Special Report No 20 // 2014#Has ERDF support to SMEs in the area of e-commerce been effective? #(pursuant to Article 287(4), second subparagraph, TFEU)
Date: 2015-01-08
Institutions: European Court of Auditors
Subjects: EU investment, European Regional Development Fund, Greece, Internet site, Italy, Poland, United Kingdom, aid to undertakings, electronic commerce, information technology, information technology applications, small and medium-sized enterprises

EN 

2014 

NO 20

Special Report  Has ERDF support to SMEs 
in the area of e‑commerce 
been effective?

EUROPEAN
COURT
OF AUDITORS

 
EUROPEAN COURT OF AUDITORS 
12, rue Alcide De Gasperi 
1615 Luxembourg 
LUXEMBOURG

Tel. +352 4398-1

E-mail: eca-info@eca.europa.eu 
Internet: http://eca.europa.eu

Twitter: @EUAuditorsECA 
YouTube: EUAuditorsECA

More information on the European Union is available on the Internet (http://europa.eu).

Luxembourg: Publications Office of the European Union, 2015

ISBN 978-92-872-1322-8
doi:10.2865/16680

© European Union, 2015
Reproduction is authorised provided the source is acknowledged.

Printed in Luxembourg

EN 

2014 

NO 20

Special Report

Has ERDF support to SMEs 
in the area of e‑commerce 
been effective?

(pursuant to Article 287(4), second subparagraph, TFEU)

Contents

02

Paragraph

Terms and abbreviations

I–IV 

Executive summary

1–11 

Introduction

1–3 

4–6 

7–9 

Why is e‑commerce important?

EU information society strategies

European Regional Development Fund (ERDF) support to e‑commerce investments

10–11 

ERDF management system

12–16  Audit scope and objectives

17–62  Observations

17–27  Member States’ Operational Programmes (OPs) served as a good basis for providing support to 
small and medium‑sized enterprises (SMEs) in the field of e‑commerce but not for performance 
measurement

18–19 

All Member States selected drafted the OPs audited in line with relevant regional or national information 
and communication technologies (ICT) strategies

20–27 

All OPs audited included e‑commerce measures and associated targets and indicators but late amendments 
to the latter sometimes hampered proper performance assessment

28–51  Managