and as such
the request is largely put in practice. The Member States for which there is a
structural problem are addressing it for the moment (as part of an action
plan). It should be borne in mind that the implementation of such exhaustive
work requires time. 
For this
reason, however, the requirement to inform the Parliament every six months is
from this point of view "excessive" and the Commission will not be
taking the requested action to report on a six-month basis (AGRI “political
decision” to take here on whether reporting to CONT outside the discharge
hearing process is an orientation to take or not (precedent).
The
Commission replied to the respective recommendation from the Court of Auditors:
"To enable maintenance of agriculture in specific areas, the Member States
can implement a procedure which ensures that the eligible area within these
parcels is considered for payment, in so far that overall the parcel can still
be considered as 'agricultural'. Guidelines including examples on how to assess
the area to be taken into account have been discussed with and distributed to
the Member States over the recent years" (paragraph 3.37, recommendation
1).
84.         (§154 - 2012/PAR/0381) The
Parliament asks the Commission and the Member States to take immediate remedial
action when administrative and control systems, and/or IACS databases, are
found to be deficient or out of date.
Commission's
response:
The
Commission is taking the requested action. When shortcomings are identified in
the Member States' management and control systems, including regarding the
effectiveness and up-date of IACS databases, action is taken at two levels:
first through the opening of conformity clearance procedures to cover the
financial risk for the EU budget; Secondly, whenever necessary and appropriate,
by asking the Member States to set up action plans to remedy the deficiencies. 
The first
course of action is therefore for the Member States to set up and keep up-dated
effective management and control systems.
85.         (§158 - 2012/PAR/0382) The
Parliament expects the Commission to make all efforts to reduce the duration of
the conformity procedure in standard cases to maximum two years.
Commission's
response:
The
Commission agrees that there is scope for significantly speeding up the
conformity procedure and will continue its efforts to streamline the procedure
for net financial corrections. 
Firstly,
the new CAP Horizontal Regulation Reg. 1306/2013 (which was adopted by the
European Parliament and the Council on 17 December 2013) describes more clearly
the nature, scope and sequence of the successive steps. For instance, it
establishes a clear demarcation between the contradictory phase, during which
the Member State is responsible for providing all information (facts and
arguments) that may contradict the initial findings of the Commission, and the
conciliation phase during which only information made available in the previous
steps of the conformity procedure may be considered. It also describes the
three different types of financial corrections and the conditions for using
them. For instance, flat rate corrections shall be applied in cases where the Member State has not provided to the Commission the information that would be necessary for to
identify more precisely the financial damage to the Union.
Secondly,
provisions in the delegated act set out more precisely the method and criteria
for calculating the financial correction in due proportion of the risk of
irregular expenditures. For instance more stringent rules and higher net
financial corrections will apply where there are three or more different
deficiencies in a control system. Commission guidelines will further detail the
more technical elements. 
Thirdly,
the rules governing the conformity procedure, established in an implementing
act formally adopted on 6 August 2014, provide for mandatory deadlines for both
the Commission and the Member States at each step of the conformity procedure.
DG AGRI already implements a closer monitoring of the management of the
procedural delays. 
Finally,
in order to enhance the effectiveness of the audit work carried out by DG AGRI
an audit training program was incorporated in the DG AGRI's strategic training
framework from 2013. This program includes, notably, actual certification of
all auditors.
However,
while there is scope for significantly speeding up the conformity procedure so
that in the simplest cases the conformity procedure can be managed in two
years, there can be no guarantee that each and every case can be managed in
less than two years. For more complex cases the two phases of the conformity
procedure (contradictory followed by conciliation), the Member State's right to
challenge the Commission's findings and the need for the correction to be in
proportion to the seriousness of the deficiency will not always make it
possible to manage the procedure in less than two years.
86.         (§159 - 2012/PAR/0383) The
Parliament urges the Commission and the Member States to ensure that payments
are based on inspection results and that on-the-spot inspections are of the
quality necessary to determine eligible area in a reliable manner.
Commission's
response:
The
Commission does not have the resources to handle every year the 50 million
transactions (over 60 billion EUR) for 8 million final beneficiaries of the
CAP. Under shared management, the Member States have to assume the primary
responsibility that payments are disbursed to the final beneficiaries only
after ex-ante administrative and on-the-spot checks have been carried out. CAP
rules provide that for each aid support scheme there is an ex-ante
administrative check of 100 % of the aid applications, cross-checks with other
databases where appropriate as well as pre-payment on-the-spot checks of a
sample of transactions ranging between 1 % and 100 %, depending on the risk
associated with the regime in question. In this context, the by far most
important system is the IACS (Integrated Administration and Control System),
which in financial year 2013 covered 92 % of EAGF expenditure
The role
of the Commission is to supervise the effective functioning of Member State's management and control system through systems audits carried out
on-the-spot. The resulting conformity clearance procedures systematically lead
to the imposition of net financial corrections that protect the EU budget where
systems deficiencies or irregular spending are detected.
The new
regulatory framework governing the CAP until 2020, including the delegated and
implementing acts, consolidates the rules on controls to be performed by the
Member States and reinforces the tools for the supervision by the Commission.
For instance, the conformity procedure (which results in net financial
corrections) has been streamlined and the interruption and suspension
procedures have been aligned with the other policies under shared management.
87.         (§160 - 2012/PAR/0384) The
Parliament urges the Commission to ensure that the design and quality of the
work performed by the directors of paying agencies and the certification bodies
provide a reliable basis for the assessment of the legality and regularity of
underlying transactions.
Commission's
response:
In
preparation of the new programming period, and in line with the increased
responsibility of Certification Bodies to cover legality and regularity of
expenditure, a new guideline has been drafted. To this end, numerous bilateral
meetings were organized with Certification Bodies in 2013. In addition, several
expert group meetings with the Certification Bodies were organized in 2013 and
2014, with the aim to discuss the draft guideline and to share experiences with
the Certification Bodies. The new approach will be applicable as from 2014 on
for IACS based schemes, and from 2015 on for the non-IACS schemes. Once
operational and properly applied this new methodology should provide a reliable
basis for the assessment of the legality and regularity of the underlying
transactions.
88.         (§165 - 2012/PAR/0385) The
Parliament calls on the Commission and the Court of Auditors to harmonise the
treatment of public procurement errors in shared management without delay and
to report to the discharge authority on the changes.
Commission's
response:
The
Commission and the European Court of Auditors usually agree on the type of
errors but take different views on the way to quantify such errors, despite
efforts made to try and harmonize their positions. In 2009, the Commission
invited the Court to harmonize methodologies for breaches on public procurement
rules and to agree on the criteria to be applied. The Court declined this
invitation. The Court indicated to the European Parliament in previous
discharge exercises that while it quantifies the error as 100% for quantifiable
errors (but not compliance errors), it understands that the Commissions needs
to quantify financial corrections on a different basis with rates of
corrections 2%, 5%, 10%, 25% and to 100% through the Commission guidelines for
financial corrections under public procurement.
Given this
situation the Commission is not in a position to fulfil this request of the
European Parliament as long as the Court of Auditors prefers applying its own
methodology.
However,
the Commission has adopted in December 2013 a decision (C(2013)9527) setting
out guidelines for determining financial corrections for non-compliance with
the rules on public procurement. This will ensure a harmonized treatment of PP
errors between all Commission services responsible for shared management funds.
These guidelines are also addressed to the Member States in order to ensure a
harmonized treatment of irregularities in PP across Member States.
89.         (§166 - 2012/PAR/0386) The
Parliament calls on the Commission and the Member States to ensure that the
existing rules [concerning VAT or public procurement] are better enforced.
Commission's
response:
The
enforcement of existing rules is at the core of the clearance of accounts
system. The Commission addresses recommendations for improvements to the
national authorities and imposes financial corrections on Member States when
risks to the fund have been identified. This will continue with particular
focus on the issues highlighted by the Court of Auditors as regards VAT and
public procurement as these have also been found by the Commission during its
own audits.
As regards
public procurement, the Commission has adopted new guidelines for determining
financial corrections for non-compliance with the rules on public procurement
in December 2013 (Commission Decision C(2013)9527).
The Commission
would also like to underline that an error in PP does not necessarily mean
fraud or misuse of EU funds. Very often, the policy objectives for the
individual action have indeed been met and the taxpayers' money has not been
lost.
For the
coming 2014-2020 programming period, VAT rules are jointly set for the ESI
Funds under the Common Provisions Regulation, which in its Article 69(3) is
clearly spelt out that value added tax is not eligible for a contribution from
the ESI Funds except where it is non-recoverable under national VAT
legislation. Therefore, in period 2014-2020 public law bodies could also claim
VAT expenditure as eligible if under national laws, VAT is non-recoverable for
them.
90.         (§171 - 2012/PAR/0387) The
Parliament calls on the Commission and the Court of Auditors, in the context of
the adversarial procedure, to reach agreement on the financial clearance
procedure.
Commission's
response:
The
Commission cannot accept the request to open a discussion with the European
Court of Auditor because it would imply reopening the discussions on principles
and legal rules that were confirmed by the two co-legislators in December 2013.
Since
1995, the clearances of accounts procedures for the CAP include an annual
financial clearance of the accounts of each paying agency and a multi-annual
conformity clearance covering the conformity of the underlying transactions.
The new Financial Regulation adopted in 2012 confirmed this distinction and
extended it to all policies and expenditure under shared management. 
The
distinction between the financial clearance procedure on the one hand, which
shall cover exclusively the completeness, accuracy and veracity of the annual
accounts reported by the paying agencies, and the conformity clearance
procedure on the other hand, was established on the basis of previous
experience that demonstrated that for expenditure under shared management a
single procedure was not efficient.
This
distinction was one more time confirmed in December 2013 when the
co-legislators adopted the horizontal rules governing the financial management
of the CAP.
91.         (§174 - 2012/PAR/0388) The
Parliament requests that the Commission set out criteria for the calculation of
flat rate corrections that will ensure that the nature and gravity of the
deficiency is adequately taken into account.
Commission's
response:
The
Commission has taken the requested actions, and financial corrections are
determined on the basis of the nature and gravity of the infringement and the
financial damage caused to the EU budget. Where possible, the amount is
calculated on the basis of the loss actually caused or on the basis of an
extrapolation. Where this is not possible with proportionate efforts,
flat-rates are used which take account of the nature and gravity of the
deficiencies identified in the national management and control systems. 
The rules
for application of financial corrections are basically established in
Regulation EC No 1306/2013, which requires the precise criteria for estimating
the risk to the EU budget to be detailed in the Delegated Act. In the case of
flat-rate corrections, the Delegated Act specifies how the severity of the
deficiency shall be assessed, taking into account its nature (key or ancillary
control) but also its recurrence (repetition from a previous year without
improvement) and the accumulation with other deficiencies (the risk of errors
is likely to be higher when there are several deficiencies).
92.         (§179 - 2012/PAR/0389) The
Parliament calls on the Commission to continue to provide guidance and
assistance to Member States by means of best practice, through systematic
interruptions of payments, financial corrections according to the severity of
the error and also, in addition, by drawing up short term and ad hoc action
plans.
Commission's
response:
New
resources dedicated to the implementation of the direct payments, including
greening, which will support the Member States with reinforced means in their
preparative activities for a smooth implementation of the CAP reform in 2015
including the dissemination of best practices have been assigned within DG AGRI
to these tasks.
Actions
plans have recently been set in motion in the area of Direct Payments and
non-IACS support measures. They are based on a stock-taking of the root causes
of errors as encountered in DG AGRI's audits in Member States and as found by
the European Court of Auditors. The DG also drew on the experiences of its
policy units. The action plans contain corrective measures that should help to
avoid certain types of errors in the future. A common theme to the action plans
in terms of corrective steps is enhanced communication with and guidance of
Member States so as to address errors that occur for instance due to at times
inadequate checks of Member States authorities. Formats like the bi-annual
conference of the directors of the paying agencies and its sub-bodies will
continue to constitute an important interface in this regard.
If Member
States refuse to implement action plans to remedy deficiencies or are unable to
do so within a reasonable period of time, the level of financial correction
will systematically be increased in proportion to the additional risk to the EU
budget. In addition, following the adoption of the new CAP Horizontal
Regulation at the end of 2013, the Commission will be able to suspend payments
where MS are not able to remedy to serious deficiencies.
See also
reply to request no 2012/PAR/0317.
93.         (§180 - 2012/PAR/0390) The
Parliament calls on the Commission to ensure in the area of rural development
that uniform standards and procedures are being equally applied and observed
both by its approving and auditing bodies.
Commission's
response:
The
requested action has been taken. The Commission services have prepared
substantial guidelines on verifiability and controllability and on eligibility
conditions and selection criteria as well as individual measure fiches for each
of the measures in programming period 2014-2020 which will instruct both Member States and the Commission services in programme preparation and implementation,
including audits.
94.         (§181 - 2012/PAR/0391) The
Parliament calls on the Commission to ensure that any future guidelines on
eligibility conditions and selection criteria for the new programming period
2014-2020 of EAFRD are being equally set as a common standard not only for
national competent bodies and paying agencies but also for its approving and
auditing bodies.
Commission's
response:
The
requested action has been taken. The Commission Guidelines on eligibility
conditions and selection criteria have been prepared by the Commission services
and discussed with Member States in the Rural Development Committee. These
guidelines will instruct both Member States and Commission services in
programme preparation and implementation, including audits.
95.         (§184 - 2012/PAR/0392) The
Parliament expects the Commission to provide those amounts [amounts declared
irrecoverable from the EAGF due to insolvency of the beneficiary] each year in
its Annual Activity report and elaborate ways how Member States can diminish the
risk of funding beneficiaries at the brink to insolvency.
Commission's
response:
The
requested action has been taken. In Annex 10 – Part 5 of the AAR 2013, the
Commission is providing for such information. With regard to the ways to
diminish the risk of funding beneficiaries at the brink to insolvency, it
really depends on the specific sector regulation provisions (e.g. compulsory
assessment of a business plan for some EFARD investment measures)
96.         (§185 - 2012/PAR/0393) The
Parliament notes that all amounts in relation to EAFRD debts declared
irrecoverable in the financial years 2007-2012, i.e. EUR 0,9 million of debts,
do not have any valid justification; asks the Commission to explain what it is
planning to do in this regard.
Commission's
response:
The
Commission is taking the requested action. Following the provisions of Article
32(7) of R.1290/2005 the MS can decide to halt recovery subject to the
conditions laid down in Art 32(6) only after closure of the program.
Consequently, all amounts in relation to EAFRD debts declared irrecoverable in
the financial years 2007-2012, i.e. EUR 0.9 million of debts, are not valid and
the most material amounts will be followed-up through some conformity
enquiries.
97.         (§186 - 2012/PAR/0394) The
Parliament calls on the Commission to take a more pro-active approach in
solving such nuisances [insignificance of amounts to recover] in the coming MFF
when they come to the Commission's attention.
Commission's
response:
With
regard to EAFRD, some Paying Agencies were obliged to undertake recoveries from
beneficiaries even if small amounts are concerned, since Article 33 (7) of
R.1290/2005 was only applicable after closure of a rural development program.
For these small amounts costs for the recovery might exceed the amount to be
recovered. Since 1 January 2014, this rule is not any longer valid and Article
54 of the new Regulation 1306/2013 shall apply, i.e. new regulation foresees
for the application of de minimis rules also for EAFRD debts before the closure
of the program.
98.         (§188 - 2012/PAR/0395) The
Parliament demands that the latter gold-plating forms be addressed
[gold-plating appearing to be disproportionate and costs outweigh the benefits
('bad' gold-plating practices)].
Commission's
response:
The
requested action has been taken. Most of the "bad" gold-plating
practices have been identified in the Commission Staff Working Document on the
assessment of root causes of errors and corrective and preventive actions, as
the Study also confirms. The responsibility of introducing "bad"
gold-plating in the implementation of the rural development programmes lies
mostly on Member States. The ex-ante assessment on verifiability and
controllability of the measures introduced in Article 62 of Regulation (EU) No
1305/2013 will help MS to identify and eventually correct those practices.
99.         (§189 - 2012/PAR/0396) The
Parliament requests in this respect [gold-plating] the immediate implementation
of the so-called "quick wins" to assess potential costs together with
expected policy benefits when introducing ambitious requirements and
commitments, to tackle problematic administrative and procedural requirements,
as well as to avoid ambiguous and unclear requirements.
Commission's
response:
The
requested action has been taken. 'Quick wins' refer mainly to programme
modifications that allow simplification on the implementation of certain
measures and improvement of the system of controls. Indeed, since 2012 Managing
Authorities and Paying Agencies have been requested to analyse the root causes
of errors and as a consequence, some Member States have amended their
programmes introducing clearer requirements and commitments (e.g. organic
agriculture in Portugal) which allows an automatic improvement in the error
rate.
100.       (§190 - 2012/PAR/0397) The
Parliament asks also for structural changes leading to long-term solutions such
as a permanent knowledge-sharing platform among managing authorities and paying
agencies across the Union so that EAFRD specific bodies can learn by examples
and best practices when discussing areas of ambiguity as well as overly complex
requirements and controls; demands in this respect the accessibility to this
platform in all Member States.
Commission's
response:
The
requested action has been taken. The Commission services have organised up to
now 3 Seminars on Error Rates with Paying Agencies and Managing Authorities
during 2013 and 2014, which one of main goals is the exchange of good practices
and examples to correct the level of error rates, including gold-plating
issues. Furthermore, Article 62 of Regulation (EU) No 1305/2013 [EAFRD] also
obliges MS to conduct and monitor an ex-ante and on-going assessment between
Paying Agency and Managing Authority on the verifiability and controllability
of measures. Finally, annual review meetings are organized at programme level,
with participation of Managing Authority and the Paying Agency, in which error
rate is dealt with.
Among the
Paying Agencies of the Member States, different forums are also in place, such
as the biannual Conference of Directors of Paying Agencies, the Learning
Network of Paying Agencies or the Panta Rhei Group for IT developments.
101.       (§191 - 2012/PAR/0398) The
Parliament calls, in order to remedy shortcomings in LPIS systems, for action
plans to be implemented promptly; calls, in the event of failure to comply with
the deadlines, for proportionate reduction and suspension of monthly or
intermediate payments to the Member States concerned in order to avoid creating
a financial risk to the budget of the Union.
Commission's
response:
The
Commission is taking the requested action. The legal framework (Article 41 of
Regulation No 1306/2013 of the European Parliament and of the Council on the
financing, management and monitoring of the CAP) clearly provides for the
conditions under which payments may be reduced or suspended. It may arise in
particular when one or more key components of the national control systems do
not exist or are not effective due to the gravity and persistence of
deficiencies found and if the Member State is not in a position to implement in
the immediate future the necessary remedial measures, in accordance with an
action plan with clear progress indicators.
It has
also to be noted that reductions and suspensions are temporary tools and that
the financial risk to the EU budget is ultimately covered by net financial
corrections stemming from the conformity clearance procedures.
102.       (§192 - 2012/PAR/0399) The
Parliament calls on the Commission to offset the entire financial risk of such
errors [the errors detected by the Court of Auditors in 2006 in France and Portugal] in the Union budget through net corrections.
Commission's
response:
The
Commission is taking the requested actions, but it would like to emphasize that
their accomplishment depends to a large extent on the progress made by the MS
in addressing the deficiencies (for example through action plans). 
The Court
confirmed in its Annual Report 2008 that EAGF expenditure was free from
material error (cf. paragraph 5.62). As regards the IACS, the Court reiterated
that it "generally is an effective and control system for limiting the
risk of irregular expenditure" (cf. paragraph 5.64).
The
Commission has taken the following measures to address the deficiencies in the
functioning of the national system in Portugal and France:
In Portugal: an action plan was launched in 2010 and reinforced in 2011. Audit missions
carried out in 2013 confirmed that the action plan had been implemented and
that the LPIS deficiencies had been addressed for claim year 2013. The results
in respect of the error rate will be measurable by mid-2014 i.e. final payments
for claim year 2013. While the deficiencies identified persevered for several
years, the EU budget was protected via the conformity clearance procedures
which ensured the claw back of over 100 million EUR in net financial
corrections for the claim years 2006 to 2008. For the subsequent claim years
conformity clearance procedures are on-going in order to ensure that any undue
expenditure is recovered:
- Claim
years 2009-11: finalization of clearance procedure expected by end by end-2014;

- Claim
year 2012: finalization of clearance procedure expected by mid-2015.
In France prior to 2008 no serious deficiencies were detected which would have merited a
reservation, an action plan or significant financial corrections. As
deficiencies were detected from 2008, a number of significant financial
corrections have been proposed in respect of financial years 2008-2010 for
which the clearance of accounts procedure is very advanced. Conformity
procedures are also ongoing for the subsequent years. In addition, in the
meantime (in 2013) an ambitious and thorough action plan for France has been set up to cover the weaknesses in the LPIS, the controls of
cross-compliance, and the controls for non-area coupled aids. A mission carried
out in February 2014 showed that while the plan is on track, some intermediate
commitments have not been met. Consequently, France has been requested to
tackle these issues and at the same time a more detailed reporting has been
requested so as to enable a more hands-on follow-up by DG AGRI.
103.       (§194 - 2012/PAR/0400) The
Parliament considers it necessary, however, for the conformity procedure to
have its full effect to accelerate the procedure and to further improve the
criteria and methods for the application of net financial corrections beyond
the new guidelines foreseen.
Commission's
response:
The
Commission has taken the requested actions; however it considers that to 'go
beyond the new guidelines' is disproportionate. 
The
Commission shares the view of the Parliament and is taking actions to improve
and speed up the conformity procedure as following:
- The new
Horizontal Regulation Reg. which 1306/2013) was adopted by the European
Parliament and the Council on 17 December) describes precisely the nature,
scope and sequence of the successive steps, as well as the different types of
financial corrections. 
-
Provisions in the delegated act (method and criteria for calculating the
financial correction) and implementing acts (details of the conformity
procedure, with deadlines for each step of the procedure (adopted on 6 August
2014) further streamline the legal framework and limit the risk of unnecessary
delays.  
- On that
stronger basis, DG AGRI will intensify its monitoring of the progress of the
conformity procedures to ensure a strict respect of the deadlines. 
As regards
financial corrections the Commission determines the amount on the basis of
proportionality principle and taking into consideration the nature and gravity
of the infringement. Where it is not possible to calculate the actual
/extrapolated damage caused to the EU budget flat-rates are used. Also, new
guidelines were established for applying financial corrections in case of
non-compliance with the public procurement rules. 
Where
weaknesses identified are so serious that they constitute a complete failure to
comply with EU rules the rate of correction may be fixed at an even higher
rate, up to 100 % of the expenditure concerned. Going beyond would de facto
correspond to applying sanctions for which there would be no EU legal basis.
See also
reply to request no 2012/PAR/0307
Regional
Policy, Energy and Transport
104.       (§201 - 2012/PAR/0401) The
Parliament calls on the Commission to step up monitoring of national and
regional management and control systems in the light of this finding [errors of
the same kind continue to be identified, often in the same Member States], and
to ease monitoring in countries where management and control systems have
proved reliable.
Commission's
response:
The
Commission has taken the requested action. Through the results of its audit
enquiry “review of the work of audit authorities”, DG Regional and Urban Policy
assesses if it can rely principally on the audit authorities' audit opinion and
error rates for its annual assurance and implement Article 73 of Regulation
(EC) No 1083/2006 (through the latter, DG Regional and Urban Policy relies on
the audit authority in a formal manner and does not carry its own audits any
longer). Up to end 2013, DG Regional and Urban Policy carried out a total of
232 missions on the spot cumulatively since 2009, including 48 fact-finding
missions to validate the Annual Control Reports' error rates. Audits covered
cumulatively the main 47 ERDF/CF audit authorities - out of 73 - responsible
for more than 96% in total of the ERDF/CF total allocation.
Audit work
included the on-the-spot re-performance of audits at the level of individual
beneficiaries in order to test the reliance which can be placed on the audit
work carried out by the audit authorities (in 2013, this was the case for 24
out of 28 audit missions carried out on the spot). As a result, and based on
the audit reports issued so far, the Directorate-General concluded that the
work of 40 audit authorities in charge of auditing around 90% of ERDF/CF
allocations for the 2007-2013 period can in general be relied upon. 
The extensive
audit work under this enquiry, which represents half of the on-the-spot audit
work on average since 2009, has considerably contributed to DG Regional and
Urban Policy's overall assurance for the programmes covered by the reviewed
audit authorities through many aspects, such as increased assurance that the
annual control reports and reported audit opinions and error rates are
reliable; reduction of errors; concrete remedial action plans and significant
capacity-building for audit authorities. This extensive audit work has also
contributed to interruptions / pre-suspensions during the year and to the
necessary reservations expressed in the annual activity report when
deficiencies had not been remedied (for example in the case of the Slovakian
audit authority). 
In
accordance with Article 73 of Regulation (EC) No 1083/2006 and as a direct
result of its audits to review the work of audit authorities, the
Directorate-General has concluded that it could formally rely on the work of 17
reviewed audit authorities presenting satisfactory audit results and covering
57 programmes, taking also into account the effective functioning of the
management and control system of these concerned programmes (second condition
under article 73).
At end
2013, DG EMPL had audited 85 AAs out of 91, covering 99% of the ESF total
allocation. The Commission selected most audit authorities to be audited on the
basis of an annually updated risk assessment which includes, among several risk
criteria reviewed over time, programmes allocations. 
Using also
other sources of assurance, DG EMPL concluded that for the year 2013 the work
of 106 audit authorities out of 117 can be relied upon.
The
results of the audit work are used by the Commission to assess whether it can
rely principally on the opinion of the Audit Authority with regards to the
effective functioning of the systems. In this case, the Commission carries its
own on-the-spot audits only if there is evidence to suggest shortcomings in the
system affecting the expenditure certified to the Commission. In application of
article 73 of the Regulation 1083/2006, DG EMPL has informed in 2013 one
additional Audit Authority (DE-Hessen) that it will mainly rely on their
opinion. In total, 10 Audit Authorities fulfil the conditions for article 73
(BE (2 AAs), DE (4), ES (1), IT (2) and NL (1)). In addition, 1 Audit Authority
(IT-PON GAS) has been granted the same reliance on the basis of the article 74
of the Regulation 1083/2006.
Guidance
is continuously improved and discussed with audit authorities. In particular
guidance on sampling methods for audit authorities was updated in April 2013
and accompanied by detailed sampling training sessions/workshops with most
audit authorities in order to clarify any implementation difficulties
encountered (practical workshops in November 2012 in Brussels for audit
authorities from 22 Member States; on-the-spot seminars in Italy (end 2012),
Germany, Spain, Ireland, Slovakia, Nordic and Baltic countries in 2013).
Further written clarifications to the guidance notes on annual control reports,
audit opinions and the treatment of errors, as a result of the June technical
meeting, were also provided to audit authorities in December 2013. Guidelines
laying down common rules on determining financial corrections to be applied for
financial instruments were discussed with the Member States in 2013 and will be
issued in 2014. This will help audit authorities quantify errors detected in
the samples of operation they audit in a harmonised way, and thus further
reinforce the reliability of reported error rates in this area.
105.       (§207 - 2012/PAR/0402) The
Parliament calls on the Commission on the basis of an independent audit
procedure to perform audits of final beneficiaries and granting authorities in
year ‘n+1’ in those Member States which have attracted attention because of
shortcomings in administrative and audit systems in year ‘n-1’; calls therefore
for a comprehensible automatic system.
Commission's
response:
The
Commission has taken the recommended action and included in its audit strategy
for cohesion policy focused and risk-based audits enquiries to tackle
shortcomings at the level of managing authorities. 
See reply
§ 5 – 2012/PAR/301
106.       (§208 - 2012/PAR/0403) The
Parliament calls on the Commission, during the 2014-2020 programming period,
itself to audit, by means of random samples taken by itself, all operational
programmes which have attracted attention because of the level of funding, the
frequency of errors or shortcomings in supervisory and control systems.
Commission's
response:
The term
"random samples" is misleading in this context, since the EP seems to
ask for risk based audits (see also request 2012/PAR/0325). The Commission is
sampling on a risk base.
Concerning
the request to increase the audits on managing authorities, please see reply to
2012/PAR/0402.
107.       (§209 - 2012/PAR/0404) The
Parliament calls on the Commission already to present them [audit guidelines]
in the run-up to the 2013 budget discharge procedure; calls for clear
indications, to this end, of the extent to which Member States and programmes
which have attracted attention in the past are being subjected to a special audit
approach and the extent to which net financial corrections can be accelerated;
considers that this approach should also be reflected in forthcoming delegated
acts.
Commission's
response:
The
Commission has taken the requested action and put in place a single audit
strategy for the 2014-2020 period for ERDF, ESF, CF and EMFF for the years
2014/2015 (Ares(2014)1192851) that covers the requests raised by the EP and in
time for the 2013 discharge.
108.       (§210 - 2012/PAR/0405) The
Parliament calls on the Commission to do everything in its power to shorten the
adversarial procedures preceding the imposition of net corrections or
interruptions of payments; calls on the Commission, before the 2013 discharge
procedure, to report on the progress made.
Commission's
response:
The
Commission has taken the requested action. On the shortening of contradictory
procedures for financial corrections, the Commission has committed itself in
the 2008 Action Plan that contradictory procedures related to financial
corrections have to be finalised within 24 months after the audit. The
Commission is meeting this objective.
Concerning
"the adversarial procedures preceding the […] interruptions of
payments", the Commission points out that there is no adversarial
procedure to interrupt payment deadlines. An interruption is an administrative
act that takes place without such a procedure.
The
submitting of a proposal is understood preparing the delegated acts. The
Commission has adopted delegated acts governing areas under shared management
under the new Multiannual Financial Framework (MFF) 2014-2020. The delegated
act based on the CPR provides detailed rules to enable the mechanism of
financial corrections to work effectively by defining clearly the criteria for
determining "serious deficiencies" which trigger the procedure for
net financial corrections (NFC) (see Article 30 of Commission delegated
regulation 480/2014 of 3 March 2014).
109.       (§212 - 2012/PAR/0406) The
Parliament impresses on the Commission that it needs to continue to pursue the
greatest possible simplification in order to avoid to the maximum any
possibility of error.
Commission's
response:
The
Commission notes that under shared management in cohesion policy, Member States
draft the eligibility rules for programmes.
See reply
§ 4 – 2012/PAR/300
110.       (§216 - 2012/PAR/0407) The
Parliament expects the detailed and operational criteria that will allow the
Commission to apply the notion of ‘serious deficiency’ to be laid down in a
delegated act.
Commission's
response:
See reply
§ 39, 4th indent – 2012/PAR/0315
111.       (§219 - 2012/PAR/0408) The
Parliament calls for a better coordination of public procurement rules at the
level of all stakeholders and a simplification and harmonisation of rules and
financial corrections.
Commission's
response:
The
Commission is taking the recommended actions. It has updated in 2013 its
decision on the quantification of public procurement errors in shared
management, including inter alia cohesion spending and rural development (see
Commission decision C(2013)9527 final).
For a
better coordination on the new guidelines on financial corrections for
non-compliance with rules on public procurement, DG Regional and Urban Policy
developed together with European Structural and Investments Funds (ESIF) DG's
and jointly with DG Internal Market and Services a Public Procurement Action
Plan. This includes regular exchanges in a working group to ensure coherent
approaches to common problems and to identify gaps where common actions are
required. The Action Plan covers i.a.:
SHORT TERM
PRIORITY
•        the
preparation of practical guidance for practitioners on avoiding of common
errors linked to Public procurement in ESI Funded projects, 
•        country
specific Action Plans in Member States with weaker administrative capacity, 
•        Pilot
Integrity Pacts for public procurement and contract management 
•        Stock
taking and analyses of Member States' lessons learnt, dissemination of tools
and good practices in order to improve public procurement capacity
•        Compilation
and analysis of public procurement evidence/ indicators on performance for
assessment of ex ante conditionality on public procurement for negotiations
2014-2020 programmes. This covers as well training/guidance on how to prepare
and follow-up on Action Plans to address weaknesses in case the ex ante
conditionality is not/partially fulfilled by a MS.
MID TERM
PRIORITY
•        Preparation
for new PP Directives (by 2016) – training, dissemination of guidance
•        A
new transparency initiative against corruption in Public Procurement (e.g.
integrity pacts, use of "red-flags") 
•        Assessment
of current practices and scope to improve further public procurement
professionalization linked to funds
•        Training
on public procurement as a strategic tool for Cohesion Policy (e.g.
e-procurement, Green public procurement, Innovation).
112.       (§221 - 2012/PAR/0409) The
Parliament demands the Commission to annually involve Parliament in due time
into TEN-T/CEF co-financing, with information on the choice of transport
infrastructure projects and amounts; asks the Commission to provide Parliament
annually with lists of transport projects and amounts of co-financing through
the regional and cohesion funds.
Commission's
response:
The
Commission is taking the requested action.
1. As
restated by Vice-President Siim Kallas in a letter to Brian Simpson dated 3rd
February 2014, in order to maintain a high quality political dialogue with the
members of the TRAN committee, the Commission services are ready, as in the
past, to participate in meetings of the TRAN coordinators or of the TRAN
committee whenever requested in order to keep the committee fully informed on
all aspects related to the implementation of the Connecting Europe Facility,
including the preparation of future delegated acts.
2. As far
as Cohesion Policy is concerned, the Common Provisions Regulation foresees that
each year we will provide a summary report summarising the Annual
Implementation Reports (AIRs) received by the MS. Since the AIRs contain
information on the financial execution and outputs by priority axis and
specific objective, Commission services will be able to present information by
thematic objective, including transport. The AIR will also provide information
on the state of progress of implementation of major projects. 
A more
detailed strategic report will be prepared by the Commission in 2017 and 2019
and will include a detailed analysis of breakdown by category of expenditure.
This would therefore provide more information on transport expenditure.
Hence,
that information on major projects approved in the transport sector will be
provided to the EP in the framework of the report foreseen in article 53.1 of
the CPR. Moreover, EP will be informed of the amount of expenditure by thematic
objective at the same time.
113.       (§222 - 2012/PAR/0410) The
Parliament calls on the Commission to define and take rapid action to address
the weaknesses of the audit system in the policy areas of cohesion.
Commission's
response:
The
Commission has taken the requested action. The Commission is carrying out an
extensive audit enquiry to review the work of audit authorities before deciding
to formally rely on their work, including through the re-performance of audits
on operations performed by the audit authorities. A total of 232 missions have
been carried out on the spot cumulatively since 2009: 177 audit missions
(including 28 in 2013) and 7 monitoring missions (5 in 2013), as well as 48
fact-finding missions (12 in 2013) to validate the error rates reported by
audit authorities in the Annual Control Reports. Audits covered cumulatively
the main 47 audit authorities responsible for more than 96% of the ERDF/CF
total allocation. DG Regional and Urban Policy’s audit work included the
on-the-spot re-performance of audits of operations at the level of individual
beneficiaries in order to test the reliance which can be placed on the audit
work carried out by the audit authorities (in 2013, this was the case for 24
out of 28 audit missions carried out on the spot). As a result, and based on
the audit reports issued so far, the Directorate-General concluded that the
work of 40 audit authorities in charge of auditing around 90% of ERDF/CF
allocations for the 2007-2013 period can in general be relied upon.
As it
concerns the ESF, at end 2013 DG EMPL had audited 85 AAs out of 91, covering
99% of the ESF total allocation. The Commission selected most audit authorities
to be audited on the basis of an annually updated risk assessment which
includes, among several risk criteria reviewed over time, programmes
allocations. Using also other sources of assurance, DG EMPL concluded that for
the year 2013 the work of 106 audit authorities out of 117 can be relied upon.
The results of the audit work are used by the Commission to assess whether it
can rely principally on the opinion of the Audit Authority with regards to the
effective functioning of the systems. In this case, the Commission carries its
own on-the-spot audits only if there is evidence to suggest shortcomings in the
system affecting the expenditure certified to the Commission. In application of
article 73 of the Regulation 1083/2006, DG EMPL has informed in 2013 one
additional Audit Authority (DE-Hessen) that it will mainly rely on their
opinion. In total, 10 Audit Authorities fulfil the conditions for article 73
(BE (2 AAs), DE (4), ES (1), IT (2) and NL (1)). In addition, 1 Audit Authority
(IT-PON GAS) has been granted the same reliance on the basis of the article 74
of the Regulation 1083/2006. Guidance is continuously improved and discussed
with audit authorities. In particular guidance on sampling methods for audit
authorities was updated in April 2013 and accompanied by detailed sampling
training sessions/workshops with most audit authorities in order to clarify any
implementation difficulties encountered (practical workshops in November 2012
in Brussels for audit authorities from 22 Member States; on-the-spot seminars
in Italy (end 2012), Germany, Spain, Ireland, Slovakia, Nordic and Baltic
countries in 2013). Further written clarifications to the guidance notes on
annual control reports, audit opinions and the treatment of errors, as a result
of the June technical meeting, were also provided to audit authorities in
December 2013. Guidelines laying down common rules on determining financial
corrections to be applied for financial instruments were discussed with the
Member States in 2013 and will be issued in 2014. This will help audit
authorities quantify errors detected in the samples of operation they audit in
a harmonised way, and thus further reinforce the reliability of reported error
rates in this area.
114.       (§223, 2nd indent -
2012/PAR/0411) The Parliament points out that the Commission must
perform more audits of final beneficiaries and authorising authorities in year
‘n’ in Member States where shortcomings have been found in administrative and
audit systems in year ‘n-1’ systems.
Commission's
response:
The
Commission has taken the recommended action and included in its audit strategy
for cohesion policy focused and risk-based audits enquiries to tackle
shortcomings at the level of managing authorities. 
See reply
§ 5 – 2012/PAR/301
115.       (§223, 3rd indent -
2012/PAR/0412) The Parliament points out that the Commission must
commit itself to audit all operational programmes at least once in the course
of the programming period.
Commission's
response:
The
request is not in line with the concepts of single audit, cost-efficiency in
the use of limited audit resources and the rapporteur's request and objective
to target Commission's audits to risky programmes, as we currently do. The
single audit approach as praised by the ECA since 2004 allows the Commission to
have audit results and opinions for each programme every year as from the start
of the programming period. The Commission has to ensure that audit authorities'
work is reliable.
116.       (§223, 4th indent -
2012/PAR/0413) The Parliament points out that the Commission must
report in time for the 2013 discharge procedure on the operational
applicability of the term “serious deficiencies” in the delegated act and on
the net financial corrections it generated.
Commission's
response:
See reply
§ 39, 4th indent – 2012/PAR/0315
117.       (§224 - 2012/PAR/0414) The
Parliament looks to the Commission to launch an investigation into the scale of
such improper use of EU funding in connection with projects involving less than
EUR 50 million and projects under shared management; looks similarly to the
Commission to make sure that EU funding which is disbursed in contravention of
the rules is paid back.
Commission's
response:
The
Commission notes that it is the Member States and their authorities that select
and implement the co-funded projects and are responsible for ensuring their
compliance with applicable rules. Only in the case of major projects – i.e.
projects where the total eligible costs exceed EUR 50 million (or EUR 70
million in the case of transport infrastructure) does the Commission approve
the financial contribution on the basis of a quality review of the project. 
As regards
the major projects, under the legal framework applicable for the programming
period 2014-2020, as part of the approval procedure, the Commission will
satisfy itself that the Member State has obtained the necessary information to
provide assurance that the financial contribution from the Funds will not
result in a substantial loss of jobs in existing locations within the Union. 
For non-
major projects, in the context of the negotiations of the operational
programmes the Commission will seek to obtain a commitment from the Member
States that where an assistance is granted from the Funds to a large
enterprise, the managing authority shall assure itself that the financial
contribution from the Funds does not result in a substantial loss of jobs in
existing locations within the Union. 
In
addition, the Commission will monitor the respect of the rules on the
durability of operations as set out in article 71 of Regulation 1303/2013 ('the
Common Provision Regulation'). Finally, as set out in Article 85 of the Common
Provisions Regulation, expenditure which is in breach of applicable law shall
be excluded from Union financing: in such a case, the Commission shall make
financial corrections by cancelling all or part of the Union contribution to a
programme and effecting recovery from the Member State.
118.       (§225 - 2012/PAR/0415) The
Parliament insists that the Commission make sure that EU structural fund monies
are not used in a way which directly or indirectly supports the relocation of
services or production to other Member States.
Commission's
response:
The
Commission has taken the requested action. Under the legal framework related to
the 2014-2020 programming period, provisions guaranteeing that investments in
businesses and infrastructures are long-lasting and prevent the ESI Funds from
being used to undue advantage have been put in place.
Provisions
concerning the durability of operations are set out in Article 71 of the Common
Provisions Regulation (CPR) (Regulation No1303/2013 of 17 December 2013). 
According
to Article 71 (1), an operation comprising investment in infrastructure or
productive investment has to repay the contribution from the ESI Funds if
within five years of the final payment to the beneficiary or within the period
of time set out in State aid rules, where applicable, there is a cessation or
relocation of a productive activity outside the programme area (i.e. within another
region of the same Member State or in another Member State). Sums unduly paid
in respect of the operation are to be recovered by the Member State in proportion to the period for which the requirements have not been fulfilled. In case
of SMEs Member States may reduce the time limit to three years in cases
concerning the maintenance of investments or jobs created by SMEs.
Operations
supported by the ESF and operations supported by the other ESI Funds  not
entailing productive investment or investment in infrastructure are excluded
from the general requirement of durability, unless such requirements are
derived from applicable State aid rules. The provisions on durability do not
apply either to contributions to or by financial instruments. 
Furthermore,
Article 125(3)(f) of the CPR introduces a specific obligation for the Managing
Authority to ensure in the project selection process that the selected
operations do not include activities which were part of an operation which has
been or should have been subject to a procedure of recovery following the
relocation of a productive activity outside the programme area.
Commission Task
Force for Greece
119.       (§229 - 2012/PAR/0416) The
Parliament requests the Commission to inform the Parliament in detail about the
problems encountered with those projects [projects at risk being part of the
181 priority projects identified by the Group].
Commission's
response:
The
priority projects were an initiative of Commissioner Hahn to make the added
value of structural funds for growth and jobs more visible for the citizens.
Even though the TFGR was active for some of the priority projects (solid waste,
cadastre, ICT projects, motorways), DG REGIO was monitored for the vast
majority of them and invested significant resources in the supervision. DG
REGIO together with the TFGR (for some priority projects only) is performing a
very close follow-up of these projects and proposed remedial measures where
appropriate. Upon DG REGIO's request, the Greek authorities submit regularly a
report to the Commission on the state of play of implementation of these
projects. The Greek authorities have created a website
(http://www.anaptyxi.gov.gr) where progress of these projects, their problems
and timing can be seen. 
For the
projects at risk, as estimated by the Greek authorities, specific problems were
encountered during implementation and hinder their timely completion. The main
problems include delays at maturing the project and subsequently late contracting,
expropriation procedures, and lengthy court proceedings (i.e. appeals). The
Greek authorities continue their efforts to resolve the problems and in cases
where the timetables set a completion date of the project beyond the
eligibility period, they could eventually examine the possibility of phasing
the project with the programming period 2014-2020 if these projects fulfil the
objectives and eligibility rules of the new period. Otherwise the rules for
financial corrections will apply. The Commission have laid down in the MOU (the
memorandum for economic adjustment) that these priority projects should be
finalised by December 2015. Greek authorities are therefore not only bound by
the regulation but also by the MOU conditions.
120.       (§230 - 2012/PAR/0417) The
Parliament requests that the Commission evaluate the possibility to establish a
Task Force for those Member States that struggle with the implementation of
Union funds.
Commission's
response:
The
Commission, as outlined in the Letter of Commissioner Semeta to the EP CONT
Committee of 10 March 2014, has put in place mechanisms to follow up and report
on the implementation of EU funds. By implementing the measures proposed
therein, the Commission committed itself to address the Parliament's concern as
regards the implementation of the EU Budget.
Employment and
social affairs
121.       (§236 - 2012/PAR/0418) The
Parliament calls on the Commission to report on progress in implementation of
the simplified cost option by Member States in the run-up to the 2013 discharge
procedure.
Commission's
response:
In
November 2013 the Commission produced a report on "Simplification and
gold-plating in the ESF" identifying the main sources of error due to
unnecessary complicated national eligibility rules and addressing some
recommendations to the Member States, based in particular on the use of SCOs.
The use of
SCOs is particularly suitable for the type of expenditures reimbursed in ESF
projects. The Commission actively promoted their use through seminars which
were held by DG EMPL in all MS.
The new
legal framework for the 2014-2020 programming period should facilitate a
further increase of the use of SCOs. The Commission set the objective of using
SCOs for up to 50% of ESF transactions by 2017, a target that is both realistic
and ambitious.
DG EMPL
will keep the European Parliament informed about progress with simplification.
122.       (§243 - 2012/PAR/0419) The
Parliament calls on the Commission to continue unremittingly its efforts to
bring about administrative simplification in the Member States.
Commission's
response:
The ESF
regulation for the new programming period in its preamble, paragraph 27,
encourages Member states to ensure the sound financial management of each
operational programme and its implementation in the most effective and
user-friendly manner possible, as well as to refrain from adding rules that
complicate the use of funds for the beneficiary. The use of Simplified Cost
Options (SCOs) is also encouraged (paragraph 25).
In line
with ECA's views that they are an effective tool for reducing the risk of
errors, it will enable simplifying financial management of operations while
shifting the focus of beneficiaries on the delivery of quality outputs and
results. The Commission set the objective of using SCOs for up to 50% of ESF
transactions by 2017.
The
Commission has actively promoted the introduction of Simplified Cost Options in
particular for ESF related programmes. In 2013 and 2014, seminars were held in
all MS in order to explain the usefulness and modalities of the introduction of
these features.
123.       (§244 - 2012/PAR/0420) The
Parliament calls on the Commission to respect the principle of the welfare
state, which is enshrined in the constitutions of many Member States.
Commission's
response:
In all its
actions the Commission respects the division of competences set out by the
Treaty.
As far as
cohesion policy funding is concerned, article 175 defines the possible scope of
EU financial support very broadly. It provides that "the Union shall also
support the achievement of these objectives (i.e. the strengthening of its
economic, social and territorial cohesion – article 174) by the action it takes
through the Structural Funds (European Agricultural Guidance and Guarantee
Fund, Guidance Section; European Social Fund; European Regional Development
Fund), the European Investment Bank and the other existing Financial
Instruments."
Any ESF
support, for example to promote social inclusion, that helps strengthen EU
economic, social and territorial cohesion and employment in line with article
162 is therefore in line with the Treaty. At the same time, EU funding does not
intend to replace or crowd out national investment in these policies but rather
to complement and enhance member States' efforts to support these policies. In
addition, thematic concentration requirements laid down in the ESF Regulation
(art.4) lay down provisions ensuring that ESF funding concentrates on the key
priorities and thus can generate real added value. The specific ex-ante
conditionality related to social inclusion as provided for in Annex XI of Reg.
(EU) No. 1303/2013 would ensure that the necessary strategic policy framework
is in place as a prerequisite for the quality of ESF investment in this policy
area.
As far as
policy action is concerned, the Treaty contains a number of relevant provisions
concerning EU competences in the social field, in particular article 5.3 TFEU
which provides for “The Union may take initiatives to ensure coordination of
Member States’ social policies”, articles 153 TFEU "the Union shall
support and complement the activities i.e. in the field of social security and
social protection of workers, 156 TFEU "the Commission shall encourage
cooperation between MS" and 160 TFEU "establishment Social Protection
Committee.
124.       (§245 - 2012/PAR/0421) The
Parliament calls for a policy to reduce youth unemployment which possesses
Union added value; regards the role of the Union as being in particular to
improve infrastructure for vocational training and further training; calls, in
this regard, for an ‘honest’ European subsidy policy which focuses far more on
transfers of know-how from Member States with low youth unemployment rates to
Member States where those rates are high, but without further arousing false
expectations and without further making promises on matters for which the Union
cannot assume primary responsibility.
Commission's
response:
The
Commission shares the EP’s views that the European Union has a crucial role to
play in the strengthening of infrastructure for vocational education and
training and underlines the importance of the European Alliance for
Apprenticeships, which is a platform that brings together public authorities,
business and social partners, VET providers, youth representatives and other
key actors such as chambers in order to coordinate and upscale different
initiatives for successful apprenticeship type schemes, as well as to promote
national partnerships for dual vocational training systems.
The
Commission agrees that know-how and best practice transfer is an important tool
to combat youth unemployment. Within the framework of transnational cooperation
under the ESF for the 2014-20 period, the Commission will support networks and
platforms to enhance the exchange of experience and good practice across ESF
Managing Authorities and other relevant stakeholders and to support future
synergies between Member States /regions around issues of common interest. One
of them will be dedicated to youth employment.
Furthermore,
the Commission-led Mutual Learning Programme (MLP)1 has been supporting Member
States since 2005 to exchange good practice and learn from each other. In the
specific field of youth employment, the MLP regularly organises seminars,
workshops and learning exchanges where experts and officials from national
administrations analyse in detail the challenge of transferring good practice
between regions and how to improve national measures to combat youth
unemployment.
For
example, under the MLP, the Commission organised a working and learning seminar
on Practical support for the design and implementation of Youth Guarantee
Schemes for national authorities in October 2013.
The
Commission also agrees that Member States assume primary responsibility for the
implementation of policies to combat youth unemployment. In addition, the
Commission is convinced of a strong added-value of benchmarking to ensure
suitable outcomes for young people. The Youth Guarantee is such a benchmarking
and outcome-oriented approach as Member States have committed to ensuring that
all young people under the age of 25 years receive a good-quality offer of
employment, continued education, an apprenticeship or a traineeship within a
period of four months of becoming unemployed or leaving formal education. 
It is up
to Member States to decide on how they achieve these outcomes for young people
taking account of national, regional and local circumstances. The Youth
Guarantee is a joint initiative of the EU and Member States that can achieve
real structural change through consistent implementation helped by monitoring
and peer review, regular exchange of best practice and coordinated use of
national and European funding. The Council Request on establishing a Youth
Guarantee was adopted by the European Council in April 2013 and is currently
being implemented in the Member States.
125.       (§249 - 2012/PAR/0422) The
Parliament demands clarification regarding a major case of fraud in connection
with the ESF in Spain; expects the Commission to provide information that might
explain why this case was not noticed by any of the bodies responsible for
control, and whether OLAF was involved; demands clarification as to whether the
European Court of Auditors was aware of this case; demands to know how many
similar cases have occurred in the past.
Commission's
response:
OLAF was
informed of the case in December 2013. After analysis, it decided to dismiss
the case on the grounds of not being competent to act, given that it was not
clear whether ESF funds have co-financed the training courses affected by the
potential fraud. The Certifying Authority in Spain has subsequently confirmed
that no ESF money was used during the programming Period 2007-2013 to fund the
online training activities in question. Should new facts emerge indicating that
ESF might be involved, OLAF could consider opening an investigation.
Nevertheless,
as some of the activities might cover the last part of the programming period
2000-2006, on 15/04/2014 the Commission requested from the Spanish managing
authority further information whether any expenditure linked to this case was
certified to the Commission as part of the ESF Operational Programmes
2000-2006.
126.       (§250 - 2012/PAR/0423) The
Parliament reiterates its call to monitor the financial instruments, particularly
ESF, European Globalisation Fund, relevant components of the Instrument for
Pre-Accession Assistance and the European Progress Microfinance Facility, and
measure their performance against the specific policy goals laid down by the EU
2020 strategy, as well as in the annual European Semester policy process.
Commission's
response:
Europe
2020 is a common endeavour of Member States and the Commission and different
processes are used to report on Europe 2020. At the same time, the legal acts
supporting the spending programmes under the new MFF confirm that the
programmes are designed to contribute to the Europe 2020 strategy. Therefore,
the reporting on these programmes will also generate information on the
contribution of spending programmes to the Europe 2020 strategy, but not in a
comprehensive way.
.Already
in the 2007-2013 programming period Member States which entered the Union
before 1 May 2004 had to earmark an important part of the expenditure of the
ESF and ERDF to the European Union priorities of promoting competitiveness and
creating jobs, including meeting the objectives of the Integrated Guidelines
for Growth and Jobs (i.e. at least 75% of expenditure for the Regional
competitiveness and employment objective and 60% of expenditure for the Convergence
objective, art.9.3 reg. 1083/2006). The annual implementation reports explain
how the ESF contributes to the Europe 2020 strategy and the country specific
recommendations issued in the framework of the European semester.
In the
current programming period the link between the ESI funds and the Europe 2020
strategy is reinforced as the thematic objectives established by the Common
Provisions Regulation are aligned to the Europe 2020 Strategy. Moreover, Member
States have to select their funding priorities (thematic objectives and
investment priorities) on the basis of a strategic analysis assessing MS
performance as regards the EU headline targets and taking into account the
challenges identified by the country specific recommendations. According to the
needs identified, specific objectives - identifying the change and results to
be achieved by the programme (result orientation) – will be set and clear and
measurable milestones (for 2018) and targets (for 2023) will be established in
order to measure and ensure progress as planned.
The new
performance framework will introduce a considerable change in the monitoring of
the performance of the MS. It is indeed associated with a performance reserve
(6% of the resources allocated to the ESI Funds, except for i.a. resources for
the European territorial cooperation goal and resources allocated to the Youth
Employment Initiative). The performance reserve will be allocated to programme
priorities which have met their milestones. In case of serious failure to achieve
milestones and targets, payments may be suspended following the performance
review and financial corrections applied at closure.
EGF
The link
between the EGF and the goals of the Europe 2020 strategy has been emphasised
in the new EGF Regulation (2014 - 2020) which lays down the conditions for the
functioning of the Fund in the current programming period.
The
wording of the regulation reflects the link between the priority for inclusive
growth of the Europe 2020 strategy and the goals of the EGF, i.e. overcoming
the adverse effects of globalisation and economic crises by providing
tailor-made support for redundant workers to help them back into employment as
quickly as possible.
In its
recently published Annual Report on the EGF, the Commission reported that in
2012 it had received 11 applications, related to 6 sectors, from 9 MS,
targeting 10 403 workers, requesting a total of EUR 58.5 million.
Concerning
IPA, based on a Strategic Coherence Framework which highlights the strengths
and weaknesses opportunities and threats and a description of the objectives
pursued, the Operational programmes contain, inter alia information on the
priority axis and related measures and result and output indicators and their
specific targets. These indicators and targets make possible to determine the
progress for implementing the measures including the effectiveness of the
targets attached to the priority axis and measures.
During the
implementation of the Multi-annual programme, the Candidate Country is obliged
to submit following documents:
-
Evaluations linked to the monitoring of the Operational Programme, in
particular where this monitoring reveals a significant departure from the goals
initially set;
- Annual
implementation report which shall be examined by the sectorial monitoring
Committee before transmission to the Commission. This report includes
quantitative and qualitative progress made in implementation;
- Regular
request for interim payments.
In
addition to a Joint IPA Monitoring Committee, a Human Resources Development
monitoring Committee co-chaired by the Commission shall meet at least twice a
year to review progress made towards achieving the specific targets of the
Operational Programme and examine of the targets set for each priority axis and
measures. This monitoring Committee may also propose any revision or
examination of the programme likely to make possible the attainment of the
programmes objectives or to improve its management.
The
Commission understands also the importance of monitoring the use of the EPMF,
specifically in relation to EU 2020 policy goals of lifting 20 million out of
poverty and achieving the employment rate of 75%. To this end the following
activities are undertaken:
1. The
Commission receives from the EIF a bi-annual financial report and an annual
social report on the facility's implementation. These reports then serve as a
basis for the public Annual report, prepared by DG EMPL.
2. The
Commission is represented in the Investor's committee overseeing the
implementation of the EPMF funded instruments by EMPL C Director.
3. The
Commission approves applications for support under the EPMF guarantee
instrument.
4. In
August 2013, an interim evaluation of the EPMF has been started by an external
contractor.
External
relations
127.       (§258 - 2012/PAR/0424) The
Parliament urges the Commission to efficiently correct the errors detected and
to perform the recoveries efficiently.
Commission's
response:
As for the
2012 RER study, the errors identified in the 2013 RER study will be thoroughly
followed-up. The objective is to either make recoveries for the ineligible
amounts identified or to attach explanatory notes for cases in which such
recoveries cannot or will not be made.
128.       (§263 - 2012/PAR/0425) The
Parliament suggests, in light of these reports [Congo, Egypt, Palestine], that
the Commission and the Court of Auditors work closely together to further
develop both measurable indicators and the methodology of performance audits,
regarding Union funded projects with a high political nature, such as those
oriented towards strengthening the respect for human rights, the rule of law
and democracy, where a decision to continue or discontinue a project does not
only depend on actual results in a given time frame.
Commission's
response:
The
Commission does not consider carrying out performance audits in the future as
this would entail an overlap with the strategic evaluations regularly
undertaken by the Commission in the area of development and cooperation and
which methodology is already well-developed. The Court of Auditors already
carries out performance audits, even building sometimes on the evaluations
conducted by the Commission.
129.       (§265 - 2012/PAR/0427) The
Parliament urges the Commission to implement all recommendations [with regard
to the problems concerning the management of social allowances].
Commission's
response:
The
automatic update of the amounts of allowances of like nature has been
implemented and is fully operational. The automatic update already covers
Belgium, Luxembourg, Ireland, Germany, France, The Netherlands, Finland, Sweden
and Romania. Further extensions to Hungary, Austria and Latvia are currently
being developed. Hence, the vast majority of staff concerned (working mainly in
Brussels, Luxembourg and Strasbourg and the Joint Research Centres) are
covered. The files of those agents who receive national family allowances of
like nature from other Member States than the ones quoted are updated manually
given their low number. The agents concerned by this already have the
possibility to declare any indexations via the SYSPER2 module "declaration
of allowances of like nature. Furthermore, checks are performed in the framework
of existing procedures (entry into service, a posteriori-checks, and end of
service). 
Concerning
the declaration of allowances of like nature: in 2013, a module allowing the
declaration of such allowances has been implemented. Moreover, a module in
SYSPER2 which will permit each agent to declare the change of his/her spouse's
professional activity was launched at the end of June 2014. The declaration of
the income of the spouse for the entitlement to the household allowance will be
done on an annual basis. The entitlement to the household allowance is cut at
the end of the year except in cases where the entitlement is due (e.g. spouse
unemployed or receiving a pension). This module is also linked to the
declaration of the activity of the spouse in view of receiving health insurance
cover: there too, the declaration has to be renewed on an annual basis. 
The
declaration of the income of the spouse will only give a partial view on the
entitlements to allowances for dependent family members. The PMO does not plan
to organise an annual declaration of the family situation but envisages
introducing an automatic cut of the entitlement to allowances for dependent
children over the age of 18 for those agents who have not introduced the annual
education declaration. This change in practice will normally be introduced as
of the academic year 2014-2015: personnel are invited to introduce the school
declaration as of September 2014. Staff omitting to introduce a declaration
will see their allowances cut automatically. 
Regarding
pensioners, their family situation is checked every year for individuals who
receive child allowances. Moreover, for all other pensioners, the situation is
checked every two years (for pensioners older than 80, every year) on the basis
of a declaration which they have to fill in. The declaration of the allowances
of like nature is incorporated in the annual procedure inviting the pensioners
to give the updated situation regarding their children.
130.       (§265 - 2012/PAR/0428) The
Parliament encourages the Commission to speed up the roll-out of its new
programme to resolve it [the management of social allowances].
Commission's
response:
The
automatic update of the amounts of allowances of like nature has been
implemented and is fully operational. The automatic update already covers
Belgium, Luxembourg, Ireland, Germany, France, The Netherlands, Finland, Sweden
and Romania. Further extensions to Hungary, Austria and Latvia are currently
being developed. Hence, the vast majority of staff concerned (working mainly in
Brussels, Luxembourg and Strasbourg and the Joint Research Centres) are
covered. The files of those agents who receive national family allowances of
like nature from other Member States than the ones quoted are updated manually
given their low number. The agents concerned by this already have the
possibility to declare any indexations via the SYSPER2 module "declaration
of allowances of like nature. Furthermore, checks are performed in the framework
of existing procedures (entry into service, a posteriori-checks, and end of
service). 
Concerning
the declaration of allowances of like nature: in 2013, a module allowing the
declaration of such allowances has been implemented. Moreover, a module in
SYSPER2 which will permit each agent to declare the change of his/her spouse's
professional activity was launched at the end of June 2014. The declaration of
the income of the spouse for the entitlement to the household allowance will be
done on an annual basis. The entitlement to the household allowance is cut at
the end of the year except in cases where the entitlement is due (e.g. spouse
unemployed or receiving a pension). This module is also linked to the
declaration of the activity of the spouse in view of receiving health insurance
cover: there too, the declaration has to be renewed on an annual basis. 
The
declaration of the income of the spouse will only give a partial view on the
entitlements to allowances for dependent family members. The PMO does not plan
to organise an annual declaration of the family situation but envisages
introducing an automatic cut of the entitlement to allowances for dependent
children over the age of 18 for those agents who have not introduced the annual
education declaration. This change in practice will normally be introduced as
of the academic year 2014-2015: personnel are invited to introduce the school
declaration as of September 2014. Staff omitting to introduce a declaration
will see their allowances cut automatically. 
Regarding
pensioners, their family situation is checked every year for individuals who
receive child allowances. Moreover, for all other pensioners, the situation is
checked every two years (for pensioners older than 80, every year) on the basis
of a declaration which they have to fill in. The declaration of the allowances
of like nature is incorporated in the annual procedure inviting the pensioners
to give the updated situation regarding their children.
131.       (§271 - 2012/PAR/0429) The
Parliament calls on the Commission to reinforce efforts to better analyse,
document and explain the main types of errors and to take appropriate measures,
including consultation with relevant stakeholders, to reduce errors in the
future in particular in the relation to payments to international organisations
which accounted for 38 % of the overall RER.
Commission's
response:
The
requested action has been taken.
The Action
Plan to correct the weaknesses in DG DEVCO internal control system, drawn up
following the reservation made in DEVCO 2012 Annual Activity Report and
endorsed by Management in May 2013, already addresses the issue of an enhanced
cooperation with international organisations in terms of control of legality
and regularity. As the residual error rate for 2013 is above the established
materiality threshold again, a new reservation had to be issued in the 2013
AAR. The 2013 RER study having revealed that the typology of the errors is
similar to the one pointed out in the 2012 study, but that recurrent errors
linked to International Organisations still account for a significant part of
the error rate, it has been decided in a Management Meeting in May 2014 that
the Action Plan is still applicable, but additional Ad Hoc measures should
complement it so as to address new issues found in the RER study and the Court
of Auditors' 2013 DAS:
- A
recovery procedure will be launched for the transactions identified in the RER
for which supporting documentation has not been provided, for the ones for
which the recoveries has not been performed or documented and for all the
others for which an error has been estimated in the 2013 RER study;
- a
contradictory procedure will also be launched to suspend cooperation under
decentralised management mode (IMDA) with the organisations for which issues
have arisen regarding the availability of documentation.
Research and
other internal policies
132.       (§277 - 2012/PAR/0430) The
Parliament considers that the Commission and Member States should supply
auditors with all the necessary background material and training material to
facilitate correct auditing of cost statements.
Commission's
response:
The
Commission has undertaken several steps in order to address this request whose
aim is to increase the awareness of auditors for fulfilling its own role.
Firstly,
the Commission has been running a communication campaign to remind
beneficiaries and external auditors of the FP7 eligibility rules. In total,
there have been organized 22 events covering 22 Member States and associated
countries. These seminars have been attended by 3500 participants, including at
least 300 certifying auditors, and this number will increase since this
campaign will continue in 2014. National Contact Points have highly contributed
to the organization of these events.
Secondly,
the Commission services contact the certifying external auditors when the
Commission's ex-post audits identify material differences between the certified
cost statements and the ex-post audits' findings.
Finally,
the "Research Enquiry Service" replies to any questions raised by the
auditors.
133.       (§278 - 2012/PAR/0431) The
Parliament calls on the Commission to update this report [report on the subject
of simplification measures submitted by the Commission] for the 2013 discharge
procedure.
Commission's
response:
The
Commission will update its report on simplification measures.
134.       (§281 - 2012/PAR/0432) The
Parliament calls on the Commission to report whether the wrongly paid EUR 470
000 [declared for an ICT-PSP project] has been recovered.
Commission's
response:
The audit
file is currently on hold due to the need for undertaking additional special
procedures which are expected to be completed soon. The case is closely
monitored and the audit file will be closed as soon as possible in order to
enable the operational services to proceed with the eventual recovery of the
unduly paid funds.
135.       (§282 - 2012/PAR/0433) The
Parliament calls on the Commission to report on the status of projected
corrections relating to FP6.
Commission's
response:
The
Commission reported on this issue in the Annual Activity Report of DG Research
and Innovation for 2013. At the end of 2013 92.3% of audit results by number
and 81.6% by volume had been implemented, 84.1% of extrapolations had been
implemented by the end of 2013, up from 78.8% at the end of 2012.
136.       (§283 - 2012/PAR/0434) The
Parliament calls on the Commission to report on the progress in introducing SIS
II.
Commission's
response:
The
request is implemented. DG Home Affairs reported on the state of play of SISII
in its 2013 Annual Activity Report, where the reservation on SISII was lifted.
The entry into operation of SIS II took place on 9 April 2013 as decided by the
Council. Following an intensive monitoring period of 30 days, the system was
formally handed over to eu-LISA. The Commission granted the Final System
Acceptance to its contractor on 1 October 2013. There were no unforeseen events
which have triggered additional expenses. As a conclusion, the concrete events
that materialised in the course of 2012 and which justified the reservation did
not in the end produce the consequences expected. The SIS II has since been
functioning smoothly.
OLAF
137.       (§284 - 2012/PAR/0435) The
Parliament observes that the President of the Commission still has not accounted
to Parliament in plenary for the loss of office of Health Commissioner John
Dalli on 16 October 2012; insists on the necessity of respecting the
presumption of innocence and notes that the serious accusations of corruption
levelled at the Commissioner by the tobacco industry, which he has always
rejected, remain unproven to this day.
Commission's
response:
The
President of the Commission explained the situation to the Conference of
Presidents in November 2012. The point was never scheduled for the plenary and
the Commission has respected the principle of presumption of innocence at all
times.
138.       (§285 - 2012/PAR/0436) The
Parliament strongly deplores the fact that OLAF’s investigation of the
accusations has been seriously flawed, according to an analysis by the OLAF
Supervisory Committee, and that OLAF refuses to explain matters and is also not
being called to account in this respect.
Commission's
response:
The OLAF
Supervisory Committee has not said in its analysis that the investigation was
"seriously flawed". Furthermore, OLAF has already extensively and
repeatedly answered questions related to this investigation, orally (in CONT)
and in writing (in reply to questionnaires), within the limits set out respectively
in Article 8 of Regulation 1073/1999 and in Article 10 of Regulation 883/2013.
139.       (§286 - 2012/PAR/0437) The
Parliament draws attention to the reversal of the burden of proof in this case,
such that the focus is not on the culpability of the accused but it is
necessary for the accused himself to seek to prove his innocence before a
series of courts; draws attention to the fact that Mr Dalli has contested the
voluntary character and the lawfulness of his resignation before the General
Court of the European Court of Justice which might result in an award of
damages to the detriment of the taxpayer and has also launched an action in
defamation against Swedish Match before the Belgian authorities.
Commission's
response:
The
Commission attaches great importance to the presumption of innocence and has
always taken care not to pre-judge any actual culpability. The Commission has
explained many times the circumstances in which Mr Dalli resigned: it had
become politically untenable for him to remain in office and he therefore
decided to resign voluntarily. Mr Dalli has contested the voluntary character
and the lawfulness of his resignation, claiming damages before the General
Court of the European Union in Case T-562/12, which is pending.
140.       (§287 - 2012/PAR/0438) The
Parliament calls for complete clarification and for full and prompt cooperation
by the Commission with the courts in Belgium and Malta in the Dalli case and
for an independent inquiry into the methods used by OLAF in this case.
Commission's
response:
The
Commission and OLAF are, as always, fully cooperating with the judicial
authorities of the Member States. The Commission and OLAF have duly replied to
any request for information or assistance that they have received from the
authorities.
141.       (§288 - 2012/PAR/0439) The
Parliament is worried about the high financial indicators for opening an
investigation included in the Investigative Policy Priorities of OLAF for the
years 2012 and 2013 that are in the customs sector: EUR 1 million, in the
agriculture sectors: EUR 100 000 for SAPARD and above EUR 250 000 for
agriculture; in the structural funds: EUR 500 000 in the European Social Fund
as well as in the Cohesion Fund and EUR 1 million in ERDF, in the external aid
and centralised expenditure sectors: EUR 50 000 and also in the Union staff
sector: EUR 10 000; criticises that it is in the responsibility of the managing
DGs to care about possible fraud cases below these financial indicators without
having qualified staff at their disposal; sees taxpayers money and the
financial interest of the Union endangered.
Commission's
response:
OLAF’s
Investigation Policy Priorities (IPPs) in 2012 and 2013 included the following
selection principles: proportionality, efficient use of investigative resources
and subsidiarity/added value. These IPPs (2012, 2013) contained financial
indicators. Such indicators were not conceived or used by OLAF as an "exclusion
criterion", but were used as one of several criteria to assess whether an
investigation should be opened or not. The financial impact was never a
conditio sine qua non for opening an investigation. 
For 2014,
the Director-General decided not to include financial indicators in the IPPs,
considering that there has been, and to certain extent still is, a persistent
misunderstanding on this matter amongst OLAF's stakeholders, and how difficult
it is in most cases to assess the potential financial impact of a new case.
OLAF intends to monitor whether not having explicit financial indicators
available in the selection process leads to the opening of too many cases for
the Office to handle. If so, the Director-General will give consideration to
their possible reintroduction, in close consideration with OLAF's stakeholders
and its Supervisory Committee.
The total
percentage of cases opened by OLAF between 1 February and 31 December 2012 in
all sectors of activity where the financial impact was either unknown at the
time of the opening or below the financial indicators set was 78%. Had the
financial indicators been an exclusion criterion or a threshold, none of these
cases would have been opened. As far as the European Regional Development Fund,
the Cohesion Fund, the European Social Fund and the European Fisheries Fund are
concerned, the percentage of cases during the same period where the financial
impact was either unknown at the time of the opening or below the financial
indicators set was 74%.
In 2013, no
cases were dismissed on the basis of the mere application of the
"financial indicators" in the agriculture sector (encompassing all
the following subsectors: EAFRD, EAGF, EAGGF – Guarantee, IPARD and SAPARD).
In the
rare instances when a case is dismissed under the principles of subsidiarity
and proportionality, and might require investigation, the case is transmitted
by OLAF to the competent national authorities.
142.       (§289 - 2012/PAR/0440) The
Parliament notes that it has not received eight months after the adoption of
Parliament's resolution on the protection of the financial interest 2011 in
plenary, the legal analysis of the legality of recordings of private phone
conversations during administrative investigations concerning members of the
Union institutions and Union officials conducted by OLAF requested in paragraph
75 of that resolution.
Commission's
response:
OLAF has
already informed CONT that, under Article 4 (3), second subparagraph, of
Regulation (EC) No 1073/1999, OLAF was entitled to obtain information pertinent
to its investigations. OLAF considers that it has acted in accordance with
applicable rules and regulations. 
A first
version of a comprehensive internal study on the legality of recordings of private
phone conversations by public authorities in the Member States has been shared
with OLAF's investigative staff, and is continuously being improved and
updated.
143.       (§290 - 2012/PAR/0441) The
Parliament is deeply concerned about the findings of the Supervisory Committee
that OLAF has not established a prior legality check for investigative measures
other than those specifically listed in OLAF's Instructions to Staff on
Investigative Procedures (ISIP); notes that this endangers respect for the
fundamental rights of, and procedural guarantees relating to, the persons
concerned.
Commission's
response:
OLAF
conducts its investigative activities while respecting all procedural
requirements. The OLAF Supervisory Committee did not identify any breaches of
fundamental rights or procedural guarantees in its Activity Report in relation
to persons concerned. Therefore the concerns raised are merely hypothetical.
Regulation 883/2013 specifies procedural guarantees and reinforces the rights
of the persons concerned. OLAF's actions are subject to review by the Courts.
In addition, the provisions listed in the ISIP were sufficient for OLAF to
perform a meticulous legality, necessity and proportionality check prior to
taking any action that would endanger the respect for the fundamental rights
of, and procedural guarantees relating to, the persons concerned.
The
Commission submitted a proposal for a Regulation amending Regulation 883/2013
in June 2014, aimed at further strengthening procedural guarantees of persons
concerned by OLAF’s investigations by introducing an alternative complaint
procedure for individuals concerned by OLAF's investigations and by reinforcing
institutional procedural safeguards of the Members of EU institutions.
144.       (§291 - 2012/PAR/0442) The
Parliament notes that breaches of essential procedural requirements during
preparatory investigations could affect the legality of the final decision
taken on the basis of investigations by OLAF; assesses this as potentially
high-risk, since breaches would thus incur the legal liability of the
Commission.
Commission's
response:
OLAF
Guidelines to Staff on Investigative Procedures, which replaced the
Instructions to Staff on Investigative Procedures on 1 October 2013, are
intended to ensure that all investigations carried out by OLAF meet the highest
professional standards and fully respect the procedural rights of the persons
concerned. They set out a body of rules to ensure the procedural fairness of
all investigations, the respect of confidentiality and other obligations
emanating from the legislative framework within which OLAF conducts its
investigative activities.
One of the
tasks of OLAF's Investigation Selection and Review Unit is to carry out
legality checks including respect of procedural requirements at the different
stages of the investigation. This dedicated unit is staffed with experienced
and specialised members.
The
Commission is legally accountable for OLAF actions as OLAF has no separate
legal identity of its own. The Commission however emphasises that such
liability has only been found in exceptional cases. There is therefore no high
risk that OLAF would not respect essential procedural requirements.
145.       (§292 - 2012/PAR/0443) The
Parliament deems the direct participation of OLAF's Director-General in some
investigative tasks, inter alia interviews of witnesses, unacceptable; points
out that the Director-General could be faced with a conflict of interest,
since, under Article 90(a) of the Staff Regulations of Officials of the
European Union and Article 23(1) of the ISIP he is the authority who receives
complaints against OLAF's investigations and decides whether or not appropriate
action is taken with regard to any failure to respect procedural guarantees.
Commission's
response:
The OLAF
Director-General is involved in all investigations. According to Articles 5 and
7 of Regulation 883/2013, he shall open investigations and direct the conduct
of them. This was also the case under Regulation 1073/1999. It is for the
Director-General to decide on the degree of his involvement that the specific
case requires.
Article
90a of the Staff Regulations provides OLAF with the opportunity to review its
own actions and, where appropriate, correct any errors on the basis of the
objections of the complainant. Any Article 90a complaints are treated in the
same way regardless of the degree of involvement of the OLAF Director-General.
The decisions taken by OLAF on these complaints are subject to judicial review.
See also the reply to PQ 11642/12 which was transmitted to the Parliament on 8
March 2013.
146.       (§293 - 2012/PAR/0444) The
Parliament calls on OLAF at least to monitor the follow-up measures to these
cases [suspected fraud cases which the Commission has reported to OLAF but
which OLAF dismissed and referred back to the Commission].
Commission's
response:
When there
is a suspicion of fraud, OLAF does not dismiss and refer back cases to the
Commission services for them to investigate. OLAF is and remains the only body
entitled to run administrative investigations in such cases. When OLAF receives
information about suspected fraud from another Commission service, it decides
on whether to open an investigation or to dismiss a case on the basis of the
criteria set out in Article 5 (1) of Regulation 883/2013. OLAF informs the
Commission service that sent the information of the decision to dismiss and of
the reasons for the dismissal. In the rare instances when a case is dismissed
under the principles of subsidiarity and proportionality, and might require
investigation, the case is transmitted by OLAF to the competent national
authorities.
147.       (§293 - 2012/PAR/0445) The
Parliament calls for an analysis of the suspected fraud cases dismissed and
referred back to the Commission in 2012 and 2013.
Commission's
response:
When there
is a suspicion of fraud, OLAF does not dismiss and refer back cases to the
Commission services for them to investigate. OLAF is and remains the only body
entitled to run administrative investigations in such cases. When OLAF receives
information about suspected fraud from another Commission service, it decides
on whether to open an investigation or to dismiss a case on the basis of the
criteria set out in Article 5 (1) of Regulation 883/2013. OLAF informs the
Commission service that sent the information of the decision to dismiss and of
the reasons for the dismissal. In the rare instances when a case is dismissed
under the principles of subsidiarity and proportionality, and might require
investigation, the case is transmitted by OLAF to the competent national
authorities.
148.       (§294 - 2012/PAR/0446) The
Parliament is alarmed by the results of two surveys among OLAF staff and the
shortcomings which have become apparent in the functioning of OLAF since the
reorganisations; calls on the Court of Auditors to perform a follow-up audit
and to follow up its Special Report 2/2011 in order to investigate the impact
of the reorganisation.
Commission's
response:
The
results of the two staff surveys were mixed and not altogether negative.
Following the two surveys, OLAF is working on a HR strategic plan. 
It should
be noted that, as a result of the re-organisation, OLAF has visibly improved
its performance.
149.       (§295 - 2012/PAR/0447) The
Parliament requests that the Commission provide the Committee on Budgetary
Control with a non-redacted version of the document D/000955 from the 5
February 2009 produced by OLAF on the misuse of Union funds by a high-ranking
member of a Union institution.
Commission's
response:
In the
reply provided by the Commission on 28 January 2014 to the question from Ms
Ingeborg Gräßle (MEP) for a written answer, E-012041/2013, it was specified
that: "As for the un-redacted version of Document D/000955, the Commission
will assess any request from the European Parliament under the conditions of
the Framework Agreement between the Parliament and the Commission.". OLAF
has not received any request from the EP under the above-mentioned Agreement.
Furthermore,
the written answer states that "OLAF has informed the Commission that it
holds no evidence which might implicate the former President of the NGO in the
alleged corruption activities".
Finally it
should be noted that the former president of the NGO is the high ranking member
of the Union institution referred to in the text.
150.       (§296 - 2012/PAR/0448) The
Parliament expects to be informed by the Commission about all Clearing House
meetings in 2012 and 2013 in regard to the participants at these meetings and
the agendas.
Commission's
response:
The
‘Clearing House Group’ gathers the Secretary General, the Directors General of
the Legal Service, Budget, Human Resources and the Internal Audit Service every
two months. The Director General of OLAF also participates. It aims to ensure
that the Commission is adequately informed and able to protect the financial
and reputational interests of the Institution, if needed by taking
precautionary measures of its own. Due to the need to protect ongoing
investigations, OLAF's independence and the presumption of innocence of the
persons concerned, information on the proceedings of this group remains
limited. The Commission would assess any additional request from the
European Parliament regarding the Clearing House meetings under the conditions of
the Framework Agreement between the Parliament and the Commission (point 31 of
the Inter-Institutional Agreement and point 3.2.1 second indent and point
3,2,2,b of its annex II).
The
relations between OLAF and the EU Institutions are governed by the OLAF Regulation
(883/2013). Those relations are based on the respect of OLAF's independence
while ensuring that the institutions and bodies concerned receive adequate
information in order to assume their responsibilities and protect the financial
interests of the Union and their reputation. The Commission is fully committed
to support OLAF's independence. The Director General of OLAF has the
possibility to bring an action before the Court of Justice if he considers that
a measure taken by the Commission calls his independence into question (Art.
17.3). This was never the case.
Tobacco
smuggling
151.       (§297 - 2012/PAR/0449) The
Parliament calls for an assessment of the existing agreements with the four
tobacco groups (Philip Morris International Corporation Inc. (PMI), Japan
Tobacco International Corporation, British American Tobacco Corporation and
Imperial Tobacco Corporation), taking into account the new Directive on Tobacco
Products , the ratification of the Protocol to the FCTC Convention and
Parliament's view on the issue of whether and, if appropriate, how the tobacco
cooperation agreement with PMI is to be extended.
Commission's
response:
Each of
the Cooperation Agreements has been concluded by the European Union, represented
by the European Commission, the Member States, and the respective companies.
All Member States are parties to the Anti-fraud Cooperation Agreements, with
the exception of Sweden, which does not participate in the agreements with BAT
and ITL. Each of the Anti-fraud Cooperation Agreements is legally binding and
concluded for a fixed period of time. The Anti-fraud Agreement with PMI expires
in July 2016. The Commission has not yet taken any position regarding a
possible extension of the duration of this Agreement. The Cooperation Agreement
with JTI will expire in 2023, those with BAT and ITL in 2030; it is therefore
too early to take a position on their possible continuation beyond these dates.

The
Commission will formulate its position taking into account the experience with
the implementation of the respective agreements. Moreover, to the extent that
they are contracting parties, Member States also will have to take a position
on this matter. The Commission will keep the Parliament informed of any renegotiation
to extend any of the Anti-fraud Cooperation Agreements.
152.       (§298 - 2012/PAR/0450) The
Parliament calls for decisive measures by OLAF to combat cigarette smuggling:
liaison units with China, the United Arab Emirates and Ukraine and at the
appropriate places where smuggling is concentrated, as well as at Europol, in
order to improve cooperation.
Commission's
response:
The
Commission shares the concerns regarding cigarette smuggling. The issue was
raised in the Commission's Communication "Stepping up the fight against
cigarette smuggling and other forms of illicit trade in tobacco products – A
comprehensive EU strategy" and its related Action Plan.
The
Commission is aware of the importance of liaison officers. It would
nevertheless like to point out that the posting of additional liaison officers
requires available human and budgetary resources. The Commission services
including OLAF are subject to staff cuts. However, the Commission is reflecting
on ways to increase the number of liaison officers despite such constraints.
OLAF and
Europol are currently in the process of preparing an operational working
arrangement to reinforce their cooperation and information exchange based on
work done so far.
153.       (§299 - 2012/PAR/0451) The
Parliament calls on the Commission to describe what measures need to be taken
in the Union to control the market for tobacco leaves, cut raw tobacco and
mechanical equipment for the production of cigarettes, in order to combat
illegal cigarette factories.
Commission's
response:
General
measures regarding the control of raw tobacco are more difficult to envisage in
view of the technical difficulties of controlling the supply chain for raw
tobacco – for instance through a worldwide tracking and tracing system.
Furthermore, raw tobacco is often not subject to excise duties resulting in a
lesser control of its distribution by comparison with cigarettes. The
Commission will nevertheless give consideration to improving intelligence on
and control of raw tobacco trading in the EU.
Absence of
progress in Bulgaria
154.       (§300 - 2012/PAR/0452) The
Parliament calls on the Commission to adopt a resolute attitude towards
Bulgaria and to seriously examine whether it is even possible for Union funds
to be deployed in accordance with the rules in such an environment.
Commission's
response:
The
Commission welcomes the support given to its work under the Cooperation and
Verification Mechanism. The Commission’s recent report makes a number of
concrete recommendations to help accelerate progress. The next formal report is
likely to come around the start of next year, in order to allow the time
required to assess tangible results. Between now and then, the Commission will
monitor progress closely and on a continuous basis with regular missions, as
well as frequent dialogue with the Bulgarian authorities and with other Member
States. There is no direct linkage between the Cooperation and Verification
Mechanism and the use of EU funds, although the Mechanism contributes more
generally to the fight against fraud and corruption.
Roma
155.       (§302 - 2012/PAR/0453) The
Parliament reminds the Commission that it has a duty to account for the use of
Union tax revenue for the benefit of Roma people.
Commission's
response:
Concerning
EU financial support, the Commission would like to stress that the regulatory
framework for EU cohesion policy funds for the 2007-2013 period does not
include any specific provision for reporting related to Roma people. No
category of European Social Fund (ESF) or European Regional Development Fund
(ERDF) support is specifically earmarked for Roma inclusion. Consequently,
based on the Regulations of these funds, Member States are not required to
report specifically on ESF funding for Roma, and some Member States even
prohibit the registration of people on the basis of their ethnic origin which
makes any detailed reporting on this type of support simply impossible.
However,
the ESF, the ERDF and even the EAFRD are indeed available to the Member States
to finance social integration projects, including those aimed at improving the
integration of Roma. Around € 12.9 billion of the ESF is expected to be used
for social inclusion programmes in 2007-2013, including support to the
implementation of national Roma integration strategies. Furthermore, in the
period 2007-2013 over € 100 million pre-accession assistance has been provided
to support Roma integration in the enlargement countries.
There are
numerous good practice examples of projects supporting Roma inclusion
co-financed by the ESF summarized in a brochure published in 2010. This can be
found at: http://ec.europa.eu/employment_social/esf/docs/esf_roma_en.pdf.
To
consolidate the country knowledge on interventions for Roma inclusion and help
Member States design better projects, in April 2014, the Commission launched a
Roma webpage on funding possibilities from EU funds for the social inclusion of
marginalised communities, including Roma.
http://ec.europa.eu/justice/discrimination/roma/eu-funding/index_en.htm
For the
2014-2020 period, Roma communities will be able to further benefit from the
earmarking of at least 20% of the ESF ((currently estimated at over € 14
billion) for social inclusion. In this period, Roma integration is better
targeted for support through the creation of a specific ESF investment priority
devoted to the integration of marginalised communities such as the Roma.
Ex-ante conditionality requirements are intended to ensure that EU funds are
used effectively (with an integrated approach setting achievable goals across
the concerned policy areas and effective coordination). The Roma are also
reflected in the common ESF indicators in Annex I of the ESF regulation
2014-2020 on which MS will have to report.
In
addition, the ESF Learning Network on Roma Inclusion, supported with ESF
Technical Assistance, is going to support Member States in the process of
preparing their Partnership Agreements and Operational Programmes in order to
have an inclusive approach and to better address Roma needs.
With
regard to ERDF, the Commission indeed possesses, and has provided, quantitative
information about measures financed from the EU budget in favour of Roma in
their home countries, in those cases where inclusive growth expenditure is
targeted in nature. Such targeted expenditure is permitted while respecting the
Common Basic Principle on Roma which allows for explicit but not exclusive
targeting (i.e. other marginalised groups may also benefit).
This
support takes two forms. Firstly in those cases where Member States have
launched territorially-based comprehensive programmes, bringing together
support from separate ERDF and ESF programmes. This is the case for both
Hungary (€ 360 million, of which €115 million from ERDF for these and other
Roma specific measures) and Slovakia (€ 300 million, later reduced to € 178
million, of which €134 from ERDF) in the 2007-2013 period.
The second
form of targeted support concerns the financing of integrated housing projects
for the benefit of marginalised communities, including Roma. A total of € 86
million has been allocated by 8 Member States to such schemes to date,
including those 5 Member States with the largest Roma populations.
The
Commission possesses quantitative data on the implementation of the
above-mentioned programmed targeted support.
The
targeted integrated housing support represents a way forward which the
Commission has used in parallel to the launch of the Roma strategy, in order to
substantiate measures in favour of this group, since these investments are
based on a modification of the ERDF regulation of 2010 rendering such
expenditure eligible. Furthermore, given the importance of this expenditure,
the Commission has put in place ad-hoc monitoring arrangements which are
additional to the Commission's standard regulatory responsibilities.
Additionally,
Roma may benefit, beyond targeted support, from mainstream ERDF inclusive
growth expenditure ( € 17,8 billion for 2007-2013 of which 98% had been
allocated by Member States to projects at the end of 2012).This cannot be
quantified further given that, as a general rule, this support takes the form
of infrastructure investments which correspond to a place-based logic in line
with the core mission of ERDF aiming at territorial development, without any
specific target groups, Roma or otherwise.
IT policies
156.       (§303 - 2012/PAR/0454) The
Parliament calls on the Commission to explore open source, well-audited
solutions for e-mail and calendaring, including end-user softwares.
Commission's
response:
The
Commission will indeed continue to do this by applying its Open Source Software
Strategy, which is available at:
http://ec.europa.eu/dgs/informatics/oss_tech/index_en.htm
This
strategy, first adopted in 2001 and reviewed regularly ever since, has enabled
the Commission to be one of the world's leading organisations as regards the
adoption of Open Source Software (OSS). Thanks to this strategy, OSS products
have been considered alongside proprietary ones in terms of value for money and
fitness for purpose. As a result, OSS solutions have been operational at the
Commission for more than 10 years already; for example, at the end of 2010,
there were more than 800 OSS-based web servers. Moreover the commitment to
update and revise the OSS strategy has been taken within the Management Plan
2014 of the Directorate-General Informatics.
In
addition, as regards end-user software, and in particular in the area of office
automation, the Commission has undertaken to explore alternative products
(including OSS) and delivery models in the context of its recently announced
3-track strategy.
157.       (§304 - 2012/PAR/0455) The
Parliament calls on the Commission to support these organisations
[civil-society organisations whose operations at least partially concern the
Roma and which are denied access to Union funding because of an excess of red
tape] more in the overall process.
Commission's
response:
The
2014-2020 regulations envisage the allocation by MS of support to increase the
capacity of beneficiaries. The Commission has consistently encouraged active
cooperation of government authorities with civil society organisations,
including where relevant with NGOs active in the field of Roma integration.
158.       (§306 - 2012/PAR/0456) The
Parliament urges the Commission to prepare smaller open, public tenders to
enable more actors to participate in such procurement [such as the SACHA II
contract] and with a larger diversity of offers.
Commission's
response:
The
Commission has already taken steps to introduce more software diversity.
Together with more than 50 EU Institutions and Agencies, including the European
Parliament, it has recently published a call for tenders named SIDE (Software
for Innovation, Diversity and Evolution), which will in due course replace
SACHA II. The list of software vendors listed in it is even larger than it was
the case in the past. This demonstrates that the Commission does not rely on a
small circle of actors but instead aims at building a diversified software
portfolio in which products from different vendors and based on different
business models (including OSS) coexist smoothly.
At the
same time, however, there is a limit to the number of procurement procedures
that the Commission can initiate and contracts that it can manage with its
limited resources. This is why, instead of running hundreds of
resource-intensive procurement procedures, the Commission fulfils its needs by
addressing the market segment of software resellers, who are able to provide it
with this large range of products from many software vendors through a single
point of contact, while meeting very demanding service requirements.
While the
Commission does its best to allow and encourage as many bidders as possible to
participate in its calls for tenders, the fact remains that the number of
economic operators in that particular market segment is not very high.
159.       (§307 - 2012/PAR/0457) The
Parliament urges the Commission to ensure that any consolidation endeavours in
the ICT architecture goes towards well-accepted, open standards that are used
by multiple vendors and which can be implemented by open source software;
recalls that it is easier to ensure that email storage on the premises is not
accessed by foreign interests because of its geographical location.
Commission's
response:
The
Commission's ICT infrastructure already supports all major standards. As
regards in particular document formats, the Commission is already in a position
to process all recognised ISO standard document formats (as well as many other
widely used formats) in its interactions with external stakeholders, including
other EU Institutions, national administrations, businesses and citizens.
In each
area, it uses itself internally one of the recognised ISO standard document formats.
However, in the context of its recently announced 3-track strategy in the area
of office automation, the Commission has undertaken to explore alternative
products (including OSS), which may in some cases implement natively other
standards.
As regards
on-premise e-mail storage, that is the solution currently in use at the
Commission. However, in the context of the above-mentioned 3-track strategy in
the area of office automation, as well as of its initiatives in the area of
cloud computing, the Commission will look into whether alternative delivery
models can generate savings and increased efficiency. Naturally, when assessing
such models, concerns about security and legal consequences of data location
will be addressed.
Studies and
advice/consultation from external providers
160.       (§308 - 2012/PAR/0458) The
Parliament notes that the Commission was not able to provide Parliament with a
clear, concise list in a machine readable format from the Commissions ABAC
system such as an Excel table or a CSV-file that includes the topics of all
studies as well as the specific issue of any external advice/consultation
carried out for the Commission by external providers with the names of these
providers as well as the country where the respective provider has its seat
while also indicating the date the authorising officers committed the budget
appropriations for the studies or the external advice broken down by years
starting in 2009 ending 2013; expects that list to be submitted to the
Committee on Budgetary Control until 1 May 2014.
Commission's
response:
The reply
with the requested information attached has been sent to CONT on 14 April by
email(Ares(2014)1171594).
Getting results
from the EU budget
161.       (§312 - 2012/PAR/0459) The
Parliament calls on the directors-general to define objectives corresponding
strictly to the competences of the Union and according fully with the principle
of subsidiarity.
Commission's
response:
The policy
objectives set are always within the limits of the powers assigned to the Union
in the Treaties.
162.       (§317 - 2012/PAR/0460) The
Parliament stresses once again that such a performance framework [performance
framework established by the Multiannual Financial Framework 2014-2020] should
encompass the following three main elements: achievement of the programme
objectives (results), sound programme management by the Commission and the
Member States and how programme results and sound management contribute to the
Union’s main objectives.
Commission's
response:
It is not
clear to the Commission how the envisaged framework, encompassing three
elements referred to by the EP, might supplement or otherwise change the
monitoring, evaluation and reporting arrangements as provided in the legal
bases for the programmes, which follow-through into the Commission's internal
management instruments on which the evaluation report will rely, as Parliament
has requested. The Art 318 evaluation report of 26 June 2014 on the financial
year 2013 still reports on the performance of the previous MFF 2007-2013
programmes. Nevertheless, the Report already goes as far as possible in
structuring performance findings along the three elements envisaged by the EP.
Within the main budget headings the Report gives a comprehensive account,
across relevant programmes, of three elements: 1) the main financial programmes
and their link to Europe 2020; 2) an assessment of available performance
results; 3) an account of operational aspects of performance. Looking at the
future, the Art 318 evaluation report of 26 June 2014 sets out the performance
frameworks for the MFF 2014-2020 programmes. These are based on the legal acts
supporting the MFF 2014-2020 programmes as adopted by the co-legislators.
163.       (§318 - 2012/PAR/0461) The
Parliament calls on the Commission to make the Central Exclusion Database
public.
Commission's
response:
The
Commission is aware of the need of ensuring public access to the list of
debarred firms and is currently preparing a legislative proposal for reviewing
the systems in place in order to improve their functioning, including on this
aspect.
SR 8/2012
Targeting of aid for the modernisation of agricultural holdings
164.       (Part I, §3 -
2012/PAR/0462) The Parliament calls on the Commission to improve the
Common Monitoring and Evaluation Framework (CMEF) so as to obtain an efficient
tool for the Member States and the Commission which generates relevant data to
be used for monitoring the results obtained with the funds spent on measure
121; insists on the need to develop reliable indicators to allow comparisons
between Member States (and/or regions) and to monitor the achievement of the
Union’s priorities.
Commission's
response:
The
monitoring and evaluation system has been subject to review by the Commission
and Member States in order to improve its efficiency and effectiveness,
especially in terms of reliability and comparability and foster ownership by
sharing good practices and building capacity. According to the new legal
framework for the rural development policy 2014-2020, quantified result
indicators will be used to assess progress towards targets established ex ante
at programme level. 
Furthermore,
Managing Authorities will have to ensure that there is an appropriate secure
electronic system to record, maintain, manage and report statistical
information on programme implementation, particularly as progress towards the
defined objectives and priorities.
165.       (Part I, §5 -
2012/PAR/0463) The Parliament considers necessary to avoid dispersion
in the areas of regulation, application and budget and to give this measure
uniformity in its implementation by Member States.
Commission's
response:
Article 45
of Regulation (EU) No 1305/2013 (EAFRD) lays down general rules for
investments. In addition, the Commission has prepared a measure fiche for
investments in physical assets, part of which the improvement of the overall
performance and sustainability of the agricultural holding is.
However,
support to farm restructuring should be targeted by individual Member States
according to their specific situation in terms of structural and territorial
needs as identified by the SWOT. Article 8 of Regulation (EU) No 1305/2013
requires also that the allocation of financial resources to the measures of the
programme is justified and adequate to achieve the targets set.
For
reasons of concentration of limited available resources and in order to avoid
deadweight, in the case of investments to support farm restructuring, Member
States have to explain in the programme how the support is targeted based on
the SWOT analysis and needs assessment carried out in relation to the Union
priority for rural development “enhancing farm viability and competitiveness of
all types of agriculture in all regions and promoting innovative farm
technologies and sustainable management of forests”.
166.       (Part I, §6 -
2012/PAR/0464) The Parliament notes that in this regard, it is
necessary to provide them [farms] with a sufficient budget given the
significant present deficit and taking into account the context of strong
competitiveness in Union agriculture and the progressive liberalisation of
world markets and trade.
Commission's
response:
The
Commission has taken the requested action. Article 8 of Regulation (EU) No
1305/2013 requires that appropriate targets are set for each of the focus area
of the Union priorities for rural development. The same article requires also
that the allocation of financial resources to the measures of the programme is
justified and adequate to achieve the targets set.
167.       (Part I, §9 -
2012/PAR/0465) The Parliament is of the opinion that it is necessary to
maintain specific support for the modernisation of associative operating
systems for agricultural purposes as it has proved objectively to solve
problems of insufficient economic dimension and/or generational change.
Commission's
response:
The
Commission has taken the requested action. Under Article 17 of Regulation (EU)
No 1305/2013 (EAFRD), investment support can be given also to group of farmers.
Furthermore, the aid intensity for collective investments and investments made
by young farmers can be increased by 20 percentage points, up to 90%.
SR 11/2012
Suckler cow and ewe and goat direct aids under partial implementation of SPS
arrangements
168.       (Part II, §11 -
2012/PAR/0466) The Parliament asks the Commission to add a targeting
requirement for coupled direct aid schemes; notes that the Commission's
implementing rules should require Member States to identify and justify agricultural
areas in which coupled animal premiums could have a demonstrably beneficial
effect and where there is a lack of real viable alternatives.
Commission's
response:
Targeting
requirements are now included in the legislation. Within the framework of the reform
of the CAP towards 2020, the Commission has proposed that Member States may
grant coupled support to sectors or regions under certain specific conditions.
The Commission has adopted a delegated act fixing the conditions for the
support including specifications on the requirements and on the targeting..
169.       (Part II, §12 -
2012/PAR/0467) The Parliament calls on the Commission, in coordination
with Member States, to clarify the most relevant types of specific farming
activities to maintain agricultural production and sustain economic activity in
regions with few economic alternatives and generate environmental benefits and
to focus the support on farms and specific farming activities in disadvantaged
regions facing environmental, social and economic risks.
Commission's
response:
The
legislator has considered that these concepts could be better defined at
national level. The identification of the types of farming to be targeted is
left to the Member States to take into account the real situation of the
concerned sector or region on their territory. 
Nevertheless
within the framework of the reform of the CAP towards 2020, the Commission will
be empowered to adopt delegated acts concerning the conditions for granting voluntary
coupled support as well as the rules on consistency with other Union measures
and on the accumulation of support. The Commission has adopted delegated act
fixing the conditions for the support including specifications on the
requirements and on the targeting.
170.       (Part II, §13 -
2012/PAR/0468) The Parliament asks the Commission to specify the
monitoring requirements and arrangements expected from Member States for the
aid schemes concerning the animal sectors and include this in a legal
instrument requiring Member States to use appropriate performance indicators
and up-to-date data precisely lined to the envisaged outcomes from the animal
aid schemes; s of the opinion that the Commission should implement a permanent
monitoring framework that would indicate all the direct aids paid to support
the animal sectors in Member States, including national aids and Pillar II
support.
Commission's
response:
Establishment
of a common monitoring and evaluation framework with a view to measuring the
performance of the CAP. Adoption of Regulations (EU) No 1306/2013, 1307/2013
and related delegated acts.
171.       (Part II, §14 -
2012/PAR/0469) The Parliament requires the Commission, in coordination
with the Member States, to undertake a comprehensive evaluation of the impact
of the different support schemes and where appropriate, assess the impacts of
alternative measures to improve production quality and competitiveness e.g. by
encouraging herd improvements.
Commission's
response:
The
Commission regularly undertakes evaluations of all support schemes applied
under the CAP. This was also the case for the direct payments applied to the
beef and veal sector and sheep and goat sectors. The elements studied by the
retrospective evaluations depend on the policy objectives set by the
legislator. 
Also, the
Commission proposal for the CAP towards 2020 foresees a framework for
monitoring and evaluation, in cooperation with MS.
SR 13/2012
European Union development assistance for drinking water supply and basic
sanitation in sub-Saharan countries
172.       (Part III, §22 -
2012/PAR/0470) The Parliament invites the Commission to integrate
wastewater management in all future projects that promote effective and
responsible water use, treatment and disposal, and encourage the protection and
preservation of sub-Saharan Africa watersheds.
Commission's
response:
The
Commission accepts this request which requests a continuous effort to integrate
wastewater management and watershed protection in all relative projects
identified and formulated for sub-Saharan African countries.
SR 14/2012
Implementation of EU hygiene legislation in slaughterhouses of countries that
joined the EU since 2004
173.       (Part IV, §28 -
2012/PAR/0471) The Parliament strongly encourages the Commission to
improve its supervision of official controls in the food and feed sector and
believes that Regulation (EC) No 882/2004 on official feed and food controls is
a step in the right direction.
Commission's
response:
The
Commission has an effective system for detecting weaknesses in Member States’
food and feed controls and for ensuring that the actions promised by the Member
States are delivered. In this context, the Commission reviews and updates its
planning process on a regular basis to ensure that priorities for official
control activities are set based on the latest information and taking into
account factors such as risk, trade, policy and legislation.
174.       (Part IV, §29a -
2012/PAR/0472) The Parliament urges the Commission, furthermore, to
complete the follow-up of its earlier recommendations to Member States as a
result of the review of the implementation of the 2004 hygiene package without
further delay.
Commission's
response:
The
Commission through FVO audits regularly reviews the implementation of food
safety legislation by the Member States and this is a constant and ongoing task.
Where weaknesses are identified, the FVO issues recommendations and the actions
taken by the Member States to address these recommendations are systematically
followed up to ensure real improvements in food safety.
175.       (Part IV, §29b -
2012/PAR/0473) The Parliament calls on the Commission to improve its
guidance and supervision of Member States’ preparation and implementation of
the Multiannual National Control Plans and to take action improving its
training actions.
Commission's
response:
The
Commission will continue to work with the Member States using the mechanisms
and processes already established (Guidelines, MANCP network, Annual Reports)
to ensure that MANCPs are useful tools in ensuring the effectiveness of
official controls. 
Striving
for continuous improvement of its training actions in the framework of the
initiative "Better Training for Safer Food" (BTSF), the Commission
started to address the results of the most recent external evaluation,
finalised in early 2013, by adequate actions.
SR 15/2012
Management of conflict of interest in selected EU agencies
176.       (Part V, §41 -
2012/PAR/0474) The Parliament draws the Commission’s attention to the
need for a common regulatory framework on this matter; stresses the importance
of it being a concerted action and calls for Parliament to be closely involved;
asks the Commission to respect the proposed deadline for implementing this
action and to report to the discharge authority on its outcome by May 2014,
attaching the relevant legislative proposals to its report.
Commission's
response:
According
to the Joint Statement and Common Approach, endorsed by the EP, Council and the
Commission in July 2012, the Commission is responsible for the follow-up to the
Common Approach. Furthermore, the Common Approach specifically entrusts the
Commission with the task of examining, together with the agencies, whether
there is scope for a harmonised approach for the prevention and management of
conflict of interests in EU decentralised agencies. As announced in its Roadmap
of December 2012 and in line with the Common Approach, the Commission has
developed guidelines on the prevention and management of conflicts of interest
in EU decentralised agencies, in close cooperation with the agencies
themselves. This approach was chosen, because guidelines can best address the
different levels of risk between agencies. Indeed, the agencies have very
different roles: some feed the Commission decision process (e.g. EFSA, EMA),
others have regulatory powers themselves (e.g. EASA), while some act as
observatories in their respective field (e.g. EMCDDA). Due to this difference
in their roles, agencies' exposure to the issue of conflict of interest varies
significantly from one to the other, depending notably on the tasks entrusted
to them. This exposure also varies from staff, to Management Board members, to
experts in Scientific Committees or Boards of Appeal members, depending on
their respective power to influence the decision-making process at agency or
Commission level. The Guidelines aim at supporting agencies, by providing a set
of principles and tools that they should consider in order to develop their own
conflict-of-interest policy, with due consideration to the specific context in
which each one of them operates, as well as their degree of exposure to the
risk of conflict of interest. The review of the transparency register, as
welcomed by the EP, which lists all groups and organisations wishing to influence
the EU decision-making process, needs to be seen within this context. However,
the Commission also emphasises the fact that as the agencies are legally
independent entities, they alone are responsible for the way they handle the
issue of conflicts of interest in practice and notably, how they enforce and
control that the key principles in this domain are respected. As such,
ultimately, agencies are responsible for developing their own framework on
conflicts of interest (including on declarations of interest, identification of
risk levels, preventive and corrective actions), for its implementing,
monitoring and reporting.
177.       (Part V, §42 -
2012/PAR/0475) The Parliament asks the Commission to bear in mind the
need to maintain a balance between the risks and the benefits, in particular as
regards the management of conflicts of interest on the one hand, and the
objective of obtaining the best possible scientific advice on the other; notes
with concern, furthermore, that the adoption of ethical standards, codes and
guidelines does not guarantee the absence of conflicts of interest; observes
that this will require the implementation of simple and applicable standards,
together with regular and effective ex ante and ex post controls and clear
sanctions, thereof, in the context of a culture of honesty, integrity and
transparency.
Commission's
response:
Please
refer to the reply to 2012/PAR/0474
178.       (Part V, §43 -
2012/PAR/0476) The Parliament notes that the Commission needs to
address these issues [shortcomings relating to post-employment issues
(‘revolving doors’, ‘insider information’)] without delay by means of action to
be taken by both the agencies and by all Union institutions.
Commission's
response:
Please
refer to the reply to 2012/PAR/0474
179.       (Part V, §49 -
2012/PAR/0477) The Parliament urges the Commission and the agencies to
implement the measures stemming from that review [of the Transparency Register
for lobby groups at the Union institutions] concerning potential conflicts of
interest.
Commission's
response:
Please
refer to the reply to 2012/PAR/0474
180.       (Part V, §52 -
2012/PAR/0478) The Parliament endorses the Court of Auditors’
recommendation calling on all Union institutions and decentralised bodies to
examine whether the recommendations of its Special Report No 15/2012 are
relevant and applicable to them.
Commission's
response:
This request
is not specifically addressed to the Commission. It supports an ECA
recommendation addressed to all EU institutions and decentralised bodies.
SR 16/2012 The
effectiveness of the Single Area Payment Scheme as a transitional system for
supporting farmers in the new Member States
181.       (Part VI, §54 -
2012/PAR/0479) The Parliament is of the opinion that the Commission
should ensure that the rules are implemented consistently among Member States
in order to ensure, for example, that the same types of beneficiary are
excluded in all Member States.
Commission's
response:
Adoption
of R1307/2013 and related delegated act provisions in respect of active farmer.
Furthermore,
the Commission has provided a guidance document on the implementation of the
active farmer clause.
182.       (Part VI, §55 -
2012/PAR/0480) The Parliament stresses that the eligibility of land for
aid should be clearly defined and limited to parcels on which Good Agricultural
and Environmental Conditions (GAEC) standards require agricultural activities
to be carried out; notes, with a view to the new CAP, that the eligibility of
land should be clearly defined so as to exclude land that does not contribute
to increasing agricultural productivity or to actively maintaining the
environmental value of the land; believes, furthermore, that aid should only be
paid for land on which well-defined and regular activities are carried out.
Commission's
response:
Criteria
such as "concrete and regular agricultural activity" could link the
level of support to the performance of the beneficiary of an actual production
obligation which would not be compatible neither with the CAP targets for
achieving greater market orientation through decoupled direct payments, nor
with the WTO "green box" conditions. In addition, diversification of
activities is a valuable alternative to limited growth opportunities within the
farm sector. 
Under the
current legislation (Article 2 of Regulation (EC) No 73/2009) any natural or
legal person exercising an agricultural activity might receive direct payments.
However, Member States have a possibility to restrict access to direct payment
by applying Article 28(2) of that Regulation. Besides, it has to be noted that
it is an obligation for Member States to establish minimum requirements for
GAEC. 
In the CAP
reform the issue was addressed through the definition of active farmer and of
agricultural activity (Article 9 and 4 of Regulation (EU) No 1307/2013). The
definition of an agricultural activity entails, instead of maintenance of land
in GAEC under current rules, that the land should be maintained in a state
suitable for grazing and cultivation without any particular preparatory action.
Member States shall establish criteria to be met by farmers for respecting this
maintenance requirement. Furthermore, in case of agricultural land naturally
kept in a state suitable for grazing and cultivation, farmers have to carry out
a minimum activity to be established by the Member State.
183.       (Part VI, §57 -
2012/PAR/0481) The Parliament calls on the Commission to analyse the
extent to which the effectiveness and efficiency of direct payments are
adversely affected by structural weaknesses and land prices; believes that on
the basis of this analysis, the Commission should take complementary measures
to restructure the sector and render it more competitive.
Commission's
response:
The issue
of land prices has been analysed in a study on the functioning of land markets,
in the CAP Health Check – Impact Assessment, and a further study on market
factors is currently under way in the RTD 7th Framework Programme. Besides, an
evaluation by the Commission has been made on the impact of direct support on
farm structures. 
As regards
the tools offered, SAPS support helps farmers to mitigate adverse effects of
the structural weaknesses by providing an effective income insurance and
minimum stability of revenue. In addition, other CAP instruments such as rural
development support and farm advisory system are available to farmers to help
tackling most of the issues mentioned by the Court. Those measures are designed
and chosen by the Member States among a wide range of possibilities to fit
their needs in terms of farm modernisation, training of employees, etc. 
SAPS
support helps farmers to mitigate adverse effects of such structural factors.
184.       (Part VI, §58 -
2012/PAR/0482) The Parliament invites Member States to consult with the
Commission as they prepare for the introduction of a future entitlement-based
scheme; believes in particular that Member States could use the Commission’s
assistance to help identify key requirements for national administrations and
farmers.
Commission's
response:
The
Commission services are available for consultations and assistance if there is
a need and upon request from the Member State interested. Several consultations
were already held with MS to discuss the rules under the new CAP proposals and
such assistance is foreseen to continue. This has been done through the
discussion of the delegated and implementing rules within the framework of the
expert group (delegated rules) and the management committee (implementing
rules). Bilateral meetings are being held with Member States officials to
clarify doubts regarding the implementing choices allowed by the basic
Regulation.
SR 17/2012 The
European Development Fund (EDF) contribution to a sustainable road network in
sub-Saharan Africa
185.       (Part VII, §64a -
2012/PAR/0483) The Parliament calls on the Commission to attach
mandatory conditions to its financial support and to react appropriately when
partner countries fail to comply with their commitments.
Commission's
response:
In
accordance with the principle of aid effectiveness and in coordination with
other donors, the Commission is gradually shifting from a system based on
direct conditions to a more articulated system of output-based performance assessment
frameworks.
In the
11th EDF programming exercise, the EC has already reacted and withdrawn from
supporting the road sector in countries that showed unsatisfactory commitment.
In the countries where transport infrastructure remains a focal sector, the
Commission will respond firmly in case of unsatisfactory commitment of national
government. 
A guidance
note is in preparation to implement this recommended action.
186.       (Part VII, §64b -
2012/PAR/0484) The Parliament encourages the Commission to use policy
dialogue to its full potential.
Commission's
response:
The
Commission agrees on the need to reinforce the dialogue and to monitor
continuously the government performances in the sector. 
This
action will imply the need to address the issues at stake during the
identification and formulation phases of 11th EDF projects at two levels: 
-
National: in those countries where transport infrastructure remains a focal
sector; 
-
Regional: in all Sub-Saharan Africa regions through the financing of regional
transport corridors and trade facilitation. 
A guidance
note is in preparation to implement this recommended action.
187.       (Part VII, §67a -
2012/PAR/0485) The Parliament invites the Commission to present a
report, within six months, on how defining the Commission policy on road
infrastructure takes into account the protection of the environment and the
promotion of road safety.
Commission's
response:
In order
to provide guidance to the EC Delegations to apply and reinforce the EC
development policy on environmental protection and road safety promotion, an
Operational Handbook "Transport Infrastructure" has been prepared by
DG DEVCO. For the knowledge of the European Parliament, DEVCO has elaborated an
extract of the updated version of this Handbook (2014), including all the
relevant information on environmental and road safety issues.
188.       (Part VII, §67b -
2012/PAR/0486) The Parliament would also like to be informed about how
Union funded projects are coordinated with other donors and organisations, not
only in the field of road constructions, but also in matters concerning
planning and maintenance.
Commission's
response:
About
coordination with other donors and organisations, DEVCO prepared a
complementary note to the Commission response to question no. 68, in order to
provide more information on this issue.
189.       (Part VII, §68 -
2012/PAR/0487) The Parliament recommends that the Commission responds
firmly, proportionately and in a timely manner when governments show
unsatisfactory commitment to addressing the issues raised and recommendations
made including to assess the suspension or cancellation of EDF funding to
individual programmes or the road sector as a whole.
Commission's
response:
The
Commission considers that a good option would be withdrawing from the sector in
case of unsuccessful dialogue with a country partner. However, the Commission
recalls that it cannot suspend funding when a specific works contract is signed
and on-going. In the 11th EDF programming exercise, the EC has already
withdrawn from supporting the road sector in countries that showed
unsatisfactory commitment. In the countries where transport infrastructure
remains a focal sector, the Commission will respond firmly in case of
unsatisfactory commitment of the national government. 
A guidance
note is in preparation to implement this recommended action.
SR 18/2012
European Union Assistance to Kosovo related to the rule of law
190.       (Part VIII, §74 -
2012/PAR/0488) The Parliament urges the Commission and the Member
States to address the issue of staffing and to create appropriate incentives to
encourage and attract highly qualified applicants.
EEAS's response:
On 28
March is PSC approval of CivCom advice on EULEX strategic review and suggest
adding: Within the existing financial constraints, efforts are being for a
transparent and merit-based, with proper communication, recruitment process.
Lessons learned by EULEX, in particular during its downsizing, are being shared
with other missions.
191.       (Part VIII, §75 -
2012/PAR/0489) The Parliament calls on the Commission and Member States
to review the rules governing the duration of EULEX secondments.
EEAS's response:
On 28
March PSC approval of CivCom advice on EULEX strategic review and suggest
adding: regular efforts with all national authorities to promote extended stay
for high achieving seconded staff.
192.       (Part VIII, §77 -
2012/PAR/0490) The Parliament urges the Commission to take the
particular challenges faced by northern Kosovo into account when planning its
assistance.
EEAS's response:
Funded
under IPA 2013 we have allocated EUR 38,5 million (Special IPA programme) in
support of dialogue agreement implementation.
193.       (Part VIII, §78 -
2012/PAR/0491) The Parliament calls for efforts to streamline the
Union's presence in the country to be increased through better coordination and
integration between Union institutions and the Kosovo authorities.
Commission's
response:
The EU's
presence in Kosovo has been streamlined by the nomination of a double-hatted
Head of the EU Office and EU Special Representative in Kosovo as per 1 February
2012.
194.       (Part VIII, §81 -
2012/PAR/0492) The Parliament calls on the Commission, the EEAS and
Member States to ensure that their policy dialogues with Kosovo, particularly
on strengthening the rule of law, are linked to incentives and priority
conditions.
EEAS's response:
By
15/10/2014 we will report the transfer of some rule of law staff from EULEX to
EUSR/EUO and at the next reporting period we will flag it as done.
SR 20/2012 Is
Structural measures funding for municipal waste management infrastructure
projects effective in helping Member States achieve EU waste policy objectives?
195.       (Part IX, §84 -
2012/PAR/0493) The Parliament calls on the Commission to report to the
discharge authority what are the reasons behind this situation [doubt on the
Commission's effectiveness in managing public money], and what means it employs
and/ or has envisaged to introduce in order to prevent such and similar
failures.
Commission's
response:
The
Commission would like to emphasise that the Cohesion policy funds are
implemented under 'shared management'. Member States are thus primarily responsible
for the selection, implementation and monitoring of the co-funded projects.
They report on the use of funds annually but at the aggregated level of
priority axis, and not at project level. The Commission plays a supervisory
role by satisfying itself that the arrangements governing the programme
management and control system are compliant. It does so by verifying the
effective functioning of this system and making financial corrections, where
necessary. 
Under the
new Cohesion policy framework for the 2014-2020 programming period a number of
novelties were introduced to increase the impact and effectiveness of the EU
funding. For example, ex-ante conditionalities, including on waste management,
have to be fulfilled to ensure that the proper institutional, regulatory and
policy frameworks within which investment are carried out at Member State
level, are in place and are effective before adopting programmes. To further
reinforce the performance of funding, a certain share of the funds (i.e.
performance reserve) is set aside at the start of the 2014-2020 period and will
be released at a later stage based on the investments' quality and the
achievement of certain objectives. 
In
addition, the Commission is continuously developing guidance to support Members
States in the implementation. Recent documents related to waste management are
the guides on Green Public procurement criteria for waste water infrastructure,
on Multi-benefit policy investments in nature and green infrastructure and on
Connecting smart and sustainable growth thorough smart specialisation. The
Commission is also preparing a further guidance on cost benefit analysis for
Major Projects. Assistance is also provided via various mechanisms, including
JASPERS which supports specific major projects.
196.       (Part IX, §85 -
2012/PAR/0494) The Parliament reminds the Commission that it should
focus not only on legality and regularity of Union spending, but also on
performance as its main goal.
Commission's
response:
The
Commission is aware of all aspects to be observed in EU spending. While
legality and regularity of expenditure is the main element of controls and
audits, extensive work during the evaluation of proposals from applicants, as
well as monitoring of approved projects through all their life cycle permit the
Commission firstly to achieve economies by better fine-tuning the approved
projects and make them fitter for the policy they support and secondly to take
necessary steps and correct problems that may be encountered during their
implementation in order to provide for more cost-efficient and performing
approaches.
197.       (Part IX, §86 -
2012/PAR/0495) The Parliament believes that Union financial support
should be linked to the achievement of Union waste policy objectives; (..)
calls on the Commission to assess the data received from Member States for
reliability [about their progress towards the achievement of Union waste policy
objectives].
Commission's
response:
The
definition of ex ante conditionalities for the management of EU funds is a new
tool whose implementation should ensure that the projects to be funded
contribute to the achievement of EU waste policy objectives. In parallel, the
recent legislative proposal for the review of waste targets includes specific
measures to improve the reliability and comparability of waste statistics to
better monitor MS's performance and distance to the targets.
198.       (Part IX, §87 - 2012/PAR/0496)
The Parliament urges the Commission, in relation to the ‘polluter pays
principle’, to request from Member States the application of reduced rates of
assistance when waste management tariffs paid by households do not cover
operating costs and depreciation costs of municipal waste management, and to
apply itself this principle when approving major projects.
Commission's
response:
There is
no legal basis to introduce conditions concerning the waste management charges
to be paid by households in the allocation of EU funds. However, the Commission
is assessing through its compliance promotion initiatives the adequacy of the
existing waste charges and taxes and will encourage the use of economic
instruments such as landfill taxes, EPR and 'Pay as You Throw' schemes. This
aspect should also be addressed through the implementation of the new early
warning mechanism proposed in the waste review.
199.       (Part IX, §88 -
2012/PAR/0497) The Parliament stresses the importance of separate
collection implementation, including biodegradable waste, in order to maximise
the performance of waste management infrastructures and to progress towards the
achievement of Union waste policy objectives.
Commission's
response:
There is
already an obligation for the Member States to set up by 2015 separate
collection at source; Member States might claim that through Mechanical
Biological Treatments (MBTs) there is separate collection. Although
door-to-door separate collection is the best option, this is not mandatory;
other systems may be acceptable if they are as effective as door-to-door
collection. For at least paper, metal, plastic and glass separation good
progress has been achieved. In addition, the Commission has proposed in the
waste review to make separate collection of bio-waste mandatory as from 2025.
Projects aimed at implementing separate collection schemes are fully eligible
for EU funding.
SR 21/2012
Cost-effectiveness of Cohesion Policy Investments in Energy
200.       (Part X, §104 -
2012/PAR/0498) The Parliament calls on the Commission to put forward
proposals for obligatory energy audits in the public sector as a precondition
for project co-financing from the Union budget.
Commission's
response:
The new
Energy Efficiency Directive requires the Member States to promote the
availability of high quality energy audits to all final customers. The
technical guidance for designing, implementing, financing and assessing
investments in the area of sustainable energy in buildings (“Financing the
energy renovation of buildings with Cohesion Policy funding”) stresses that any
support provided should be conditional to an energy audit/energy performance
certificate and verification of achieved results. However, an energy audit is
not an obligatory precondition for Cohesion Policy co-financing in legal terms.
What is legally applicable is rather an ex ante conditionality that requires
Member States intending to support energy efficiency and renewable energy use in
buildings to demonstrate that they have carried out a series of actions to
ensure that minimum requirements are in place related to energy performance of
buildings, including the existence of a system of certification.
SR 22/2012 Do
the European Integration Fund and European Refugee Fund contribute effectively
to the integration of third-country nationals?
201.       (Part XI, §115 -
2012/PAR/0499) The Parliament asks the Commission for a follow-up on
the national evaluation reports due on 31 October 2012.
Commission's
response:
In order
to measure the effectiveness of both Funds (EIF and ERF) with regard their
effective contribution to the integration of third-country nationals (TCN), DG
HOME analysed Member States contribution to integration using the national
evaluation reports submitted by the Member States late 2012. This was done on
the basis of common indicators set by the Commission in such a way as they are
compatible with the Member States' own indicators at project level and they
produce meaningful results at national and European level. The Commission
report will be available in the course of 2014 and will be submitted to the EU
institutions and widely published.
202.       (Part XI, §122 -
2012/PAR/0500) The Parliament urges the Commission to discuss with
Member States and adopt guidelines for implementation of the new Fund as soon
as possible, duly taking into account the timetable for adoption of the new
Fund.
Commission's
response:
DG HOME
started last year to prepare the future implementation of the Asylum, Migration
and Integration Fund (AMIF). An important facet of this preparation were the
"Policy Dialogues" with Member States (MS), preceding the preparation
of the national multi-annual programmes. At these dialogues, which took place
between June and November of 2013, useful guidance was provided on the expected
use of the Fund, including the emphasis on the need for synergy and
complementarity with the European Structural and Investment Funds (ESIF) and
other EU funding instruments. Furthermore, the AMIF regulation includes a
number of simplifications which respond to the objectives of more flexibility
and complementarity. More flexibility as regards the target groups, especially
for integration measures, addressing all TCN (including beneficiaries of
international protection). Detailed Guidelines on programming have been
provided to MS to help prepare their national multi-annual programmes.
Moreover, there is the possibility to include TCNs relatives, under specific
conditions.
203.       (Part XI, §128 -
2012/PAR/0501) The Parliament calls on the Commission, in that respect,
to give proper consideration and pursue the possibility of reinforced synergy
between the two Funds [AMF and ESF] in the Partnership Agreements with Member
States.
Commission's
response:
DG HOME
closely cooperates with other services (DGs) managing EU funds, in particular
ESIF, to ensure complementarity and synergy. Consultations took place already
in view of preparing for the policy dialogues, will continue during the
negotiation of national programmes and will be concluded in the approval stage.
DG HOME also makes observations on the draft Partnership Agreements of MS under
the ESIF and regularly stresses the need to reinforce synergy with the AMIF and
ISF. DG HOME will ensure that MS adopt appropriate arrangements to maximise
synergies and complementarity also at their level by introducing the relevant
statements in the national programmes
204.       (Part XI, §129 -
2012/PAR/0502) The Parliament calls on the Commission to encourage
Member States to provide more detailed information on the coherence and
complementarity between Union funds.
Commission's
response:
As part of
the national programmes, Member States (MS) have to provide information on the
mechanism to be put in place to ensure coherence and complementarity between
Union funds. Moreover, MS have the specific obligation to put in place at
national level a coordination mechanism with the European Social Fund and as
part of annual reporting, MS will also have to report on how they ensure
coherence and complementarity with other EU financial instruments.
SR 23/2012 Have
EU Structural Measures successfully supported the regeneration of industrial
and military brownfield sites?
205.       (Part XII, §136 -
2012/PAR/0503) The Parliament calls on the Commission and the Member
States to apply a reimbursement clause in each grant agreement, [believes] that
[the reimbursement clause] should take into account a long term/life cycle
approach.
Commission's
response:
The
Commission considers that the inclusion of a reimbursement clause in the grant
letter issued by the managing authority is a case of good practice which can
usefully be included by Member States in their national rules. However, under
the principle of shared management, since the Managing Authorities issue the
grant decisions, they should also monitor the application of the reimbursement
clause as they monitor the implementation of projects.
The
Commission takes the view that going back to the projects 15 years after
completion to see if revenues have been generated would increase significantly
the administrative burden for the Member States and project promoters. The
2007-2013 regulation stipulates 5 years in case revenues cannot be expected or
calculated at the time of approval whereas Article 61 of the 2014-2020
regulatory framework foresees "within three years of the completion of an
operation or by the deadline for the submission of documents for programme
closure".
However,
the request is addressed at Member States, since the Commission does not sign
grant agreements under shared management.
206.       (Part XII, §137 -
2012/PAR/0504) The Parliament urges the Commission to require
implementation of polluter pays principle as condition for granting Union
funding.
Commission's
response:
The
polluter pays principle (PPP) is one of the key principles that applies to the
EU funding programmes. The Commission is assessing through its compliance
promotion initiatives the implementation of the Union’s acquis and the respect
of the PPP.
In
particular for wastes, the Commission is assessing the adequacy of the existing
waste charges and taxes and will encourage the use of economic instruments such
as landfill taxes, EPR and 'Pay as You Throw' schemes. This aspect should also
be addressed through the implementation of the new early warning mechanism
proposed in the waste review.
SR 24/2012 The
European Union Solidarity Fund’s response to the 2009 Abruzzi earthquake: The
relevance and cost of operations
207.       (Part XIII, §144a -
2012/PAR/0505) The Parliament calls on the Commission to clarify why
[although alerted to the inquiries by Aquila's prosecutor, the Commission] it
has always refused to investigate whether or not Union funds have been paid out
to economic operators linked to criminal organisations.
Commission's
response:
It needs
to be stressed that neither ECA, OLAF or the Italian prosecutor have ever
transmitted to the Commission any suspicion of involvement of organised crime
in relation to the EUSF grant. Furthermore, in its audit the Commission did not
find facts confirming any or confirmed connections with the alleged involvement
of organised crime.
Concerning
the problems with the cost of the CASE project, the Commission did follow up on
reports of inflated costs. The explanations given by the Italian authorities
were satisfactory.
Finally,
it is the responsibility of the Member State and its authorities to ensure the
legality and regularity of the spending. The independent validity statement
issued by the Italian authorities on the legality and regularity of the EUSF
spending did not give rise to the need for further investigation.
208.       (Part XIII, §144b -
2012/PAR/0506) The Parliament calls on the Commission to clarify why,
although it was alerted to the fact that there could be problems with the cost
of the CASE project, the Commission did not follow-up on this point.
Commission's
response:
see reply
to Part XIII, §144a - 2012/PAR/0505
209.       (Part XIII, §147 -
2012/PAR/0507) The Parliament ask the Commission to monitor the
development of thereof [the case of eight individuals who have been taken into
custody by the Italian police under suspicion of manipulating building licenses
for the reconstruction works that are taking place in the Abruzzi region and in
the city of L'Aquila] and to report to Parliament on these developments
including the criminal cases.
Commission's
response:
The
Commission will continue to monitor the developments regarding possible
manipulation in the use of EU Funds.
SR 25/2012 Are
tools in place to monitor the effectiveness of European Social Fund spending on
older workers?
210.       (Part XIV, §155a -
2012/PAR/0508) The Parliament calls on the Commission to promote these
recommendations [to the Member States] when negotiating Operational Programmes;
calls on the Commission to provide appropriate data on the means mobilised and
the results achieved by the ESF to ensure the submission of consistent and
reliable information by Member States, inter alia, by issuing common indicators
to be included by Member States in their Operational Programmes.
Commission's
response:
The
Regulations for the programming period 2014-2020 contain relevant provisions so
that Operational programmes are more performance and result-oriented (including
a performance framework, in particular a mid-term performance review of the
implementation of the operational programmes).
The
2014-2020 regulations set out that Member States shall provide the resources
necessary for carrying out monitoring and evaluation, and ensure that
procedures are in place to produce and collect the data necessary for
evaluations, including data related to common and, where appropriate,
programme-specific indicators. The Commission has worked with Member States for
two years on common indicators before tabling its proposals for the future
programming period and continues to do so in view of a common approach with MS
towards the definition and implementation of ESF-related indicators. The
Commission has also prepared guidance documents for Member States on monitoring
and evaluation 2014-2020, as well as guidance on the ex-ante evaluation. It has
held several learning seminars with ESF evaluation capacities, has prepared a
practical guidance for ESF Managing Authorities for carrying out counterfactual
impact evaluations and a technical note on programme-specific indicators.
The
mandatory common output and result indicators established for the 2014-2020 period
cover the most frequently funded target groups and entities. Common result
indicators in particular will allow for capturing the results upon
participants' leaving the ESF action and also in time (several months later).
Programme monitoring by Member States shall always use common indicators and
may use programme specific indicators where appropriate, to allow them to more
adequately capture the results of the actions supported by these operational
programmes. The Commission guidance document on programme-specific indicators
lays out some possible approaches to defining such indicators at
programme-level.
211.       (Part XIV, §155b -
2012/PAR/0509) The Parliament calls on the Commission to analyse in
depth performance issues when assessing the management and control systems.
Commission's
response:
See reply
to 2012/PAR/0508
SR 1/2013 Has
the EU support to the food-processing industry been effective and efficient in
adding value to agricultural products?
212.       (Part XV, §161 -
2012/PAR/0510) The Parliament urges the Commission to approve only
those RDPs that present substantiated and comprehensive strategies with a clear
rationale to demonstrate how the financial support for the food industry will
improve the competitiveness of agriculture.
Commission's
response:
The
Commission is taking the requested action. In the programming period 2014-2020,
the achievement of the objectives of rural development, which contribute to the
Europe 2020 strategy for smart, sustainable and inclusive growth, is pursued
through the Union priorities for rural development. One of the six priorities
is the promotion of food chain organisation including processing and marketing
of agricultural products, animal welfare and risk management in agriculture.
This priority is divided into two focus areas; first one is to improve the
competitiveness of primary producers by better integrating them into the
agri-food chain through quality schemes, adding value to agricultural products,
promotion in local markets and short supply circuits, producer groups and
organisations and inter-branch organisations.
Each rural
development program shall implement a strategy to meet the Union priorities for
rural development. The SWOT analysis of the situation and of the identification
of the needs that have to be addressed has to be structured around the Union
priorities. The program strategy has to demonstrate that appropriate targets
are set for each of the focus areas of Union priorities and that relevant
combination of measures are selected in relation to each of the focus areas
based on a sound intervention logic supported by the ex ante evaluation and
SWOT analysis.
The
Commission will only approve rural development programmes fulfilling these
requirements.
213.       (Part XV, §162 -
2012/PAR/0511) The Parliament calls on the Commission to ensure that
these criteria [Member States' selection criteria] are correctly and
continuously applied and welcomes the Commission's proposal for the next
programming period stipulating that selection criteria should be defined for
operations under all measures.
Commission's
response:
The
requested action has been taken. Under Article 49 of Regulation (EU) No 1305/2013,
the Managing Authority shall define selection criteria, which aims to ensure
equal treatment of applicants, better use of financial resources and targeting
of measures in accordance with Union priorities for rural development. In
defining and applying selection criteria the principle of proportionality shall
be taken into account in relation to the size of the operation.
The
selection criteria are applicable to all measures with the exception of
(multi)annual compensatory payments under Articles 28 to 31, 33 and 34 and the
risk management measures under Article 36 of Regulation (EU) No 1305/2013.
In
addition, beneficiaries may be selected on the basis of calls for proposals,
applying economic and environmental efficiency criteria.
214.       (Part XV, §163 -
2012/PAR/0512) The Parliament reiterates the belief that the Commission
and Member States should promote the adoption of best practices in respect of
the mitigation of deadweight and displacement risks; (…) ; requests that the
Commission report back to the discharge authority on the progress made as
regards exchange of best practices on the mitigation of deadweight and
displacement risks with Member States.
Commission's
response:
The
requested action has been taken. A document titled "DRAFT DISCUSSION
DOCUMENT ON TARGETING AND DISPLACEMENT RISKS" was prepared by the
Commission (DG AGRI/H1) and presented in the 79th Rural Development Committee
meeting in November 2013 (available in CIRCA). The document described all major
points on deadweight and displacement made by ECA in the course of its audits
on rural development in the last years, the reasons why the issues have been
considered as such, the good practices discovered as well as the new legal
changes in the EAFRD legal framework that ensure that the Commission has
addressed these points. The document was complemented by the United Kingdom's
presentation on how it addresses these two issues and an exchange with Member
States in the committee.
Article
60(2) of Regulation (EU) No 1305/2013 provides that, with the exception of
preparatory costs, expenditure under agricultural investment operations is
eligible only after an application has been submitted to the competent
authority, in line with general state aid practice. Furthermore, the same
article provides that the Member States may require in their programmes that
only expenditure that has been incurred after the application of support has
been approved.
215.       (Part XV, §164 - 2012/PAR/0513)
The Parliament endorses the Court of Auditors' recommendation that in
the new programming period, the Commission should improve the Common Monitoring
and Evaluation Framework (CMEF) in a way that it provides useful information on
the achievements of the projects and measures financed by means of enhancement
of on-going evaluation activities; believes that current methodology, using
lengthy mid-term evaluation reports, has proven to be inadequate.
Commission's
response:
The
proposals for the monitoring and evaluation system for the period 2014-2020
introduce a number of changes. There is no longer the requirement of a mid-term
evaluation, instead extended annual implementation reports shall be submitted
in 2017 and 2019 in which (among other things) progress towards achieving the
objectives of the programme is to be set out and assessed (Regulation (EU)
1303/2013 (Art 50)). In order to be able to deliver the necessary information,
Member States are required to carry out evaluations during the programming
period according to an evaluation plan (see proposal for CPR art. 56). In this
way, the reporting on results and impacts of the policy will be better adjusted
to the information available at various stages of the programming period.
216.       (Part XV, §165 -
2012/PAR/0514) The Parliament reminds the Commission that collecting
detailed data at measure level is indispensable for enabling the CMEF to
provide details as to the success of the measures.
Commission's
response:
The CMEF
contains a number of data at the measure level. However, to properly judge on
the success of a policy, measures should not be looked at in isolation, since
often it is more than one measure that contributes to reaching an objective, or
similarly, an individual measure can contribute to more than one objective. For
this reason, in the new Common Monitoring and Evaluation Framework, results
will not be assessed at individual measure level but at the more appropriate
focus area level.
SR 2/2013 Has
the Commission ensured efficient implementation of the Seventh Framework
Programme for Research?
217.       (Part XVI, §171 -
2012/PAR/0515) The Parliament encourages the Commission to follow the
Court of Auditor's recommendation to concentrate the ex-ante checks on riskier
beneficiaries, thereby introducing the beneficiary risk profile, based on
results from the ex-post controls and performance record.
Commission's
response:
Improvements
of the ex-ante control structure are continuous. For Horizon 2020 red flags
will be built into the IT systems to indicate the risk profile of expenditure
and previous audit results.
218.       (Part XVI, §173a -
2012/PAR/0516) The Parliament encourages the channelling of research
output into initiatives with a tangible beneficial impact on citizen's daily
life, for example those that feed into the concept of smart cities and prevent
the generation of research for the sake of research.
Commission's
response:
The
Horizon 2020 work programmes (which set out calls for proposals), are designed
to maximise the impact of the supported activities, including tangible
beneficial impact on citizens’ daily life. 
The
current work programme((2014-2015) contains an entire call for proposals
devoted to Smart Cities, accounting for a total budget of €200,5million.
It's worth
noting that, under its "Secure Societies" challenge, Horizon 2020
supports research dedicated to the security of the citizen by enhancing the
work of police, firemen and medics amongst many other things.
Horizon
2020 also supports world-class blue-sky research, (notably under the European
Research Council), with the potential to trigger disruptive innovations of the
future.
219.       (Part XVI, §173b -
2012/PAR/0517) The Parliament encourages, therefore, the further
advancement of research activities in this field [security and defence], with a
view of exploiting possibilities for dual-use technologies and know-how
transfer to the civilian sector, so as to better address societal challenges.
Commission's
response:
Horizon
2020 maintains a civil research orientation covering civilian security
research. In this context, the Work Programme 2014 – 2015, 14, Secure societies
– Protecting freedom and security of Europe and its citizens will contribute to
the implementation of the policy goals of the Europe 2020 strategy, the
Security Industrial Policy (COM(2012) 417 final ), the Internal Security
Strategy  (COM(2010) 673 final) and the Cyber Security Strategy (JOIN(2013)1
final).
As example
of the topics covered, this programme aims to enhance the resilience of our
society against natural and man-made disasters; to fight crime and terrorism;
to improve border security and to provide enhanced cybersecurity. 
Dual-use
aspects are and will be opportunely considered with possible synergies being
established with the corresponding stakeholders for instance under the European
Framework of Cooperation with the European Defence Agency or also with the
European External Action Service.
220.       (Part XVI, §178 -
2012/PAR/0518) The Parliament recommends, however, that it should be
established beyond doubt that the instrument [RSFF] is used as an efficient
tool for riskier research projects which would otherwise not be supported by
commercial banks but could lead to major innovation breakthroughs.
Commission's
response:
Following
the opinion of the Independent Expert Group documented in the Second Interim
Evaluation of the RSFF published on 30 June 2013 it was confirmed that
"the RSFF clearly provided for an increased capacity of the EIB to lend to
riskier projects and companies investing in RDI". Based on statistical
data the report acknowledges that the RSFF managed to mobilise "additional
private investment in research and innovation (i.e. multiplier effect) of € 30
billion (expected) / €34 billion (realised)". Data gathered at the end of
FP7 further stresses the success of the RSFF under which by end-2013 114
projects with broad sector diversification located in 25 countries worth EUR
11.31 billion had been approved. 
The focus
of the RSFF successor under Horizon 2020 will support R&I goals in all
sectors and policy areas crucial for tackling societal challenges, enhancing
innovation and fostering sustainable growth by providing loans to midcaps,
larger companies, research institutes, stand-alone projects, PPPs. 
Additionally,
the Risk Sharing Instrument (RSI) pilot (a dedicated instrument targeting
research intensive, innovative SMEs and small midcaps) was launched in 2012 and
is a guarantee facility which forms part of a single debt financial instrument.
By end-2013, funding going to 23 intermediaries located in 14 countries
allocated to 578 beneficiaries amounting to €1.21 billion had been approved. 
Horizon
2020 makes greater use of financial instruments to attract yet more investment,
both public and private, into Research, development and Innovation. For the
first time, the programme will support equity investments, including by
business angels and venture capitalists, into innovative firms (mainly SMEs) at
the early stage of development, and will pilot a scheme to co-invest with
technology transfer funds and offices. From a total budget of €2.84 billion
covering debt and equity financial instruments and accompanying measures, at
least one-third is likely to be absorbed by SMEs and small mid-caps.
SR 3/2013 Have
the Marco Polo programmes been effective in shifting traffic off the road?
221.       (Part XVII, §184 -
2012/PAR/0519) The Parliament urges the Commission to draw conclusions
from the results of Marco Polo programmes (on-going) and to take the best
practices, but also to learn from errors in the design and implementation for
future programming.
Commission's
response:
The
Commission is taking the requested action.
Over the
lifecycle of Marco Polo, the Commission continuously monitored the programme's
results, which entailed modifications to its design (e.g. the proposal for
amending regulation 923/2009). In May 2013, based on the operational data
delivered by the programme, the Commission published a Communication on Marco
Polo (COM(2013) 278), announcing a change of the approach regarding the funding
for the freight transport services in the next MFF. Consequently, the programme
in its current form has been discontinued and instead measures applicable for
freight transport services have been incorporated in the framework of the
revised TEN-T programme and the Connecting Europe Facility (CEF). Relevant best
practices as well as the weaknesses of the Marco Polo programme will be taken
in due consideration while designing and implementing a future funding scheme.
222.       (Part XVII, §191 -
2012/PAR/0520) The Parliament considers that the expected results of
future programmes should be weighted with the financial amounts allocated and
the volume of the sector addressed.
Commission's
response:
The
Commission is taking the requested action.
Detailed
actions, criteria, target group, expected impacts and a budgetary allocation
for the new scheme supporting freight transport services will be based on a
dedicated, in-depth ex-ante assessment and will be coordinated with other
measures under the CEF framework.
223.       (Part XVII, §193 -
2012/PAR/0521) The Parliament shares the view of the Court of Auditors
that best practices from national experiences should have been used to improve
the management and definition of the programmes.
Commission's
response:
The
Commission is taking the requested action.
While
developing the Marco Polo programme, the Commission made an inventory of the
national support schemes and carried out a relevant analysis in order to ensure
synergy and to avoid duplication between different funding instruments at the
EU and the Member States level. The Commission acknowledges the potential
advantages of using the experience from national schemes but, at the same time,
draws the attention that the EU-based programmes have a different nature in the
sense that they need to be justified on grounds of subsidiarity. They need to
address problems, which cannot be addressed by the Member States themselves and
achieve objectives, which are not possible to achieve at the national level.
There are also significant differences between the Member States in terms of
geographical location, freight flows, infrastructure availability, modes used,
etc.
Taking the
above into consideration, best practices from national experiences will be
taken in duly consideration while defining the future approach.
224.       (Part XVII, §194-195 -
2012/PAR/0522) The Parliament notes that it [the Union transport
sector] faces enormous constraints (interoperability, different national
regulations, sectors differently open to competition) which need additional
measures other than financial support (regulatory, political will, proper
implementation and enforcement). It recalls in that sense its resolution of 15
December 2011 on a Single European Transport Area pointing out that modal
transfers cannot be achieved by means of legislation, but only by exploiting a
functioning infrastructure, intrinsic advantages and strengths and incentives.
Commission's
response:
The
requested action has been taken.
A
comprehensive strategy integrating a broad range of relevant measures was
published in 2011. The White Paper of Transport presented a vision for a
competitive and sustainable transport system and paved the way for establishing
a genuine single European transport area. It is the basis for developing
relevant sectorial transport policies using appropriate instruments
(regulatory, financial etc.)
225.       (Part XVII, §196 -
2012/PAR/0523) The Parliament calls on the Commission to look for
improving participation of single mode operators that could also benefit from
future initiatives; notes, however, the Court of Auditors' remark on the
complexity of the programme as pointed by the beneficiaries who might have
discouraged potential additional interested.
Commission's
response:
The
Commission is taking the requested action.
In order
to explore different policy options for the new approach concerning efficient
and sustainable freight transport services, the ex-ante assessment will go
beyond the modal shift approach. Depending on the results of this assessment,
the new approach may allow for participation of single mode operators, thus
expanding the target group for this scheme. In addition, efforts will be made
in the current legal and transport policy contexts to address the issue of
complexity.
226.       (Part XVII, §197 -
2012/PAR/0524) The Parliament considers that a poorly adapted
regulatory framework together with a lack of proper information and
communication of the programmes are also elements that need to be taken into
account when analysing the programmes' weaknesses; calls on the Commission to
seek solutions to improve and enlarge potential beneficiaries by reducing
complexity and administrative burden as well as improving communication of
future actions.
Commission's
response:
The
Commission is taking the requested action.
The
communication and promotion aspects are considered important, and along with
simplification of applicable procedures will be duly taken into consideration
(depending on the results of the ex-ante evaluation) while designing the new
scheme in the given legal and funding framework (TEN-T and CEF).
As regards
the EP statement about the regulatory framework of the Marco Polo programme,
the Commission does not fully agree that it was poorly adapted. The
implementing rules of the programme (annual work programmes and calls for
proposals) followed in principle the provisions stipulated in the basic
regulation, and where legally possible, tried to interpret these provisions to
the benefit of the applicants/beneficiaries (e.g. the international dimension
of the route from which the cargo is shifted was not fully clear in the
regulation; this was interpreted that the modal shift can effectively take
place in one country provided that the entire route is international). 
The
Commission also disagrees that there was a lack of proper information and
communication. Actually, the communication efforts were improved over time.
They were based on a dedicated study and included organisation of public events
(conferences, info days), dissemination of newsletters, publication of ads in
the traditional media, use of the social media etc.
227.       (Part XVII, §199 -
2012/PAR/0525) The Parliament stresses, however, that the Commission
should have been particularly attentive when measuring the results of
beneficiaries; notes that the Commission did improve on the control of results.
Commission's
response:
The
Commission is taking the requested action.
The
Commission acknowledges the need for appropriate tools and data to measure
results of beneficiaries and this will be taken in due consideration while
designing the new scheme in the given legal and funding framework in the given
legal and funding framework (TEN-T and CEF).
228.       (Part XVII, §201 -
2012/PAR/0526) The Parliament believes that the development of a strong
methodology can serve also to provide information for potential operators that
could be interested in modal shift, in particular SMEs with lack of resources
to develop these tools.
Commission's
response:
The
Commission is taking the requested action.
The
Commission acknowledges that adequate methodology for measuring of results,
striking balance between the friendliness of use and accuracy of data should be
set up while developing the new approach. However, it should be noted that following
the policy evolution, the new targets will not necessarily be set in respect to
the volumes shifted off the road.
229.       (Part XVII, §203 -
2012/PAR/0527) The Parliament urges the Commission to provide more
in-depth analysis for future programmes involving a modal shift.
Commission's
response:
The
Commission is taking the requested action.
The
Commission has already launched an in-depth ex-ante assessment for the
follow-up of the Marco Polo programme. However, depending on the results of
this assessment, the focus of the new scheme would not necessarily stay on the
modal shift principle.
230.       (Part XVII, §204 -
2012/PAR/0528) The Parliament calls on the Commission to take into
consideration the higher risks involved [by the absence of market demand] and
to learn from the unsuccessful experiences and combine financial incentives,
possibly also with financial aid for infrastructure as pointed by the Court of
Auditors, as well as with other regulatory measures.
Commission's
response:
The
Commission is taking the requested action.
The new
scheme for the freight transport services will be designed taking into account
specific characteristic of the sector, experience gained from Marco Polo
programme as well as other national-based funding schemes. Integration with the
framework established by the new TEN-T guidelines and use of the funding
instrument provided under the CEF will facilitate harmonised and coordinated
implementation of the scheme within the European transport policy.
231.       (Part XVII, §204 -
2012/PAR/0529) The Parliament calls on the Commission to analyse trends
in possibly reversing shift modes, to address solutions and to cooperate
closely with the Directorates involved in order to have a systemic approach
when drafting legislation and designing new financial support programmes.
Commission's
response:
The
Commission is taking the requested action.
The
Commission acknowledges the challenge of avoiding reverse modal shift as an
indirect effect of stricter emission limits. A relevant analysis had been
undertaken to address the issue (e.g. The Sustainable Waterborne Transport
Toolbox of 2011 and the subsequent progress report in 2013). The issue is
furthermore being addressed by the European Sustainable Shipping Forum ESSF
together with Member States and industry.
SR 4/2013 EU
Cooperation with Egypt in the Field of Governance
232.       (Part XVIII, §213 -
2012/PAR/0530) The Parliament notes that this Special Report on EU
Cooperation with Egypt in the field of governance contains many important
observations and that it is important that the Court of Auditors not only
assesses the quality of financial management but also reviews the performance
achieved with Union programmes; calls therefore on the Commission to regularly
evaluate the results achieved.
Commission's
response:
The
Commission has taken the requested action. To measure the performance of its
aid programmes, the Commission has tools that allow it to draw lessons from
past experience. In addition to system and financial audits on each project it
funds, the Commission, in line with the Project Cycle Management methodology,
conducts regular independent results-oriented monitoring exercises as well as
mid-term, final and ex-post evaluations. Five dimensions are systematically
assessed: relevance, efficiency, effectiveness, impact and sustainability.
SR 5/2013 Are
EU Cohesion Policy funds well spent on roads?
233.       (Part XIX, §217 -
2012/PAR/0531) The Parliament calls on the Commission and Member
States, in the context of the new programming period, to establish a reliable
and measurable set of indicators in order to address this issue [while
objective were set for the road projects, their impact on economic development
could not be assessed due to lack of appropriate indicators].
Commission's
response:
The
Commission shares the view that road projects should have clear objectives
accompanied by appropriate indicators and considers it already implemented.
The new
legal framework of the ESI Funds for the 2014-2020 programming period contains
a comprehensive performance framework and conditionality which will help in ensuring
that future road projects will contain clear objectives accompanied by
indicators.
234.       (Part XIX, §219 -
2012/PAR/0532) The Parliament calls on the Commission to continue
updating and adjusting its guide to cost-benefit analysis for investment
projects, [which applies to all projects] and giving guidance on carrying out
traffic forecasts.
Commission's
response:
The
Commission is updating its guide for cost-benefit analysis for the new
programming period.
235.       (Part XIX, §220 -
2012/PAR/0533) The Parliament calls on the Commission to facilitate an
exchange of best practice among Member States with regard to establishing
reliable traffic forecasts on the one hand, and calculating the possible
economic impact of roadway constructions on the other hand.
Commission's
response:
The 2008
Commission’s Guide to Cost-Benefit Analysis of investment projects, which
applies to all projects, gives guidance on carrying out traffic forecasts. The
Commission will also invite JASPERS (Joint Assistance to Support Projects in
European Regions, a partnership between the European Commission, the European
Investment Bank, the European Bank for Reconstruction and Development and the
Kreditanstalt für Wiederaufbau. It is a technical assistance facility for the
12 EU Member States that joined the EU in 2004 and 2007. It provides them with
the support they need to prepare high quality major projects, which will be
co-financed by EU funds) to consider this topic for planning their future
networking platform meetings with Member States to promote the exchange of best
practices.
The
Commission considers that the effects on the economy depend not only on road
projects but also on the contribution of other economic and social factors. In
this regard the Commission recalls that this contribution of the road project
to the economic effect can be disentangled from other contributions by means of
an evaluation, not an indicator.
236.       (Part XIX, §222 -
2012/PAR/0534) The Parliament asks the Commission to provide more
information on the possible set-up of Union-wide unit cost information for
engineers preparing estimates for new projects, with a view to assisting
beneficiaries in lowering their procurement costs.
Commission's
response:
The
Commission acknowledges the need for making available more detailed unit costs
information and is considering the issue in the update of the Commission’s
Guide to Cost Benefit Analysis for the new programming period.
SR 6/2013 Have
the Member States and the Commission achieved value for money with the measures
for diversifying the rural economy?
237.       (Part XX, §226 -
2012/PAR/0535) The Parliament points out the need for a greener, fairer
and fully legitimate common agriculture policy, which represents the principle
of "public spending for public goods"; believes that an increasing
socio-political use of funds for rural development will lead to a boost of
growth and jobs in rural areas.
Commission's
response:
The
Commission has taken the requested action. In the period 2014-2020 the EAFRD
will continue providing support to rural and farm businesses, as well as
service providers in rural areas. Infrastructural investments will also be
supported. Following the adoption of Regulation (EU) No 1305/2013 the EAFRD
enlarged its business support and now covers also small enterprises in rural
areas. It foresaw new support options such as start-up aid for new activities
of non-agricultural enterprises, for development of small farms, for
investments in any type of rural infrastructure (including large scale
renewable and broadband infrastructure) and services as well as support for
variety of co-operational activities between various actors, creating in this
way sufficient and bigger than in 2007-2013 possibilities for boosting growth
and jobs in rural areas. 
Moreover,
it elaborated and enlarged the possible support provided through financial
instruments, which should serve as another policy element contributing for
rural and agricultural growth and job creation.
238.       (Part XX, §227 -
2012/PAR/0536) The Parliament points out that appropriate
diversification projects should aim to develop local infrastructure and local
basic services in rural areas in order to prevent tendencies towards
depopulation; believes that the projects should also aim at making rural areas
more attractive to young people and should lead to new satisfactory and
well-paid job opportunities.
Commission's
response:
The
requested action has been taken. Regulation (EU) No 1305/2013 provides a
significant variety of support options for Member States for developing
diversification projects and local basic services, support entrepreneurship in
agriculture and rural areas in general, and enhance in this way job maintenance
and job creation in rural areas.
239.       (Part XX, §231 -
2012/PAR/0537) The Parliament believes that the Commission should
approve only those RDPs that present substantiated and comprehensive strategies
with a clear rationale that show how policy intervention will contribute to
strategic aims of creating growth conditions and employment opportunities as
well as countering rural depopulation.
Commission's
response:
The
Commission is taking the requested action. In the programming period 2014-2020,
the achievement of the objectives of rural development, which contribute to the
Europe 2020 strategy for smart, sustainable and inclusive growth, is pursued
through the Union priorities for rural development. One of the six priorities
is the promotion of social inclusion, poverty reduction and economic
development in rural areas. This priority is divided to three focus areas;
facilitating diversification, creation and development of small enterprises as
well as job creation, fostering local development and enhancing the
accessibility, use and quality of ICT.
Each rural
development program shall implement a strategy to meet the Union priorities for
rural development. The SWOT analysis of the situation and of the identification
of the needs that have to be addressed has to be structured around the Union
priorities. The program strategy has to demonstrate that appropriate targets
are set for each of the focus areas of Union priorities and that relevant
combination of measures are selected in relation to each of the focus areas
based on a sound intervention logic supported by the ex ante evaluation and
SWOT analysis.
The
Commission will only approve rural development programmes fulfilling these
requirements.
240.       (Part XX, §232 -
2012/PAR/0538) The Parliament is of the opinion that the Commission
should ensure that these criteria [Member States' selection criteria] are
correctly and continuously applied, not only in cases of budgetary shortage.
Commission's
response:
The
requested action has been taken. Under Article 49 of Regulation (EU) No
1305/2013, the Managing Authority shall define selection criteria, which aims
to ensure equal treatment of applicants, better use of financial resources and
targeting of measures in accordance with Union priorities for rural
development. In defining and applying selection criteria the principle of
proportionality shall be taken into account in relation to the size of the
operation.
The
selection criteria are applicable to all measures with the exception of
(multi)annual compensatory payments under Articles 28 to 31, 33 and 34 and the
risk management measures under Article 36 of Regulation (EU) No 1305/2013.
In
addition, beneficiaries may be selected on the basis of calls for proposals,
applying economic and environmental efficiency criteria.
241.       (Part XX, §233 - 2012/PAR/0539)
The Parliament requests the Commission and Member States to exchange
and promote the adoption of best practices in respect of mitigating the risks
of deadweight and displacement.
Commission's
response:
See reply
to Part XV, §163 - 2012/PAR/0512
242.       (Part XX, §234 -
2012/PAR/0540) The Parliament requires the Commission to encourage
Member States to adopt the practice whereby expenditure for investments would
be eligible only as of the date of grant approval.
Commission's
response:
The
requested action has been taken. Article 60 of Regulation (EU) No 1305/2013
states that with the exception of preparatory costs, only expenditure which has
been incurred after an application has been submitted to the competent authority
shall be considered eligible for investments falling under Article 42 of TFEU.
However,
this is fully in line with the normal incentive requirements for investments in
state aid rules (for example General Block Exemption Regulation). Support for
agricultural investments should not be subject to stricter rules than generally
applicable state aid rules which are also used by the Structural Funds.
Moreover,
Article 60 provides also possibility to Member States to provide in their
programmes that only expenditure which has been incurred after the application
has been approved by the competent authority shall be eligible for support.
243.       (Part XX, §235 -
2012/PAR/0541) The Parliament calls on the Commission to ensure that
Member States have effective systems to carry out checks on reasonableness of
costs.
Commission's
response:
The
Commission is taking the requested action. The draft implementing act on
controls and penalties includes a requirement for administrative checks to
cover the verification of the reasonableness of the cost submitted, with the
exception of operations implemented under the simplified costs options or in
the form of contributions in kind. The costs can be evaluated using a suitable
evaluation system, such as reference costs, a comparison of different offers
(public procurement or private tendering) or an evaluation committee, or a
combination of them.
The
Commission covers the issue of evaluation of the reasonableness of costs during
its audit missions on investment measures. It verifies that the Member State
has established an effective system to evaluate the reasonableness of costs.
Given the complexity of the subject, the Commission will continue to examine
the issue during its audit missions. It will also continue the discussions with
the Member States outside the Clearance of Accounts framework. 
The number
of audit missions is limited due to the number of available staff. Therefore,
the number and scope of these missions are decided on the basis of a risk
analysis. It should also be noted that in the new 2014-2020 programming period
an extended use of standard costs is foreseen. This will reduce the risk of
overstated costs.
244.       (Part XX, §236 - 2012/PAR/0542)
The Parliament invites the Commission and Member States to increase
their efforts in reducing the administrative burden and ensuring that payments
are made in a reasonable timeframe.
Commission's
response:
The
Commission is taking the requested action. Several simplification proposals
have been taken on board for the period 2014-2020. There is one single
regulation on the financing, management and monitoring of both pillars of the
CAP (Horizontal Regulation). For rural development, various measures have been
merged and streamlined, reducing the total number of measures from 39 to 17. In
this context, provisions have been clarified, eligibility rules have been
modified in order to be easier to implement and contract conditions have been
made more flexible. Simplified costs options, i.e. standard scales of cost
units, lump sums and flat-rate financing can be applied so that the processes
of claiming, administering and auditing reimbursement for payments made will be
easier for everyone.
In the
context of its proposal for Horizontal Regulation (resulting to Regulation (EU)
No 1306/2013), the Commission made proposal to align payment deadlines of area
and animal-related rural development measures to the schedule of direct
payments so as to prevent late payments, i.e. putting a deadline for payments
to 30 June of the year following the year of payment claim.
However,
the legislator postponed the implementation of the rule until claim year 2018.
In the
context of annual meetings with the managing authorities, the Commission
services can take up payment delays if such emerge.
245.       (Part XX, §237 -
2012/PAR/0543) The Parliament asks the Commission and Member States to
ensure that for the forthcoming programming period 2014-2020, relevant and
reliable information is obtained to facilitate the management and monitoring of
the measure and to demonstrate the extent to which the aid given is
contributing to the achievement of Union overarching priorities; believes that
the targets for job creation should be realistic and that the numbers of jobs
created should be accurately monitored; believes that the measures should be
better managed throughout the programming period, particularly if it becomes
apparent that targets set will not be achieved.
Commission's
response:
The
Commission agrees with the request and is taking care that in the preparation
of the Common Monitoring and Evaluation Framework for the future period, which
is currently being finalized (basic acts adopted, implementing acts under
discussions), weaknesses observed during this period are taken into account.
Therefore, for the next programming period, result indicators will rather be
assessed as part of the RDP evaluation. It will also be done by developing more
precise explanatory documents (fiches) for each indicator to avoid potential
inconsistencies in data collection through misinterpretation. 
For the
next programming period 2014-2020 the Commission is developing a Common
Monitoring and Evaluation Framework (CMEF), together with the Member States,
which will allow the assessment, for each RDP, of progress in implementation
against commonly defined target indicators for the priorities and focus areas
selected for the programme. At the basis is an indicator plan which for each
focus area sets the target and the planned outputs and expenditure for the
measures that will be used to achieve the targets and objectives of the
programme. The indicator plan represents more accurately the quantified
intervention logic for each individual programme than does the current rigid
axis structure
SR 7/2013 Has
the European Globalisation Adjustment Fund delivered EU added value in
re-integrating redundant workers?
246.       (Part XXI, §243 - 2012/PAR/0544)
The Parliament asks the Commission to make clear the rationale for
setting the European Globalisation Fund apart from the European Social Fund.
Commission's
response:
The EGF
and the ESF are complementary policy measures. In line with the principle of
subsidiarity, the mix of EGF measures designed at Member State level is largely
complementary with mainstream ESF provisions to support transitions back to
employment.
It should
be noted that expenditure under the EGF is by its nature short-term and unpredictable
whilst the ESF has been established to address medium to long-term structural
problems, which require stable investment strategies. The Commission has
therefore considered it better to keep the EGF outside the ESF context, and
outside the Multiannual Financial Framework, allowing in turn the financial
flexibility the EGF requires.
The
decision whether to apply for ESF or EGF funding is made at Member State level
(on condition that the ESF operational programme agreed with the Commission is
compatible with such contemplated ESF support).
247.       (Part XXI, §245 -
2012/PAR/0545) The Parliament asks on what rationale this figure is
based [the Commission has proposed a re-integration objective of 50% of the
redundant workforce to have found new jobs after 12 months of implementation].
Commission's
response:
This was
based on the average reintegration rate of the first 15 EGF cases, evaluated in
the Mid-Term EGF evaluation, which was 41.8 % after 12 months and rising. This
was not accepted by the Council and the European Parliament, who opted instead
for the wording "find sustainable employment as soon as possible within
the 6-month period before the final report [...] is due."
248.       (Part XXI, §246 -
2012/PAR/0546) The Parliament asks [the Commission] for income support
to be limited to 25% per EGF measures.
Commission's
response:
The new
EGF Regulation for 2014-2020 places a cap on allowances of 35%. This ceiling
should further improve the efficiency and European added value of EGF measures
and ensure that spending is focused above all on training, business start-up
and similar active labour market policy measures.
249.       (Part XXI, §247 -
2012/PAR/0547) The Parliament calls on all the parties concerned to
switch to e-applications and limit additional information after the original
application to exceptional cases, and, in any case, no later than three months
after the original application.
Commission's
response:
The
Commission agrees that the 2007-2013 approval process has been long and
therefore strives to minimise delays where possible whilst ensuring that due
process takes place. The fact that EGF operates outside the Multi Annual Framework
unavoidably influences the timeline of procedures. The new EGF Regulation for
2014 to 2020 imposes timelines on the applicant Member States, the Commission
and the Budgetary Authority, so that the approval process will be significantly
shortened. In addition, the Commission is actively working to make progress in
reducing the time necessary for approval procedures, for example through the
development of e-applications and the simplification of procedures as much as
possible within the framework of the Regulation.
SR 8/2013
Support for the Improvement of the economic value of forests from the European
Agricultural Fund for Rural Development
250.       (Part XXII, §249(a) -
2012/PAR/0548) The Parliament notes that the Commission should define
and assess Union needs for improving the economic value of the forests and in
that respect integrate efforts and insights of related policy fields.
Commission's
response:
The
Commission's Communication (COM (2013) 659 final) of 20 September 2013 entitled
"A new EU Forest Strategy: for forests and the forest-based sector" –
along with its accompanying Staff Working Document (SWD (2013) 343 final) –
present detailed analysis of the EU forest sector and its needs. The broad thrust
of this analysis is reflected in Regulation (EU) No 1305/2013.
251.       (Part XXII, §249(b) -
2012/PAR/0549) The Parliament notes that the Commission should clearly
define the key features that would ensure that Union support is targeted to
address those needs, and thus create Union added value.
Commission's
response:
The
Commission is taking the requested action. In the programming period 2014-2020,
the achievement of the objectives of rural development, which contribute to the
Europe 2020 strategy for smart, sustainable and inclusive growth, is pursued
through the Union priorities for rural development. 
Each rural
development program shall implement a strategy to meet the Union priorities for
rural development. The SWOT analysis of the situation and of the identification
of the needs that have to be addressed has to be structured around the Union
priorities. The program strategy has to demonstrate that appropriate targets
are set for each of the focus areas of Union priorities and that relevant
combination of measures are selected in relation to each of the focus areas
based on a sound intervention logic supported by the ex ante evaluation and
SWOT analysis.
The
Commission considers that more specific needs should continue to be assessed
and defined at national and programme level by the competent national and
regional authorities. 
The
Commission believes it continued to define basic eligibility conditions at EU
level and more precise eligibility conditions and selection criteria should be
set within individual RDPs. It believes that its proposals for a rural
development policy for after 2013 follow this approach
Member
States are required in the new Measure 25 (“Investments in equipment and
improvements to the economic value of forests”) to explain how their Rural
Development Programme is contributing to the focus areas within the Union’s
priorities. The Commission prepared guidance documents for MS for each forestry
measure in order to ensure that the key features are defined in RDPs.
252.       (Part XXII, §252 -
2012/PAR/0550) The Parliament notes that the Commission should improve
its monitoring of the measure in order to ensure that the Member States
implement it in line with the specific objectives set and in order to obtain
short and long term sustainability.
Commission's
response:
The
monitoring and evaluation system has been subject to review by the Commission
and Member States in order to improve its efficiency and effectiveness,
especially in terms of reliability and comparability and foster ownership by
sharing good practices and building capacity. According to the new legal
framework for the rural development policy 2014-2020, quantified result
indicators will be used to assess progress towards targets established ex ante
at programme level. 
In
practice, it has been difficult for MAs to compile the necessary data and
conduct the analysis required to establish values for these types of result
indicators as part of their regular monitoring activities for the programming
period 2007-2013. 
Therefore,
for the programming period 2014-2020, the establishment of values for this
indicator will be undertaken by the programme evaluators. 
The
Commission considers this a feasible and adequate approach.
SR 9/2013 EU
support for governance in the Democratic Republic of the Congo
253.       (Part XXIII, §253(a) -
2012/PAR/0551) The Commission and the EEAS should with a view to
programming for the 11th EDF and the design of future Union programmes, (i) pay
increased attention to ensuring an appropriate balance of aid between
provinces, especially the poorer ones, in order to avoid geographical
disparities in the distribution of development aid while bearing in mind the importance
of stabilising the Great Lakes region as a whole; (ii) combine support at a
central level with programmes at the provincial level that link political and
territorial decentralisation with improved natural resource management
strategies and infrastructure rehabilitation and development; and (iii)
consider Union support for improved management of natural resources on the
basis of a comprehensive needs assessment.
Commission's
response:
See reply
to recommendation 1 (a) of the Special Report 9/2013.
While
sharing the general preoccupations expressed by the Court, the Commission and
the EEAS do not accept the recommendation of the Court and will not be taking
the requested action. The reason for this is that: 
(i) The
Commission will continue to aim at achieving an appropriate balance of aid
between all provinces including the poor ones in full coordination with other
donors and taking into consideration that the poorest DRC provinces are also
the least populated. 
(ii) The
Commission will continue to involve local actors in the implementation of its
projects, and within the limit of their capacity. The Commission will also
support their capacity building. 
(iii) The
Commission will continue to support the improved management of natural
resources provided that it is confirmed as a sector of the 11th EDF and in the
context of work sharing arrangements with other donors.
254.       (Part XXIII, §253(b) -
2012/PAR/0552) The Commission and the EEAS should place greater emphasis,
in its dialogue with the Democratic Republic of the Congo (DRC) government, on
the fact that democratic elections are a key component of governance and
carefully assess all risks to ensure that Union programmes in this area do not
support regime entrenchment.
Commission's
response:
The
requested action has been taken.
The
Commission and the EEAS maintain close contacts with the CENI and other
relevant national institutions in support of the democratic development of DRC.
The EU supports pluralism in DRC both in parliament and in civil society, and
will continue to take measures to strengthen both. Concerning the specific risk
of "regime entrenchment", the Commission and the EEAS will ensure
that all EU programmes in this area are in line with EU political options and
democratic principles promoted by the EU while respecting the sovereignty of
the partner country.
255.       (Part XXIII, §253(c) -
2012/PAR/0553) The Commission and the EEAS should promote improved DRC
government accountability by considering increased support to strengthen the
capacity of national oversight institutions, in particular the specialised
committees of the National Assembly and the supreme audit institution.
Commission's
response:
See reply
to recommendation 1 (c) of the Special Report 9/2013.
The
requested action has been taken.
The
Commission and the EEAS will continue to strengthen and possibly increase the
capacity of national oversight institutions, in the context of work sharing
arrangements with other donors. Special attention is given to the improvement
of public finance management systems, especially in our main focal sectors, in
the 11th European Development Fund (EDF).
256.       (Part XXIII, §253(d) - 2012/PAR/0554)
The Commission and the EEAS should in all governance areas covered by
the Union cooperation strategy, systematically consider the need to support the
fight against fraud and corruption, as well as the reform of the judiciary.
Commission's
response:
See reply
to recommendation 1 (d) of the Special Report 9/2013.
The
Commission and the EEAS are taking the requested action. The fight against
fraud and corruption is not only considered in governance areas, but also in
other focal areas such as health and natural resources.
257.       (Part XXIII, §254(a) -
2012/PAR/0555) The Commission should at the outset of programmes and
regularly during their implementation, assess the likelihood and potential
impact of the main risks to the achievement of programme objectives; notes that
this will involve (i) appraising the relevance and credibility of the country's
policies and action plans for improving governance in relation to the available
institutional and financial resources and (ii) monitoring progress against
commitments made by the DRC authorities.
Commission's
response:
See reply
to recommendation 2 (a) of the Special Report 9/2013.
The
Commission and the EEAS agree with the recommendation since these are
principles that the Commission already applies. 
The
Commission is taking the requested action. Effective risk management requires
attention to political, operational and fiduciary risks at the relevant moments
in the programming and project cycle, in particular at project identification
and formulation.
258.       (Part XXIII, §254(b) -
2012/PAR/0556) The Commission should establish measures to prevent or
mitigate risks and clearly define the course of action to be followed if risks
become reality, bearing in mind the risks of fraud and corruption in
particular.
Commission's
response:
See reply
to recommendation 2 (b) of the Special Report 9/2013.
The
Commission and the EEAS do not accept this part of the recommendation. 
The course
of action to be followed if risks become reality will be defined taking into
account the overall political situation prevailing at the time and in
coordination with other donors.
259.       (Part XXIII, §255(a) -
2012/PAR/0557) The Commission should focus objectives on a limited
number of priorities.
Commission's
response:
See reply
to recommendation 3 (a) of the Special Report 9/2013.
The
requested action has been taken. In line with agreed policy for EDF
programming, the EEAS and the Commission have delimited four sectors of
concentration in the Democratic Republic of the Congo.
260.       (Part XXIII, §255(b) -
2012/PAR/0558) The Commission should set out a time frame, including
mid-term evaluations, which is better adapted to the programme environment.
Commission's
response:
See reply
to recommendation 3 (2) of the Special Report 9/2013.
The
Commission and the EEAS cannot agree to this recommendation. 
The
Commission designs projects on the basis of its best knowledge at the specific
time, taking into consideration the constraints of the Financial Regulation. If
problems or delays occur, projects may be amended and possibly extended.
Moreover,
a monitoring and evaluation system is already in place to help informing these
decisions.
261.       (Part XXIII, §255(c) -
2012/PAR/0559) The Commission should provide for flexibility during the
programme implementation so that objectives can be reviewed promptly where appropriate.
Commission's
response:
See reply
to recommendation 3 (c) of the Special Report 9/2013.
The
Commission and the EEAS cannot agree to the recommendation. 
As is
normal practice, the Commission amends programmes notably following Result
Oriented Monitoring (ROM) missions and policy/political dialogue with partner
countries.
262.       (Part XXIII, §256(a) -
2012/PAR/0560) The Commission and the EEAS should strengthen their
structured political and policy dialogue with the country; notes that this will
involve, in full respect of the provision of the Cotonou Agreement (notably
article 96) (i) setting clear, relevant, realistic and time-bound targets which
are mutually agreed upon with the national authorities, (ii) periodically
assessing compliance with the agreed targets as part of the regular political
dialogue with the government, and (iii) if the DRC government shows
insufficient commitment to compliance, consider, after careful deliberation,
adapting or in exceptional cases, suspending or terminating the programme.
Commission's
response:
The
Commission accepts the European Parliament request, which is different from the
related one presented by the Court of Auditors (4 (a) of the Special Report
9/2013), and takes into account the Commission's original response regarding
the principles agreed internationally in 2011 for a “New deal for engagement in
fragile states”. This involves: 
(i)
Setting clear, relevant and realistic benchmarks taking into consideration the
fragility of the country; (ii) periodically assessing compliance with these
agreed benchmarks; (iii) discussing with partner country compliance gaps and
corrective measures in the context of political/policy dialogue, and (iv)
keeping in mind the need to promote aid predictability.
263.       (Part XXIII, §256(b) -
2012/PAR/0561) The Commission and the EEAS should urge the DRC
government to adopt the necessary measures for improving, where necessary, the
functioning of the thematic working groups, and monitor the implementation of
those measures.
Commission's
response:
See reply
to recommendation 4 (b) of the Special Report 9/2013.
The
Commission is taking the requested action; this is a responsibility of the
entire donor community, including the EU. It is currently done through policy
dialogue of all donors and the DRC government.
264.       (Part XXIII, §256(c) -
2012/PAR/0562) The Commission and the EEAS should take a more active
leadership role towards Member States to encourage coordinated policy dialogue
and increase Union leverage over the DRC government.
Commission's
response:
See reply
to recommendation 4 (c) of the Special Report 9/2013.
The
Commission and the EEAS cannot accept the recommendation. 
The
Commission and the EEAS are fully engaged in encouraging coordinated EU policy
dialogue. The EU leverage over the DRC is not just a matter of development aid,
but rather a function of the comprehensive relation between the EU and the partner
country.
265.       (Part XXIII, §257(a) -
2012/PAR/0563) The Commission should provide Parliament by May 2014
with an overview of the state of play of the projects visited by the Court of
Auditors.
Commission's
response:
The
Commission is taking the requested action.
The
Commission could provide the Parliament an update on the state of play of the
visited projects by the end of June.
266.       (Part XXIII, §257(b) -
2012/PAR/0564) The Commission should provide Parliament by June 2014
with an overview of all on-going projects in DRC and inform it on how much
money will be still available and from which funds.
Commission's
response:
The
totality of the 10th EDF funds for DRC has been completely committed and
therefore there is no money available from existing EDF funded projects. An
overview of available funds will be given for Budget funded projects. The
Commission will shortly provide a list of ongoing projects in DRC funded from
EDF and Budget funds.
SR 10/2013
Common Agricultural Policy: Is the specific support provided under Article 68
of Council Regulation (EC) No 73/2009 well designed and implemented?
267.       (Part XXIV, §258(a) -
2012/PAR/0565) Specific support for certain agricultural activities
should be based on a strict understanding of the provisions of Article 68 and
the new delegated acts should require that the granting of such coupled support
should be adequately justified to the Commission and checked by it.
Commission's
response:
In the
post-2013 CAP, the Member States will have to inform the Commission on the
regions targeted, the selected types of farming or sectors and the level of
support to be granted. In doing so, they will describe the reasons why the
coupled support is envisaged and what the expected effects are. 
Where the
decision taken by the Member State triggers the derogation from the basic
percentage of the national ceiling, a detailed description of the particular
situation in the region targeted and of the particular characteristics of the
types of farming or specific sectors which justify the increased level of
support will be required. Where the Member State's decision is subject to
approval, specific constraints such as the lack of alternatives or the need to
provide stable supply to local processing industry shall be demonstrated.
Regulation
(EU) No 1307/2013 of EP and Council was adopted on 17.12.2013 and the related
delegated act on 11.03.2014.
268.       (Part XXIV, §258(b) -
2012/PAR/0566) The Parliament notes that to be able to assume its
ultimate responsibility under the system of shared management, the Commission
should play a more active role in establishing the criteria governing the
implementation of the measures, and in assessing measures in a comparative way
to avoid unexplained and extreme variations in prices, such as those identified
in the examples for goats in this Special Report; notes that the legal tools to
do this should be established in the new delegated acts.
Commission's
response:
In the
context of the post-2013 CAP reform, the Commission has empowerment to define
the conditions for granting the aid through delegated acts. 
The
Commission's objective is to introduce a clear simplification in comparison
with the current specific support as the voluntary coupled support will refer
only to one of the nine measures existing under Article 68. This means that
despite the list of sectors eligible being more extended than before, the
number and the diversity of the objectives of the support are restricted to one
category (i.e. the economic vulnerability of certain types of farming). The
Commission considers that this will reduce the risk of overlapping and
accumulation of support.
Regulation
(EU) No 1307/2013 of EP and Council was adopted on 17.12.2013 and the delegated
act was adopted on 11.03.2014 (C1476 final).
269.       (Part XXIV, §258(c) -
2012/PAR/0567) The Parliament notes that the Member States should be
required, in the new delegated acts, to demonstrate that each specific support
measure which they intend to introduce is necessary (in terms of the need for
and added value of an approach based on derogations), relevant (in terms of
implementation arrangements, award criteria and aid levels), and that it
satisfies the criteria of sound financial management.
Commission's
response:
Under the
powers the Commission has been given through delegated acts, notably the
conditions for granting the support will be defined. 
As a
general rule, the Member States will have to inform the Commission on the
regions targeted the selected types of farming or sectors and the level of
support to be granted. In doing so, they will describe the reasons why the
coupled support is envisaged and what the expected effects are. 
Where the
decision taken by the Member State triggers the derogation from the basic
percentage of the national ceiling, a detailed description of the particular
situation in the region targeted and of the particular characteristics of the
types of farming or specific sectors which justify the increased level of
support will be required. Where the Member State's decision is subject to
approval, specific needs like the lack of alternatives or the need to provide
stable supply to local processing industry shall be demonstrated.
Regulation
(EU) No 1307/2013 of EP and Council was adopted on 17.12.2013 and the related
delegated act on 11.03.2014. 
The
adoption of delegated acts on direct payments is expected on 14 March 2014.
270.       (Part XXIV, §258(c) -
2012/PAR/0568) In particular and in response to the point expressed by
the Court of Auditors that “clearly defined cases” were not clearly defined,
implementation of the new Regulation (EU) No 1307/2013 should overcome the
problems identified, by Member States:
              (a)
establishing clear targets (as per Financial Regulation (EU, Euratom) No
966/2012);
              (b) creating
systematic monitoring systems for all measures taken under the new Articles
52-55 of Regulation (EU) 1307/2013;
              (c)
respecting uniformity in application across the Union so that management and
control systems can be streamlined, simple, and comparable;
              (d) ensuring
documentation of all measures/sub-measures and the use of up to date integrated
administration control system (IACS) information where relevant; 
              (e)
establishing rigorous on-the-spot checks at regional and Member State level.
Commission's
response:
The
Commission considers that these recommendations are addressed to the Member
States. The following may however be noted:
First the
establishment of a common monitoring and evaluation framework with a view to
measuring the performance of the CAP and the adoption of Regulations (EU) No
1306/2013 on the financing, management and monitoring of the CAP and of
Regulation No 1307/2013 for direct payments to farmers. The related delegated
and implementing acts are under finalization, in particular inter alia the
implementing act laying down rules with regard to the integrated administration
and control system (IACS), rural development measures and cross compliance.
Regarding
uniformity in application across the Union, complete uniformity is not possible
as Member States are responsible, within the framework established at EU level,
for deciding and designing the support measures to be implemented and will have
to ensure that such measures are verifiable and controllable (Cf also reply to
2012/PAR/0570.
Finally,
the Commission services will follow-up, through both monitoring and audit
activities, that Member States use up-to-date IACS information and perform
on-the-spot controls of sufficient quality.
271.       (Part XXIV, §259 -
2012/PAR/0569) Taking account of the variety of possible measures an
appropriate system of monitoring should be established to facilitate subsequent
evaluation.
Commission's
response:
The
implementing rules adopted by the Commission provide for obligations for the
Member States to periodically inform on the actual uptake of the measures
implemented. Such obligations are necessary for the Commission in order to
comply with its own obligation to regularly report to the WTO since coupled
support is concerned as derogation from the global decoupled orientation of the
direct payments schemes. For coupled support, minimum information will be
required on support measure sand on the amounts actually paid as well as the
number of beneficiaries per region, sector and/or type of farming in every
Member State. 
Notifications
submitted by the Member States at various dates will allow the Commission to
follow the actual implementation of the scheme for all the direct support
measures implemented irrespective of the sector concerned as well as the
compliance with the budgetary ceilings fixed. 
More
generally, R 1306/2013 includes the establishment of a common monitoring and
evaluation framework in cooperation with the Member States with a view to
measuring the performance of the common agricultural policy, including first
and second pillar measures.
272.       (Part XXIV, §260 -
2012/PAR/0570) The Parliament notes that in order to avoid generating
disproportionate costs on the limited scale of a specific support measure, the
requirement for controls should already be taken into account during the
measure’s design phase (simplicity of implementation, ‘controllability’ of
criteria, etc.) or possibly even in the decision on whether or not to introduce
a given measure.
Commission's
response:
Member
States are responsible for deciding and designing the support measures to be
implemented and will have to ensure that such measures are verifiable and
controllable. Therefore, they shall take into account the costs for management
and control resulting from the possible implementation of coupled support
measures and the possible need of setting up ad hoc control systems.
SR 12/2013 Can
the Commission and Member States show that the EU budget allocated to the rural
development policy is well spent?
273.       (Part XXV, §264 -
2012/PAR/0571) The Parliament believes that the Commission should
ensure - prior to their approval- that the Member States’ RDPs contain clear
objectives and evaluation plans that will provide information on the results
achieved by the planned actions according to the agreed objectives and in time
to inform policy decisions for the next programming period.
Commission's
response:
The
achievement of Rural Development Objectives shall be pursued through six Union
priorities defined in Article 5 of Regulation (EU) No 1305/2013 (RD
regulation).
The new
legal framework (Commission Implementing Regulation supplementing the RD
regulation adopted in July 2014) requires that the RDPs will have to clearly
describe the intervention logic, i.e., how the planned expenditure is
addressing the programme's strategy with quantified targets set at programme
level which contributes to each of the focus areas of the Union priorities for
rural development. The Commission Implementing Regulation also lays down
detailed requirements for the evaluation plans, including evaluation of
contribution of the RDPs to each of the Union priorities and assessment of
result and impact indicators values.
It will
not be possible to approve the RDPs, if the programme does not contain clear
intervention logic addressing Rural Development objectives or clear evaluation
plans.
274.       (Part XXIV, §265 -
2012/PAR/0572) The Parliament asks to be clearly informed on the
achieved results of the spending on rural development.
Commission's
response:
The
achievement of Rural Development Objectives shall be pursued through six union
priorities defined in Article 5 of Regulation (EU) No 1305/2013 (RD regulation).
Commission Implementing Regulation supplementing RD regulation
The legal
framework (Commission Implementing Regulation supplementing the RD regulation
adopted in July 2014) provides for common structure for intervention logic,
i.e., how the planned expenditure is addressing the programme's strategy with
quantified targets set at programme level which contributes to each of the
focus areas of the Union priorities for rural development.
At the
technical level the common intervention logic will be enforced in the mandatory
electronic system for data exchange between the Commission and the Member
States, which shall significantly contribute to better and harmonised M&E
of all national and regional rural development programmes and efficient way of
reporting on progress of RDPs towards targets set for each Union priority/Focus
Area.
275.       (Part XXIV, §266 -
2012/PAR/0573) The Parliament agrees with the Court of Auditors that
improvements to monitoring and evaluation should be made for the remainder of
the current spending period (end of 2015) to ensure that the Union budget is
spent well.
Commission's
response:
The
Commission worked with the Member States to improve the guidance and offered
support for evaluation, notably through an ‘Evaluation Helpdesk’. A thematic
working group was launched to prepare the guidelines for the ex-post
evaluations of the current RDPs. The main elements of these guidelines were
discussed in the evaluation expert network in February 2014; a final version is
available under the following address:
http://enrd.ec.europa.eu/evaluation/library/evaluation-helpdesk-publications/en/evaluation-helpdesk-publications_en.cfm#guidancein
276.       (Part XXIV, §267 -
2012/PAR/0574) The Parliament recommends that the Commission and Member
States improve the evaluation of the results of RDPs in the current funding
period and use the findings to improve the RDPs for the 2014-2020 funding
period.
Commission's
response:
The
Commission worked with the Member States to improve the guidance and offered
support for evaluation, notably through the ‘Evaluation Helpdesk’. A thematic
working group was launched to prepare the guidelines for the ex-post
evaluations of the current RDPs. The main elements of these guidelines were
discussed in the evaluation expert network in February 2014; the final version
was adopted in June 2014.
Following
the mid‑term evaluations, the Commission analysed the weaknesses and has
used the experience gained when planning the Common Monitoring and Evaluation
Framework for the 2014–20 period.
277.       (Part XXIV, §268 -
2012/PAR/0575) The Parliament calls on the Commission to improve the
Common Monitoring and Evaluation Framework (CMEF) for 2014-2020 so as to obtain
an efficient tool for the Member States and the Commission which generates
relevant data to be used for monitoring and evaluation; insists on the need to
develop reliable indicators to allow comparisons between Member States (and/or
regions) and to monitor the results of the various rural development measures
and their contribution in achieving the Union’s priorities.
Commission's
response:
The
Commission has already addressed the recommendation by a new design for the 2014-2020
Monitoring and Evaluation system. However, in the proposed design of the new
monitoring and evaluation system, although data on output is available at
measure level, since often more than one measure contributes to a given
objective, and similarly one measure can contribute to more than one objective,
results will not be assessed at individual measure level, but at the more
appropriate focus area level.. Instead of a Mid-Term Evaluations, there will be
enhanced Annual Implementation Reports in 2017 and 2019, which will incorporate
evaluation findings. The first will concentrate on elements related to
programme steering, and the second on providing an initial assessment of the
impact of the Rural Development Programmes. Member States are required to carry
out evaluation activities throughout the programming period in accordance with
the Evaluation Plan included in the Rural Development Programmes. Thus,
assessment and reporting on the results and impacts of the policy will be
linked more appropriately to the stage of implementation of the Rural
Development Programmes. 
Quantified
target indicators are foreseen for each of the Focus Areas. Annual reporting in
the Annual Implementation Reports is required for each of these. For some Focus
Areas, the target indicator is set at output level. Where the relevant result
indicator is more complex and not suitable for use as a target monitored
annually, its value will be assessed through evaluation, and reported in the
2017, 2019 and ex post reports.
278.       (Part XXIV, §269 -
2012/PAR/0576) The Parliament calls on them [the Commission and the
Member States] to ensure that RDPs are drawn up with clear requirements for use
of those indicators [compulsory common indicators for the 2014 - 2020
monitoring and evaluation framework for the CAP and RDPs].
Commission's
response:
Common
sets of context, result and output indicators are set out in the Commission
Implementing Regulation supplementing Regulation (EU) No 1305/2013 (RD regulation).
They are designed to capture the contribution of each RDP to Rural Development
objectives through six union priorities as defined in Article 5 of Regulation
(EU) No 1305/2013 (RD regulation).
The
Commission Implementing Regulation was adopted in July 2014. At the same time,
guidelines for the use of those indicators were provided.
279.       (Part XXIV, §270 -
2012/PAR/0577) The Parliament considers necessary to avoid dispersion
in the areas of regulation, application and budget, and to give this measure
uniformity in its implementation by Member States.
Commission's
response:
The
Commission has taken the requested action. Article 8 of Regulation (EU) No
1305/2013 requires that Member States have to explain in their programmes how
the support is targeted based on the SWOT analysis and needs assessment
structured around the Union priorities for rural development. Furthermore, the
same article requires that appropriate targets are set for each of the focus
area of the Union priorities for rural development.
However,
support should be targeted by individual Member States according to their
specific situation in terms of structural and territorial needs as identified
by the SWOT. Article 8 of Regulation (EU) No 1305/2013 requires also that the
allocation of financial resources to the measures of the programme is justified
and adequate to achieve the targets set.
280.       (Part XXIV, §271 -
2012/PAR/0578) The Parliament calls on the Commission to ensure that
Parliament receives the Annual Implementation Reports foreseen for 2017 and
2019 in a timely manner, so that it is also able to assess the results
indicators and impact of the RDPs.
Commission's
response:
This is
ensured by the transparency provision in Article 50 of the Common Provision
Regulation for the European Investment and Structural Funds, (EU) No 1303/2013:
following the admissibility and examination process, the Annual Implementation
Reports shall be made available.
SR 14/2013 European
Union direct financial support to the Palestinian Authority
281.       (Part XXVI, §274-275 -
2012/PAR/0579) The Parliament urges the Commission and the EEAS to
address the following issues without delay and to act together with the
Palestinian Authority and inform Parliament and the Council about the progress
made in due time. Inter alia:
              (a) the
Commission does not apply its standard internal quality review procedures to
the annual PEGASE DFS programme, which prevents it from fully assessing its
effectiveness and efficiency in comparison to other Union aid programmes;
              (b) no
performance indicators were included in the financing agreements making it more
difficult to assess the concrete results of the support, especially as regards
the percentage of the programme's funds spent on administrative costs compared
to the percentage of funds disbursed to the eligible beneficiaries;
              (c) the
Commission has not prepared a risk assessment addressing issues such as
corruption in Gaza with regard to the payroll system, which also raises
concerns about the risk of money laundering and terrorist financing;
              (d)
significant weaknesses persist in the Palestinian Authority's public finance
management, such as inadequate legislative scrutiny of the budget and the
external audit reports, or the lack of proper government procurement and
commitment controls.
Commission's
response:
Concerning
the introduction of performance indicators and the assessment of the
effectiveness and efficiency of the programme, the Commission will apply the
indicators used by the Palestinian Authority in its National Development Plan
2014-2016 and relevant sector strategies. In addition a dedicated
results-oriented framework, covering both fiscal/policy reforms and service
delivery, based on the Palestinian National Development Plan and its sector
strategies, is currently under preparation – in coordination with EU member
States in the framework of the EU Local Development Strategy. The Court of
Auditors' report considered that the Commission managed to deliver the PEGASE
programme successfully.
The
Commission will not take the requested action as regards the risk of money
laundering and terrorist financing, since the request disregards the comments
from the Court of Auditors, which said that there is no evidence of misuse of
funds and on the contrary each Euro of the PEGASE contribution is traceable and
the list of beneficiaries fully checked by external auditors. Furthermore, each
beneficiary is checked against international sanction lists.
The
improvement of Palestinian Authority's public finance management was addressed,
through two Technical Assistance programmes to reinforce PA Internal Audit and
Internal Control Departments, which were positively evaluated by external
evaluation. The EU has also supported the State Audit and Administrative
Control Bureau (SAACB) – the PA Supreme Audit Institution. The PA's
achievements in the area of audit were highlighted in the Public Expenditure
and Financial Accountability (PEFA) assessment produced in June 2013. According
to this assessment, the "developments of internal audit in line
ministries, as well as the efforts to increase the capacity and role of
external audit, in a short period of time are impressive".
With regard
to the lack of legislative scrutiny, the Commission and EEAS cannot disagree
with this remark, but, in the absence of a functioning Palestine Legislative
Council, cannot bring about the necessary change from outside. Nevertheless, it
should be noted that since the installation of the new Technical Unity
Government in June 2014, plans have been announced for the PLC to reconvene and
Pres. Abbas has tasked the Central Elections Committee with preparing
Presidential and Legislative elections for 4th December 2014.
282.       (Part XXVI, §276 -
2012/PAR/0580) The Parliament encourages the Commission to make the
application of competitive tendering procedures mandatory with a view to
seeking the best value for money and ensuring a level playing field between all
market participants, allowing for derogations in crisis situations.
Commission's
response:
The
Commission accepts the spirit of the request to consider competitive tendering
as the general rule, but cannot accept to make the application of competitive
tendering procedures mandatory.
The
applicable legislation (FR and its rules of application) allows for derogation
in different situations, whereof crisis situation is one of the cases. In view
of the recognition of a crisis situation in Palestine, which includes the
possibility of derogation, it would not be useful to lay such tendering
mandatory. However, in order to reduce the costs for administering PEGASE DFS,
the need for increased competitive tendering has already been taken into
account. The Commission has already taken the required steps to reduce the
costs of administering PEGASE DFS. A number of tenders have already been
concluded and others launched. The Commission has committed to extend
competitive tendering for contracts relating to the management and control of
PEGASE DFS whenever feasible.
283.       (Part XXVI, §277 -
2012/PAR/0581) The Parliament encourages the Commission and the EEAS to
continue the efforts to increase the Palestinian Authority's financial
independence from outside sources.
Commission's
response:
The
Commission and EEAS have, for a long time, been of the view that the Direct
Financial Support should be reduced. Nevertheless, the recurrent financial
difficulties of the PA have made this impossible to achieve. While Palestine
continues to have limited control over its resources, its dependence on outside
sources and international donors will be inevitable.
The
Commission and the EEAS consider that, in the current situation, all possible
measures to address the issue of sustainability of EU co-operation with
Palestine and to reduce Palestine's independence from external aid, are already
in place.
284.       (Part XXVI, §278 - 2012/PAR/0582)
The Parliament urges the Commission and the EEAS to fully take into
account the Court of Auditors' findings with regard to the absence of
conditionality of the Union direct financial support to the Palestinian
Authority which weakens the Commission's and EEAS's potential leverage towards
more reforms.
Commission's
response:
Among the
recommendations made by the Court of Auditors on PEGASE Direct Financial
Support, the one on conditionality was the only one rejected. PEGASE DFS is
provided to the Palestinian Authority without explicit conditionality, this was
a deliberate choice by the Commission, the EEAS and the Member States in line
with their political objectives in the Middle East peace process. However, the
EEAS and the Commission are monitoring the indicators contained in the
Palestinian national development plan and relevant strategies, on whose
priorities PEGASE was and remains based. While the absence of formal
conditionality is due to the unique circumstances, this does not imply the absence
of leverage vis-à-vis the PA. The leverage for reforms exists, is effective,
and takes place at different level – including through the ENP policy dialogue
process. A dedicated results-oriented framework is currently under preparation
(expected to be finalised by the end of the year), and which will further
structure the monitoring and support the policy dialogue related to PEGASE DFS.
The
introduction of formal conditionality would be an unjust and unproductive
pressure to put on a government which has only limited control over its
resources and its fragmented territory. Therefore, the Commission will not be
taking the requested action.
285.       (Part XXVI, §279 -
2012/PAR/0583) The Parliament calls, therefore, on the Commission and
the EEAS to see if the "more for more" principle regarding the
implementation of the PEGASE mechanism can be applied and to closely monitor
its disbursement; expects to be informed on possible progress made.
Commission's
response:
As per the
request on conditionality, the Commission and the EEAS consider that the
"more for more" principle is not applicable to Palestine. Reforms are
encouraged through policy dialogue, which has helped building a close and
trustful relationship between the Palestinian Authority, the EU and other
donors.
Although
some governance areas still need improvement and democratic elections could not
be held since 2006, the process of state-building has made remarkable
progresses as stated by the 2010 assessment of the World Bank, the
International Monetary Fund and the United Nations (UN). In 2011, the Ad Hoc
Liaison Committee reconfirmed that assessment of the state readiness of the PA,
proving that the approach adopted by the international community, among which
the EU is the largest and most reliable donor, was effective and efficient in
promoting reforms in the direction of state-building.
286.       (Part XXVI, §280 -
2012/PAR/0584) The Parliament calls on the Commission and the EEAS to
engage with the Palestinian Authority without delay to address these structural
issues [reform the civil service and pension systems], and to report regularly
to Parliament and the Council on the state of play.
Commission's
response:
The
comment under this paragraph referred in particular to the issue of the civil
servants not working/prevented from working in Gaza. 
The
decision to continue considering PA civil servants in the Gaza strip as
eligible for PEGASE DFS was a conscious one, based on the political need to
continue supporting the PA's presence there; however the Commission and the
EEAS had already agreed to take into consideration this request by finding a
solution with the Palestinian Authority. The discussions at local level are now
shifting towards the modalities for reintegration of the civil servants. To
note, however that the situation on the ground is changing, due to the
reconciliation process between Hamas and Fatah, which has led to the formation
of a Technical Unity Government on 2 June 2014.
287.       (Part XXVI, §281 -
2012/PAR/0585) The Parliament requests that the Commission ensures that
funding is only made available based on end beneficiaries from the agreed list
of persons.
Commission's
response:
The Court
of Auditors affirmed that a robust control mechanism of ex-ante and ex-post
external audits on the list of beneficiaries is already in place. The Court
found no evidence of misuse of funds or of possible diversion of funds to
non-agreed beneficiaries.
288.       (Part XXVI, §284 -
2012/PAR/0586) The Parliament urges the Commission and the EEAS to
raise the issue concerning the necessity to establish a robust internal
controlling mechanism to prevent any possible diversion of any public funding
from its own budget or the PEGASE DFS to any physical or legal person
representing or associated with Hamas without delay.
Commission's
response:
The
Commission will not be taking the requested action, since it has already
established a robust internal verification system, already in place (notably
checking each beneficiary, at each payment against the international sanctions
list). The request does not take into account the content of the Court of
Auditors' report and in particular the effectiveness of the current ex-ante and
ex-post external audits to which the PEGASE system is subject, recognised as
robust by the Court.
289.       (Part XXVI, §286 -
2012/PAR/0587) The Parliament calls on the Commission and the EEAS to
continue engaging with the government of Israel on these issues and to keep
reminding it of its obligations as the occupying power under the international
law.
EEAS's response:
Done
through political dialogues in 2014
290.       (Part XXVI, §287 -
2012/PAR/0588) The Parliament calls on the Commission and the EEAS to
fully take into consideration the Court of Auditors' findings and conclusions
and to fully implement its recommendations when reviewing the PEGASE DFS
mechanism in the future.
Commission's
response:
The
Commission and EEAS have expressed their disagreement with only one
recommendation from the Court of Auditors concerning conditionality and the
reasons for such rejection have been extensively explained. All other
recommendations from the Court, even when partially accepted, have been taken
into consideration (and for most of them anticipated) for the revision of the
PEGASE mechanism.
The two
recommendations requiring immediate action, namely the one on competitive
tendering (see reply to 2012/PAR/0580) and the one on Gaza non-workers (see
reply to 2012/PAR/0584) , were addressed in a timely manner.
Other
recommendations require a longer process of revision of the PEGASE mechanism, but
are equally being taken into account.
The policy
dialogue accompanying the PEGASE Direct Financial Support implementation takes
into consideration political events on the ground and other recommendations
such as those stemming from the external evaluation of PEGASE DFS. An
evaluation of Pegase DFS on the period 2011-2013 is currently going-on and will
also feed the on-going review of the mechanism.
Eighth, ninth
and tenth European Development Funds
291.       (EDF §3 - 2012/PAR/0589) The
Parliament calls on the Commission to provide an overview of the 30 largest and
30 smallest projects being implemented by NGOs using EDF funding, and an
overview of how much of their own funding the organisations have invested in
each of these projects.
Commission's
response:
The
Commission has collected the information requested. The lists of the 30 largest
and smallest projects implemented by NGOs using EDF funding are ready and due
to be provided to the European Parliament after the summer break.
292.       (EDF §5 - 2012/PAR/0590) The
Parliament calls on the Commission to apply the EDFs' financial regulations'
provisions on interest relating to larger pre-financing payments and to closely
examine the situation in the delegations to draw up a clear inventory of
contracts with open pre-financings.
Commission's
response:
The
Commission acknowledges the fact that the specific rules on interest income generated
from pre-financings, paid of more than € 750.000, for which annual recovery is
foreseen in the Financial Regulation, were not always strictly followed by the
sub-delegated authorising officers.
However,
instructions have been issued, and the amount recorded as interest on
Pre-financing increased by 300% in 2013 compared to 2012, from 1.3 MEUR in 2012
to 4.7 MEUR in 2013; this fact outlines the greater awareness of sub-delegated
authorising officers due to training sessions and reminders sent from HQ. For
2013, the estimated amount not yet recovered is estimated at less than 1 MEUR.
Some other mitigating facts:
a. An
analysis shows that around 50% of the contracts have no interest, which is in
line with previous analysis performed by DG DEVCO and the ECA. Thus, the
potential number of contracts with interest can be considered very limited
compared to the total population.
b. The
same analysis shows that in many cases the amount of interests that should be
recovered yearly is very limited, thus many Authorising Officers prefer to let
common sense prevail above the strict application of the FR on annual recovery
and wait until the project closure in order to recover or net-off the interest.

c. The new
FR for the future 11th European Development Fund cancels the application of
this provision: interests are not anymore due for pre-financings (like it is
already the case for the General Budget).
293.       (EDF §7 - 2012/PAR/0591) The
Parliament strongly calls on the Commission to undertake further efforts and to
continuously follow this issue [shortcomings in its information system] at all
operational levels, EuropeAid's Headquarters and Union delegations.
Commission's
response:
The
Commission will not be taking the requested action. The reason for this is that
the request of the European Parliament is too vague. It is not specific either
("shortcomings in its information systems") so that the Commission
cannot assess whether it concerns the quality of DG DEVCO's data, the adequate
support of DEVCO's processes by information systems, or the performance of
DEVCO's systems.
294.       (EDF §14 - 2012/PAR/0592) The
Parliament calls upon the Commission to further ensure follow-up and
implementation of recommendations entailed in the Court of Auditors' reports
for 2011 and 2012.
Commission's
response:
The
requested action has been taken.
As
regularly done, the Commission closely monitors the implementation of the Court
of Auditors' recommendations, ensuring that any recommendation is implemented
within a two-year time frame from its acceptance.
295.       (EDF §18 - 2012/PAR/0593) The
Parliament calls on the Commission to review the contracts with external
auditors whose audit reports provided to EuropeAid or to Union delegations have
proven not to conform to professional auditing requirements or provisions of
contracts.
Commission's
response:
The
Commission is taking the requested action.
It
acknowledges that some audits/expenditure verifications reports provided to
EuropeAid or to the EU Delegations are not at the expected level of quality.
However, DG DEVCO is currently developing a quality review tool - i.e. quality
review grids - to assess the quality of audit and verification reports. This
tool is planned to be finalised and implemented in early 2015. The tool will
also address the possible financial consequences for service providers which
provide reports of insufficient quality.
296.       (EDF §19 - 2012/PAR/0594) The
Parliament Calls on EuropeAid and Union delegations to focus more on the
follow-up of external audits and expenditure verification reports, especially
when the recovery of ineligible amounts is at stake.
Commission's
response:
The
Commission is taking the requested action, setting up an IT tool to better
follow-up external audits/expenditure verification reports and ensure that
recoveries are performed when necessary.
297.       (EDF §20 - 2012/PAR/0595) The
Parliament calls on EuropeAid to remedy to this issue without delay [ongoing
backlog due to late clearances and contract closures].
Commission's
response:
EuropeAid
has launched in 2013 an extensive campaign in order to sensitize the
Authorizing Officers to the necessity to close the expired contracts. The
actions already taken by the Commission are the following:
- Further
tools have been developed (monitoring reports in DWH) in order to facilitate
the timely follow-up of the closure and ensure timely clearance;
- key
Performance Indicators have been created (e.g. for expired contracts, old
prefinancing, monitoring of old RAL);
- an
annual follow-up of old pre-financings and contract closures is included in the
annual accounting work programme;
- the
checklists have been updated in order to improve ex-ante checks.
298.       (EDF §21 - 2012/PAR/0596) The
Parliament calls on the Commission to continue its efforts to strengthen its
current control systems, in particular to ensure a better business continuity
and reliable document management as required by internal control standards, and
to report annually to Parliament on the corrective actions implemented.
Commission's
response:
The
requested action has been taken.
All audits
carried out so far by the Court of Auditors have come to the conclusion that
the design of DG DEVCO's internal control system is correct. Nevertheless,
weaknesses remains in its implementation. In order to address and correct these
weaknesses, DG DEVCO set up a specific Action Plan in 2013, made up of 8 main
axes and 23 short-term and permanent corrective actions, including as regards
document management by both the Commission staff and the beneficiaries. DG
DEVCO is monitoring closely and reporting regularly on the progress in the
implementation of the actions taken, notably through a comprehensive follow-up
report to be provided at the end of each year.
299.       (EDF §22 - 2012/PAR/0597) The
Parliament calls on the Commission to double efforts to develop and launch the
CRIS-related audit module, and in particular the follow-up of all audit
reports, in the immediate future.
Commission's
response:
The
Commission is taking the requested action: the new CRIS-related audit module is
currently under development and scheduled to be in place by the 2nd quarter of
2015.
300.       (EDF §23 - 2012/PAR/0598) The
Parliament encourages the improved use of risk assessment in the framework of
the follow-up of the Union delegation’s portfolio of projects.
Commission's
response:
The
Commission will introduce the use of risk assessment in the framework of the
follow-up of EU Delegations' projects portfolios, as well as Headquarters', as
part of the current reform of monitoring of its development cooperation
projects and programmes.
301.       (EDF §25 - 2012/PAR/0599) The
Parliament calls on the Commission to reinforce efforts to better analyse and document
the main types of errors and to reduce the residual error rate (RER) in coming
years.
Commission's
response:
The
requested action has been taken.
An Action
Plan to correct the weaknesses in DG DEVCO internal control system was drawn up
following the reservation in DEVCO 2012 Annual Activity Report and endorsed by
Management in May 2013. As the residual error rate for 2013 is above the
established materiality threshold again, a new reservation had to be issued in
the 2013 AAR. The 2013 RER study having revealed that the typology of the
errors is similar to the one pointed out in the 2012 study, but that recurrent
errors linked to the beneficiaries and the International Organisations still
account for a significant part of the error rate, it has been decided in a
Management Meeting in May 2014 that the Action Plan is still fully applicable,
but additional Ad Hoc measures have been agreed so as to address new issues
found in the RER study and the Court of Auditors' 2013 DAS (in addition to the
actions already engaged) focusing specifically on the beneficiaries and the
International Organisations, and notably to tackle the issue of the absence of
supporting documentation.
302.       (EDF §27 - 2012/PAR/0600) The
Parliament calls upon the Commission and the Court of Auditors to use a
comparable audit approach in future years for the sake of a continuous and
comparable assessment within the discharge procedure.
Commission's
response:
DG DEVCO
has already carried out a major revision of the ToR and introduced a
materiality concept for audits. All audits and verifications focus on
compliance (with contractual conditions) so that the Commission's audit
approach is comparable to the one of the Court of Auditors on these fundamental
issues.
What is
not comparable is the scope or time period covered. The Court has its basic
concept of annuality and focuses on payments/transactions in a given year. The
audits and verifications performed by the Commission focus on entire
project/contractual periods which often run over the calendar year or even
years (for multi-annual projects).
303.       (EDF §28 - 2012/PAR/0601) The
Parliament calls on the Commission to further reinforce its control mechanisms
and training policies in order to prevent the reoccurrence of those weaknesses
in the future [the lack of (adequate) supporting documents and the incorrect
application of the procurement procedures by contractors and beneficiaries].
Commission's
response:
The weaknesses
identified in this finding, lack of supporting documents and the incorrect
application of procurement procedures, have been reinforced in the training
sessions given by DEVCO to its staff. Emphasis on these matters has also been
put in the revisions of DG DEVCO Practical Guide (PRAG). Concrete measures were
put in place in 2013 aimed at better document management and storage by
partners and beneficiaries, apart from the training for delegations already
mentioned. 
Since
grant contracts are the ones most exposed to risks in terms of document
management, the following actions taken have to be mentioned:
1.
Obligation to declare the precise location of the supporting documents
introduced in art.16.7 of the 2013 version of the General Conditions.
2. Specific
section introduced in the 2013 version of the narrative report where to declare
the location of the supporting documents (Annex IV template).
3. Link in
the newly developed implementation manual for grant contracts to the financial
toolkit, where additional information on document management is available.
4. The
template for Guidelines to be used in Call for Proposals includes now a link to
the implementation manual and to the toolkit as well. 
Concerning
Programme Estimates, where the risk of document management is also significant,
the 2013 version of the Practical Guide on PEs already contains clear
instructions (Chapter 4.1.9) on this subject.
All the
above, makes DG DEVCO consider that the request has been implemented.
304.       (EDF §29 - 2012/PAR/0602) The
Parliament calls on EuropeAid to continue developing the appropriate tools and
actions in order to improve the overall effectiveness of the control pyramid
within EuropeAid's Headquarters and Union delegations through targeted
awareness raising activities or the increased use of the financial management
toolkit by staff and beneficiaries.
Commission's
response:
The
requested action has been taken.
This
request is already addressed through the on-going implementation of the Action
Plan intended to correct the weaknesses in DG DEVCO internal control system,
notably with the following measures:
-
Awareness-raising on the most common types of errors and the ways to avoid them
has been actively initiated at both EU Delegations and HQ levels through
meetings gathering all the Heads of Finance, Contracts and Audit sections in
Delegations (in every regions) and units in Brussels. A second
awareness-raising cycle has already started through further regional meetings
and discussions (due to take place every year on a systematic basis), and
through specific fora such as seminars involving Heads of Delegations,
Operational or FCA sections;
-two
manuals have been published in 2013: on the management of services contracts
and on the management of grants contracts. These manuals are based on
frequently-asked-questions (FAQs) and complemented with practical examples of
recurrent issues stemming from the Court of Auditors' DAS (Statement of
Assurance) reports and the Residual Error Rate (RER) studies. Both manuals are
published as a chapter of the DG DEVCO E-Companion;
- as
regards the Financial Management Toolkit, it will be inserted in June 2014 as
an annex into the newest version of the E-Companion, which will make it
possible for external users to better access it. The Toolkit is also constantly
referred to in every course and training delivered to the HQ and Delegations
staff, with an emphasis on the necessity to remind the beneficiaries to use it.
Further measures are also being planned to raise its knowledge and promote its
use, especially by the beneficiaries: some Delegations already organise
information sessions for beneficiaries and reflection is on-going to make this
more systematic in order to encourage the use of the Toolkit.
305.       (EDF §31 - 2012/PAR/0603) The
Parliament calls on EuropeAid and the European External Action Service (EEAS)
to reinforce the supervision of the Heads of Union delegations in their
capacity as authorising officers by sub-delegation for the Commission with a
view to increasing their accountability in the context of the establishment of
the annual activity report.
Commission's
response:
The
revised version of the External Assistance Monitoring Report (EAMR) which
includes a statement of assurance signed by the Heads of Delegations was put in
production on 01/01/2014 for reporting on year 2013. The main objective of this
revised version is to increase the accountability of the Heads of Delegations
and to assist the Heads of Union Delegations in his/her judgement towards
assurance. This revised EAMR includes a new set of 26 Key Performance
Indicators (KPI) for which annual targets or benchmarks were fixed by DG DEVCO.
Delegations' performance compared to benchmarks are automatically assessed
through a traffic light system. The 26 KPIs are organised around 3 main pillars
on which the Heads of Union Delegations have to build their assurance: sound
financial management and effective use of EC funds, efficiency of the internal
control system, efficiency of the audit system. Main imbalances compared to
targets have to be explained by the HOD in his/her EAMR and mitigating actions
have to be presented.
306.       (EDF §33 - 2012/PAR/0604) The
Parliament reiterates its call to the Commission to further develop both its
whistleblowing policy, notably in Union delegations, and its anti-fraud
strategy in order to detect double funding activities.
Commission's
response:
In
December 2012, the Commission has issued whistleblowing guidelines (SEC(2012)
679). It considers it too early to evaluate the effect of the whistleblowing
guidelines on the number of reported cases, as they were only issued a little
over 18 months ago. The guidelines provide for a review of their impact after a
period of three years, to be able to gather reliable and statistically relevant
information. The statistics on reported cases are kept by OLAF.
Under the
Commission Anti-Fraud Strategy, OLAF has undertaken to share with Commission
departments and other institutions involved in the management of EU funds the
lessons learned from the results of investigative activities and fraud risk
analyses. In particular, OLAF has elaborated a casebook of investigations in
the field of external aid, which presents an analysis of fraud patterns, modi
operandi, vulnerabilities and red flags. This analysis is meant to help DGs
enhance their fraud prevention capacities, including with respect to double
funding. In addition, the Commission Services in external relations have
adopted anti-fraud strategies with action plans attached. In this framework,
specific actions aimed at mitigating fraud risks identified in specific
priority areas have been proposed.
307.       (EDF §34 - 2012/PAR/0605) The
Parliament asks the Commission to take into account the latest Union
developments on beneficial ownership, as discussed in the forthcoming revised
directive on the prevention of the use of the financial system for the purposes
of money laundering and terrorist financing; asks the Commission to report back
on this in its annual activity report.
Commission's
response:
The
Commission agrees that achieving progress on beneficial ownership should be
high priority in the context of AML negotiations: concretely the Commission is
working towards agreement on the Directive which would include measures to
enhance transparency on beneficial ownership of legal and corporate entities,
trusts and similar arrangements - expected by the end of 2014. The Commission
will report back on progress in its annual activity report.
308.       (EDF §35 - 2012/PAR/0606) The
Parliament calls upon the Commission to critically assess its rules for
deviations from procurement procedures and to report back on this in its annual
report.
Commission's
response:
The
assessment of the rules for deviations, prior approvals, exceptions and
non-compliant events is ongoing and will be completed before the end of 2014
when the new rules are published. DG DEVCO will report on the revision of these
rules in the 2014 Annual Activity Report.
309.       (EDF §40 - 2012/PAR/0607) The
Parliament calls on the Commission to put a strong emphasis on the judiciary
reform programmes.
Commission's
response:
The
requested action has been taken. Support to the justice sector and justice
sector reform is one of the principle avenues for promoting democratic
governance, the rule of law, citizen security, gender equality and respect for
human rights, and thereby socio-economic development. For this reason, the
European Union has been working over the past few decades to implement justice
sector interventions, being a major donor in this area. With the recent policy
documents, further emphasis is put on working on these areas in development
cooperation and in the pre-enlargement context, which is also reflected e.g. in
the current programming for 2014-2020 and the Budget Support operations in line
with the revised guidance. Detailed information on EU support to justice and
rule of law is available on the EuropeAid website (JSSR Evaluation and
Reference Document no. 15).
310.       (EDF §41 - 2012/PAR/0608) The
Parliament requests a report on the risk strategy and response implemented
within the framework of the next discharge procedure.
Commission's
response:
The
Commission will take the requested action within the framework of the next
discharge exercise.
311.       (EDF §43 - 2012/PAR/0609) The
Parliament asks the Commission to report on the first results or lessons
learned [of the regional hubs in partner countries initiative] to the
Parliament in the next discharge.
Commission's
response:
The
Commission will take the requested action within the framework of the next
discharge exercise.
312.       (EDF §47 - 2012/PAR/0610) The
Parliament calls on the Commission to further investigate the causes of these
deficiencies [of evaluated projects in the Pacific region] and to enhance
in-country capacity in order to improve project design and implementation.
Commission's
response:
The
Commission is taking the requested action.
It will
complete, in 2014, two major studies providing strategic as well as operational
feedback of its management of development assistance in the Pacific region. One
study covers the independent monitoring of results from virtually all programs
in the Pacific under the 8th, 9th and 10th EDF, from 2000 to 2013. Furthermore,
in the autumn 2014 EuropeAid will publish an evaluation of results and impact
of EU regional cooperation in the Pacific over the period 2006-2012. Findings
indicate that performance of projects in the Pacific region is above average
when compared to other ACP regions. Availability of the findings and
recommendations of these reports at the beginning of the new programming period
2014-20, along with the experience and lessons learned in sectors and
individual projects, will enable the Commission to apply them in the
preparation and negotiation of new 11th EDF actions with a view to continuously
improving EU aid and development effectiveness. This also transpires in the
11th EDF programming documents which are being finalized and which put not only
more emphasis on regional programmes but also on complementarity between
national and regional programmes and actions, concentrate on fewer intervention
areas (1 focal sector in the majority of SIDS), seek donor coordination as well
as alignment to beneficiaries' priorities and country systems. Related to the
latter are, for instance, the Budget Support Guidelines issued in 2012 which
take particular notion of Small Island Developing States (SIDS) and Overseas
Countries and Territories (OCTs) and consider their specific challenges in
terms of vulnerability, volatility, natural resources management and (weak)
institutional capacity.
313.       (EDF §49 - 2012/PAR/0611) The
Parliament calls on the Commission to ensure that the disbursement of funds
through budget support is withheld, reduced or cancelled when clear and initial
objectives and commitments are not achieved and when the Union’s political and
financial interests are at stake.
Commission's
response:
In the
framework of the new approach to Budget Support, new guidelines with
strengthened assessments of the four eligibility criteria have been developed
and entered fully into force on the 1st January 2013. The strengthened
assessment of eligibility criteria as well as the disbursement file for each
proposed payment justify the amounts to be paid and to be withheld in detail.
The internal governance of Budget Support was further boosted by the
establishment of the Budget Support Steering Group, chaired by DG DEVCO and
composed of Management from DG DEVCO, EEAS and ECFIN. The Budget Support
Steering Committee considers, inter alia, political risks and gives strategic
guidance including in matters of fundamental values.
314.       (EDF §51 - 2012/PAR/0612) The
Parliament calls on the Commission and the EEAS, in coordination with other
development partners, including Member States, and with a view to programming
for the 11th EDF and the design of future Union programmes, to pay increased attention
to ensuring an appropriate balance of aid between all provinces [of the
Democratic Republic of the Congo]; (...) calls for combined support at a
central level for programmes at provincial level that link political and
territorial decentralisation with improved natural resource management
strategies and infrastructure rehabilitation and development.
Commission's
response:
See reply
to recommendation 1 (a) of the Special Report 9/2013.
While
sharing the general preoccupations expressed by the Court, the Commission and
the EEAS do not accept the recommendation of the Court and will not be taking
the requested action. The reason for this is that: 
(i) The
Commission will continue to aim at achieving an appropriate balance of aid
between all provinces including the poor ones in full coordination with other
donors and taking into consideration that the poorest DRC provinces are also
the least populated. 
(ii) The
Commission will continue to involve local actors in the implementation of its
projects, and within the limit of their capacity. The Commission will also
support their capacity building. 
(iii) The
Commission will continue to support the improved management of natural
resources provided that it is confirmed as a sector of the 11th EDF and in the
context of work sharing arrangements with other donors.
315.       (EDF §52 - 2012/PAR/0613) The
Parliament calls on the Commission and the EEAS to place greater emphasis, in
its dialogue with the Democratic Republic of the Congo (DRC) government, on the
fact that democratic elections are a key component of governance; calls on the
Commission and the EEAS to carefully assess all risks to ensure that Union
programmes in this area do not support regime entrenchment.
EEAS's response:
The EEAS
and Commission stress in their dialogue with the DRC authorities the importance
of moving forwards with a credible electoral cycle in DRC, in line with
constitutional obligations. The EEAS and the Commission take note of the
preliminary conclusions of the electoral follow-up mission to DRC that took
place in June 2014. Both services underline the need for a comprehensive
calendar, encompassing the whole electoral cycle and with a credible budget.
316.       (EDF §53 - 2012/PAR/0614) The
Parliament asks the Commission and the EEAS to promote improved DRC government
accountability through increased support to strengthen the capacity of national
oversight institutions, in particular the specialised committees of the
National Assembly and the supreme audit institution.
Commission's
response:
See reply
to recommendation 1 (c) of the Special Report 9/2013.
The
requested action has been taken.
The
Commission and the EEAS will continue to strengthen and possibly increase the
capacity of national oversight institutions, in the context of work sharing
arrangements with other donors. Special attention is given to the improvement
of public finance management systems, especially in our main focal sectors, in
the 11th European Development Fund (EDF).
317.       (EDF §55 - 2012/PAR/0615) The
Parliament calls on the Commission to assess the specific shortcomings
encountered during the preparation and implementation of those two programmes
[REJUSCO and PAG] in order to develop more sustainable programmes on the
judicial reform with better-tailored objectives under the 11th EDF.
Commission's
response:
The
requested action has been taken.
Final
project evaluations (including Result-Oriented Monitoring - ROM - evaluations)
are systematically performed. Lessons learnt from these documents are taken
into consideration when preparing future projects in DR Congo.
318.       (EDF §56 - 2012/PAR/0616) The
Parliament calls for the establishment of measures to prevent or mitigate risks
and to clearly define the course of action to be followed if risks become a
reality.
Commission's
response:
See reply
to recommendation 2 (b) of the Special Report 9/2013.
The
Commission and the EEAS do not accept this part of the recommendation. 
The course
of action to be followed if risks of engagement become reality will be defined
taking into account the overall political situation prevailing at the time and
in coordination with other donors.
319.       (EDF §60 - 2012/PAR/0617) The
Parliament invites the Commission to take a more active leadership role towards
Member States by encouraging a coordinated policy dialogue and by increasing
Union leverage over the DRC government.
Commission's
response:
See reply
to recommendation 4 (c) of the Special Report 9/2013.
The
Commission and the EEAS cannot accept the recommendation. 
The
Commission and the EEAS are fully engaged in encouraging coordinated EU policy
dialogue. The EU leverage over the DRC is not just a matter of development aid,
but rather a function of the comprehensive relation between the EU and the
partner country.
320.       (EDF §63 - 2012/PAR/0618) The
Parliament asks the Commission to send the State Building Contract to
Parliament as soon as possible, along with all the assessments upon which this
contract is based; calls on the Commission to clarify in which way this
contract is in line with the abovementioned Communication of the Commission.
Commission's
response:
The letter
sent to Mr THEURER, dated 31/03/2014 (Ref.: Ares(2014)996606), included the
signed programme document, the risk assessment upon which the decision was
based to provide Budget Support to Haiti and clarified the way this contract is
in line with the new Communication on Budget Support of the Commission.
321.       (EDF §64 - 2012/PAR/0619) The
Parliament requests that the Commission explains to Parliament what performance
targets have been set for the Haitian government in return for budget support
and the modalities for the assessment of these targets.
Commission's
response:
The
referenced letter sent to Mr THEURER, dated 31/03/2014 (Ref.:
Ares(2014)996606), included the signed programme document. It details the
general and specific performance targets that have been set for the Haitian
Government in return for Budget Support and outlines the modalities for
assessment of these targets.
322.       (EDF §65 - 2012/PAR/0620) The
Parliament urges the Commission to ensure that, as announced, the impact
evaluation is completed by April 2014, as provided for in paragraphs 62 and 63
of Parliament's resolution relating to the 2011 discharge procedure and is
transmitted to Parliament.
Commission's
response:
The
Commission is pleased to reconfirm that the impact evaluation is currently
ongoing but regrets to inform the European Parliament that given to factors
outside its control, the impact evaluation could only be completed by September
2014 and not by April 2014.
The
Commission confirms that the final study will be published and shared, as per
usual practice.
323.       (EDF §68 - 2012/PAR/0621) The
Parliament requests that the Commission reports on how Haitian Government
reports on and accounts for Union funds received has developed since the CONT
delegation found control systems inadequate and accounting for Union spending
on an unacceptable level.
Commission's
response:
The
Commission is pleased to report on Union funds disbursed in the benefit of
Haiti within the existing reporting procedures. 
The
Commission however will not be taking the requested action and rejects the
statement that control systems are inadequate and accounting for Union funding
is at an unacceptable level. The reason for this is that Budget Support is a
contract implemented through legal financing agreements which provide funds to
partner countries upon the achievement of tangible and demanding results and
reforms. These results are expressed in the form of four general eligibility
conditions and a set of specific performance indicators. Policy dialogue and
technical assistance precede and accompany the funds. The EU is thus disbursing
funds to the national treasury account of the Haitian Government only after
verification that these eligibility conditions have been fulfilled.  
Accordingly,
the Haitian government has made satisfactory progress in improving public
finance management and ensuring transparency and oversight of the budget. As
regards internal control, specific improvements 
include
among others, reinforcement of the internal audit system for expenditure
control, reinforcement of the Fight Against Corruption Unit and increase in
corruption cases pursued, and strengthening of the National Procurement Agency
and implementation of the public procurement system. Concerning budget
transparency, all external funds are included in the national budget. In
addition, when EU funds are transferred to the treasury account after
fulfilment of the performance criteria has been established, the Commission
verifies that the relevant Treasury Account has been credited by the amount
equivalent to the foreign exchange transfer at the appropriate day’s exchange
rate.
324.       (EDF §69 - 2012/PAR/0622) The
Parliament urges the Commission to substantially speed-up the process of
improving the monitoring and evaluation of Union funded projects and programmes
and of making the resulting information publicly accessible in a user-friendly
way.
Commission's
response:
The
Commission will issue general instructions for improved monitoring, reporting
and evaluation of Union funded projects and programmes shortly. It is also working
on Information management to facilitate access to related information in a
user-friendly way, but is not in a position to commit itself to a specific
deadline.
As regards
more particularly Union aid to Haiti, the Commission reports on its programmes through
its website and annual reporting. In addition, the Commission fully supports
and therefore reports through Haitian Government-led initiatives on publishing
external aid. An example of such recently-launched initiative by the Ministry
of Planning and Cooperation is available on: https://haiti.ampsite.net/.
325.       (EDF §76 - 2012/PAR/0623) The
Parliament encourages the Commission to resolve its disagreements [with the
OECD Development Assistance Committee's secretariat about the Official
Development Assistance (ODA) eligibility of European Investment Bank (EIB)
loans] in an orderly manner as this is important to ensure sound statistical
data and comparable benchmarks of financial contributions that are considered to
contribute towards development goals.
Commission's
response:
As a
result of long and intense discussions between the Commission and the OECD-DAC
Secretariat, the eligibility of EIB loans as ODA has been recognized for 2011
loans after DAC agreement of 8 April 2013 (DAC/CHAIR(2013)2) thereby bringing
to an end years of inconsistent practices regarding the treatment of the EU in
OECD/DAC statistics. The last OECD Development Cooperation Report already
includes an ODA amount of € 3,5 billion of EIB loans to developing countries in
2011 (see item EU institutions in its Statistical Annex - page 260):
http://www.oecd-ilibrary.org/development/development-co-operation-report-2013_dcr-2013-en.
The Commission
will continue working with the OECD-DAC Secretariat in the coming months to
ensure the recognition as ODA of EIB loans for 2012, 2013 and 2014. In
parallel, the OECD/DAC has started to discuss the modernisation of the external
finance measurement framework post-2015, including the definition of
concessional in character. The Commission is actively engaging in that
discussion.
326.       (EDF §78 - 2012/PAR/0624) The
Parliament asks the Commission to verify, when financing an NGO project, which
part of the financing comes from the organisation's own private funding and
which part of the financing from government funding, be it national or
European; asks the Commission to publish a report each year about its findings.
Commission's
response:
Under the
European Development Fund (EDF), in most cases, grants to NGOs are awarded as
result of Calls for Proposals managed by the beneficiary countries. Under
decentralised management with ex-ante controls, the European Commission
endorses the award decisions prior to the signature of the contracts. The part
of the grant that will be financed by the Commission is stated in the
application form and well defined at the time of the signature (both in % and
absolute terms compared to the total amount foreseen as cost of the action).
The other sources of funding are also mentioned in the budget of the action. At
the end of the action, there is checked that the co-financing from other donors
took place, but not necessarily that the source matches fully what was
announced at the Call for Proposals phase. The stress is put on the fact that
the co-financing existed, rather than its composition or final source. It is
not uncommon that the sources change during the grant contract implementation.
The funding that the NGOs may get from other donors/sources does not have to be
necessarily earmarked for our projects. Following the origin of the
co-financing at contract level would have little use. The contracts awarded are
published by the beneficiary countries in government websites. These contracts
are managed directly by the ACP States within programme estimates.
Given all
these reasons and the number of grant contracts signed every year in all the
ACP States, and given the role of the EC under decentralised management,
producing a report of the features above mentioned would prove not only very
cumbersome but also not cost-effective. Therefore, the Commission will not be
taking the requested action.
327.       (EDF §80 - 2012/PAR/0625) The
Parliament calls for an end to be brought to the Tripartite Agreement during
the October 2015 revision and include the investment facility in the normal
discharge procedure.
Commission's
response:
The EIB
manages the Cotonou Investment Facility, which is financed directly by EU
Member States and it is thus not covered by the Court's Statement of Assurance
or the European Parliament's discharge procedure. The Internal Agreement on the
financing of European Union aid in accordance with the ACP-EU Partnership
Agreement (11th EDF), stipulates that operations financed from the EDF
resources managed by the EIB shall be subject to the control and discharge
procedure laid down by the Statute of the EIB for all its operations.
Nevertheless,
the European Investment Bank presents every year to the EP an Annual Report for
the Investment Facility that gives details about the achievements of the
Investment Facility and examples of development impact.
328.       (EDF §88 - 2012/PAR/0626) The
Parliament asks the Commission to consider the development impact of the
Investment Facility in its annual report to Parliament and Council on the
Union's development and external assistance policies and their implementation
and the annual activity report.
Commission's
response:
This
request is partially accepted by the Commission.
The EIB
manages the Investment Facility which is financed directly by Member States and
it is thus not covered by the Court's Statement of Assurance or the European
Parliament's discharge procedure. The DEVCO Annual Activity Report cannot
report on the Investment Facility, since it is not a "DEVCO activity"
in budgetary terms and the DEVCO Director General is not the Authorising
Officer.
Nevertheless,
the European Investment Bank presents every year to the EP an Annual Report for
the Investment Facility that gives details about the achievements of the
Investment Facility and examples of development impact. The Commission will
take into account this report and will look at ways to include examples of
development impact of the Investment Facility, in particular for projects
co-funded by the IF together with EDF funds managed by the Commission, in
future Annual Reports starting with the report covering implementation from
2014.
329.       (EDF §89 - 2012/PAR/0627) The
Parliament calls on the Commission to provide a fully-fledged report on the
impact and results of the implementation of financial facilities in the context
of the platform for cooperation on blending and development policies.
Commission's
response:
As regards
DEVCO reporting on the potential impact and results of the facilities, DG DEVCO
would like to stress that:
1/ The two
oldest (2007 and 2008) and most active facilities (Neighbourhood Investment
Facility and the EU-Africa Infrastructure Trust Fund) have been subject to a
mid-term evaluation, the reports are publicly available. Other mid-term reviews
are planned for the other facilities which started later; 
2/ in the
context of the Platform, an annual report will be sent to the Parliament and
Council in 2014: among others, it will include the main conclusions from the
workstream on “Assess and compare the performance of different blending
mechanisms”, which built on the results of the mid-term evaluations of the
Neighbourhood Investment Facility and the EU-Africa Infrastructure Trust Fund.
Performance,
financial management and control of EU agencies
330.       (Agencies §4 - 2012/PAR/0629)
The Parliament welcomes the access to services provided by the
Commission and believes that it can be further improved.
Commission's
response:
The
Commission already provides access to agencies to a number of its services. It
will continue its assessment of the possibilities to obtain further
rationalisation and synergies, including from sharing of services with the
agencies and between the agencies.
331.       (Agencies §7 -
2012/PAR/0630) The Parliament reiterates its call on the Commission to
encourage the agencies to use the simplification option as regards recruitment
procedures where the standard procedure is designed for a larger scale
organisation and presents an excessive burden for the agencies.
Commission's
response:
The
Commission plans to address the issue of recruiting staff in agencies in 2014.
The Commission intends to adapt the section on staff recruitment in the new
version of the Guidelines and, more importantly, to finalise model General
implementing provisions for the use of Temporary Staff under article 2f CEOS.
The difficulties met in the past and the new reality with the creation of a new
category of temporary agents only employed in agencies will be taken into
account. Agencies are being regularly consulted and associated to the drafting
of these new Guidelines. To this end, the Commission and the agencies have
established a "permanent" working group.
332.       (Agencies §13 -
2012/PAR/0631) The Parliament calls on the Commission to continue its
efforts and to report on its progress on an annual basis, inter alia, to report
on the progress as regards completion of actions, the implementation of the
completed actions and their outcomes and effectiveness and to provide a more
detailed breakdown as regards when and how the decentralised agencies have
contributed to those actions.
Commission's
response:
The
Commission committed in the Joint Statement "to inform the European
Parliament and the Council regularly, and for the first time by the end of
2013, about progress on the implementation of the roadmap". A first
progress report was presented by the Commission at the end of 2013. A second
progress report is planned for December 2014
333.       (Agencies §13b -
2012/PAR/0632) The Parliament requests that the Commission also include
an analysis on how the change of reporting requirements contributes to the
simplification and the reduction of the administrative burden.
Commission's
response:
Please
refer to reply to 2012/PAR/0631
334.       (Agencies §17 -
2012/PAR/0633) The Parliament believes that based on the model provided
by the Anti-Corruption report, the Commission should consider the possibility
of including the activity and performance of Union institutions and agencies in
the next annual report on corruption.
Commission's
response:
The
Commission published the first EU Anti-Corruption Report in February 2014.
Subsequent reports will follow every two years. The Commission considered
assessing in the first report the anti-corruption efforts of the EU's own
institutions. However, we realised that this is something we will have to
return to in later EU Anti-Corruption Reports – to be sure that the evaluation
is satisfactory and objective. The Commission is currently considering venues
for such an independent review of EU institutions. Synergy with the Council of
Europe's Group of States against Corruption (GRECO) is particularly important.
335.       (Agencies §18 -
2012/PAR/0634) The Parliament proposes the establishment of a working
group on this matter [the agencies’ way of reporting to the discharge
authority] to come forward with proposals for improving the reporting system,
both on the agencies’ and Parliament’s side.
Commission's
response:
A new
working group is not needed since reporting obligations have been streamlined
in the new Framework Financial Regulation of 30.9.2013 applicable to
decentralised agencies, and in in financial rules of each agency. From 2016
onto, agencies will provide a consolidated annual activity report which
includes comprehensive information on the implementation of its work programme,
budget, staff policy plan, its management and internal control systems.
336.       (Agencies §19 -
2012/PAR/0635) The Parliament requests to strengthen the reporting
system further in this respect [trend to focus reporting more on effectiveness
and results achieved ] to enhance the democratic accountability of the
agencies.
Commission's
response:
Reporting
obligations have been streamlined in the new Framework Financial Regulation of
30.9.2013 applicable to decentralised agencies, and in in financial rules of
each agency. From 2016 onto, agencies will provide a consolidated annual
activity report which includes comprehensive information on the implementation
of its work programme, budget, staff policy plan, its management and internal
control systems
337.       (Agencies § 23 -
2012/PAR/0636) The Parliament calls on the Commission to ensure that
consolidated reporting results in simplification and reduction of the
administrative burden.
Commission's
response:
Reporting
obligations have been streamlined in the revised Framework Financial Regulation
of 30.09.2013 applicable to decentralised agencies and in the financial rules
of each agency. New provisions on reporting apply from 1 January 2015 and
foresee that the agencies provide a consolidated annual activity report which
includes comprehensive information on the implementation of their work
programme, budget, staff policy plan and internal control systems.
338.       (Agencies §30 -
2012/PAR/0637) The Parliament is looking forward to the Commission’s
report on those aspects [plans to carry out further work in order to develop a
guide on internal planning and revenue forecasting] due in 2014.
Commission's
response:
The
Commission is taking the recommended action.
The report
will be finalised in course of 2014.
339.       (Agencies § 37 -
2012/PAR/0638) The Parliament notes that the Commission proposal
[Commission's proposal for a European agency for law enforcement and training
proposing to merge the European Police College (CEPOL) with Europol ] assured
neither the Parliament nor the Council of a merger or relocation of CEPOL to
the Hague; stresses that following this decision, the efficient functioning of
the agency must be ensured.
Commission's
response:
The
Commission's proposal aimed to bring together operational and training
functions to enable those functions to reinforce one another, thus
strengthening overall EU police cooperation. However, the EP and the MSs
rejected this proposal and, in the wake of the UK' decision to close the
Bramshill site, adopted a Regulation that established the seat of CEPOL in
Budapest. This initiative was opposed by the COM, in its negative Opinion of 16
January 2014.Despite this, in order to ensure further efficient functioning of
the Agency, following the UK's decision and the Member States Initiative, the
Commission will do its utmost to assist CEPOL's Director in: a) ensuring a
smooth relocation to Budapest by providing the Agency with the budget needed
for the move in addition to the contributions by the Member States and b)
motivating its staff to move with the Agency, by informing the agency that a
series of allowances can be granted to CEPOL's staff under the Staff
Regulations, in the context of staff mobility. At the same time, in order to
give CEPOL and its staff more certainty with regard to the Agency's future, the
Commission will soon propose a new legislative framework for CEPOL, as an
independent Agency, located in Budapest. The proposal for a Regulation will
also take into account the Agency's task of implementation and coordination of
the Law Enforcement Training Scheme (LETS).
340.       (Agencies §38 -
2012/PAR/0639) The Parliament welcomes the Commission’s intention to
obtain further synergies from the sharing of services between the agencies
themselves and from within the Commission and to carefully look into the matter
of unnecessary spending due to distant and multiple sites of location and is
looking forward to further proposals in that regard.
Commission's
response:
Please
refer to 2012/PAR/0629
341.       (Agencies §46 -
2012/PAR/0640) The Parliament reminds the Commission that the Financial
Regulation is not suited to agencies which generate surpluses; stresses that it
is essential to consider, as part of the revision, ways of resolving this
problem, e.g. by creating a limited reserve fund.
Commission's
response:
After
careful analysis, the Commission concluded that the creation of the reserve
fund is neither necessary, nor appropriate in the current context of budgetary
constraints. Therefore the revised Framework Financial Regulation (FFR) does
not foresee such a possibility. The European Parliament and the Council have
not raised objections to the Commission’s proposals and consequently the FFR
entered into force from 1st January 2014.
The
Commission considers that the current practice represents a sound and prudent
approach, in line with the necessity of a strict control of expenditure by the
Commission and the Budget Authority.
342.       (Agencies § 53 -
2012/PAR/0641) The Parliament is looking forward to receiving at the
beginning of 2014 the finalised document on new guidelines on tailored
performance indicators to assess the results achieved by directors of agencies.
Commission's
response:
In
accordance with the Roadmap on the follow-up to the Common Approach on EU
decentralised agencies (action no. 89), the Commission elaborated draft
guidelines on tailored performance indicators to assess the results achieved by
agencies' Executive Directors and sent the document to the agencies in July
2013, asking for their contribution. Consultation is in progress. The Commission
is planning to issue the guidelines by the end of 2014.
343.       (Agencies §75 -
2012/PAR/0642) The Parliament expects the Commission to perform a
continued assessment of the effects of the implemented guidelines and adjust
the guidelines accordingly as deemed appropriate by the results of that
assessment.
Commission's
response:
The
Commission considers it is too early to evaluate the effect of these
guidelines, as they were only issued half a year ago (i.e. December 2013). As
already stressed by the Commission itself in the guidelines, an adequate
balance between risks/benefits as regards the management of conflicts of
interest, on one hand, and the objective to obtain the best possible scientific
advice, on the other should be maintained. However, the Commission also
emphasises the fact that as the agencies are legally independent entities, they
alone are responsible for the way they handle the issue of conflicts of
interest in practice and notably, how they enforce and control that the key
principles in this domain are respected. As such, ultimately, agencies are
responsible for developing their own framework on conflicts of interest
(including on declarations of interest, identification of risk levels,
preventive and corrective actions), for its implementing, monitoring and
reporting.
344.       (Agencies §80 -
2012/PAR/0643) The Parliament expects the Commission guidelines to
address the situation [procedures for recruiting staff to the agencies have
posed a regular problem] in the future.
Commission's
response:
The
Commission plans to address the issue of recruiting staff in agencies in 2014.
The Commission intends to adapt the section on staff recruitment in the new
version of the Guidelines and, more importantly, to finalise model General
Implementing Provisions for the use of Temporary Staff under article 2f CEOS. 
The
difficulties met in the past and the new reality with the creation of a new
category of temporary agents only employed in agencies will be taken into
account. Agencies are being regularly consulted and associated to the drafting
of these new Guidelines. To this end, the Commission and the agencies have
established a permanent working group.
345.       (Agencies §81 -
2012/PAR/0644) The Parliament calls on the Commission to consult with
the agencies when developing its guidelines [including implementing rules on
the employment of temporary agents and contract agents] for them.
Commission's
response:
The
Commission plans to revise the Guidelines on the staff policy in decentralised
agencies and, more importantly, to finalise model General Implementing
Provisions for the use of Temporary Staff under article 2f CEOS in 2014.
Agencies are being regularly consulted and associated to the drafting of these
new Guidelines. To this end, the Commission and the agencies have established a
permanent working group.
346.       (Agencies §82 -
2012/PAR/0645) The Parliament calls on the agencies and on the
Commission to reach an agreement on the use of resources for handling
disciplinary proceedings.
Commission's
response:
The
Commission's Directorate-General for Human Resources and Security (DG HR) has
concluded Service Level Agreements with all executive agencies. These
agreements include arrangements for the Investigation and Disciplinary Office
of the Commission (IDOC, part of DG HR) to handle administrative inquiries and
disciplinary procedures for these agencies.
For decentralised
agencies, IDOC acts as a help-desk in individual cases, providing procedural
advice and models and templates for documenting the various procedures.
In order
to provide further assistance, IDOC is working with the coordinating agency to
set up an inter-agency pool of case handlers which would handle administrative
inquiries and disciplinary procedures for these agencies. These case handlers
would be trained by IDOC. The agencies have agreed to this proposal and the
steps are being taken to establish the common pool.
347.       (Agencies §83 -
2012/PAR/0646) The Parliament questions the reasons why the specific
Memorandum of Understanding between the ESAs and the Commission aimed at
ensuring the efficient establishment, implementation and monitoring of the
budget of the ESAs has not yet been established.
Commission's
response:
In 2012
the draft Memorandum of Understanding was prepared by the Commission (DG
MARKT). After consulting DG BUDG it was proposed to ESAs who refused to sign
the document considering the existing regulatory framework and working
arrangements sufficient for a good cooperation between ESAs and DG MARKT.
348.       (Agencies §84 -
2012/PAR/0647) The Parliament takes note of the Commission's intention
to augment transparency throughout the procedure, and to further clarify the
extent to which it has modified the agencies’ requests in the draft budget, and
the corresponding reasons as from the 2014 draft budget.
Commission's
response:
The
Commission has taken the recommended action.
The
Commission shares the importance that the Parliament attaches to having a full
picture of the resources and tasks of the agencies, as a basis for a proper
needs assessment.
Consequently,
it has revised the working document on agencies prepared in the context of the
annual budget procedure. The review of the agency working document accompanying
the 2015 DB covers, inter alia, the clarification requested by the Parliament
with regard to the extent to which the Commission has modified agency requests
in the draft budget, and the corresponding reasons.
Also the
entry into force of the revised Framework Financial Regulation for agencies on
1 January 2014 will help to clarify transparency for issues like ad hoc grants
and delegation agreements.
349.       (Agencies §86 -
2012/PAR/0648) The Parliament calls on the Commission to uphold the
principles of gender equality and to take account of the strategy launched by
the Commission in 2010 to achieve a better gender balance in positions of
responsibility.
Commission's
response:
Even if
the Commission does not have the power to impose behaviour to an authority,
empowered to conclude contracts of employment, of a legally independent body,
it encourages Agencies to promote gender equality in decision-making positions
in conformity with the Commission's Strategy for Equality between Women and Men
(2010-2015.
350.       (Agencies §90 -
2012/PAR/0649) The Parliament invites the Commission to cooperate more
closely with the agencies on this issue [the difficulties encountered by the
agencies with complex IT systems such as ABAC and SYSPER2].
Commission's
response:
Concerning
IT systems : 
-         DG
HR is currently committed to roll out SYSPER2 in other Institutions (EP,
Council, CDR and CES) and this will prevent us of delivering it to the agencies
before 2017. And in any case, as already mentioned in previous discharge
requests (2011/PAR/0565), any decision to extend Sysper2 to agencies would have
to meet the following three conditions: same rules, good data quality, pay for
the cost incurred (budget appropriation and posts). 
-         within
the perimeter of ABAC, DG BUDG currently offer the agencies the same type of
services as we do for all Commission internal DGs; nevertheless, besides the
provisioning of ABAC as financial information system, the Commission is
developing for –and in close collaboration with- the Agencies- a set of
centrally offered accounting and treasury services.
Bodies set up
under the TFEU and the Euratom Treaty
351.       (Translation Centre for the
Bodies of the EU §2 - 2012/PAR/0650) The Parliament calls on the
Centre, together with the Commission, to propose a remedy to this situation
[the Centre held cash and short term deposits amounting to EUR 35 million at
the end of 2012].
Commission's
response:
The Centre
is fully aware of recurrent surpluses and has already taken remedial steps. In
December 2012 the Centre had already planned, in the preliminary draft budget
for 2014, to consume part of the budget surplus by using a price stability
reserve of EUR 1 092 890. Based on the 2012 cost analysis and the analysis of
the first half of 2013 the Centre decreased the 2014 prices for its clients by
5.2% for documents, 3.1% for trademarks, 20% for term lists and 25% for editing
compared to the previous year. These price modifications reflect not only
changes in the cost of products, but also aim to consume part of the surplus of
the previous years. The final 2014 budget shows a deficit of EUR 4 106 650 that
is balanced by the reserve for price stability created in previous years.
Moreover, as an exceptional measure, the Centre will also propose to the Management
Board that the 2014 prices be further reduced from 1 July 2014. Based on 2014
mid-year cost analysis and simulations and forecasted volumes for 2015, further
price modifications will be proposed for 2015. The 2015 budget will, again, be
prepared as a deficit budget in order to consume part of the previous years'
surplus. The Centre would like to stress that the 2012 surplus was generated
mainly by external factors beyond the Centre's control; especially as a result
of a higher volume of invoiced pages than forecast and the cancelled salary
increase that had been included in the calculation of the Centre's prices for
2012.
352.       (Euratom Supply Agency §2 -
2012/PAR/0651) The Parliament notes with concern that for 2012,
although the Commission granted the Agency its own budget amounting to EUR 98
000 (EUR 104 000 including financial revenue from its own investments) following
the Court’s comments, and although Article 54 of the Treaty establishing the
European Atomic Energy Community and Article 6 of the Statutes of the Agency
provide that it shall have financial autonomy, nevertheless, most of the
Agency’s expenditure was still financed directly by the Commission; calls on
the Commission to provide an explanation for this situation.
Commission's
response:
The
present situation, whereby the Euratom Supply Agency is partially autonomous
(i.e. for the operational costs) and the Commission uses its own budget to pay
directly the major part of the expenses (i.e. the general administrative
expenses - staff, offices, and other minor expenses i.e. telephone, computers)
can be explained by cost-benefit reasons, while it does not jeopardize the
Agency's independence. Indeed, the fact that the Commission bears the major
part of the Agency's expenses enables economies of scale. Should the full
financial autonomy be granted, this would no longer be the case. This in turn
would negatively affect the Commission's budget because the subsidy it would
have to pay to the Agency would be higher than the costs paid directly through
its own budget.
For the
sake of transparency, the European Parliament will be informed about the costs
borne by the Commission.
353.       (Artemis Joint Undertaking
§23 - 2012/PAR/0652) The Parliament invites the Commission to clarify
what is the added value of such a proposal [Commission proposal excluding the
examination of the accounts and the revenue and expenditure of the ECSEL Joint
Undertaking by the Court of Auditors and indicates that the accounts of that
Joint Undertaking will be examined annually by an independent audit body].
Commission's
response:
The
request from the Parliament refers to the Commission's proposal for the future
ECSEL Joint Undertaking in which the discharge for the implementation of the JU
budget was to be given as part of the discharge for the Commission's overall
accounts. In that context, the aim was to simplify the administrative burden
for the newly proposed PPP bodies by providing them with a dedicated financial
regulation including an indirect discharge.
In the
meantime, the interinstitutional debate on the proposed ECSEL JU took place.
One of the main changes that were introduced in the Regulation adopted by
Council on 6 May 2014, compared to the Commission's proposal of 10 July 2013,
was to keep a separate discharge as for the existing Joint Undertakings such as
the ARTEMIS JU. Therefore, the examination of the accounts of the ECSEL JU was
changed back to be a task for the Court of Auditors in the context of a
separate discharge.
[1]
2012 General Budget
Discharge, ECA' Special Reports in the context of the Commission Discharge, EDF
Discharge, Agencies
Discharge. Document references P7_TA(2014)0287, P7_TA-PROV(2014)0288), 
P7_TA-PROV(2014)0290 and P7_TA-PROV(2014)0299) respectively available at the
following Web address:
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=20140403&secondRef=TOC&language=en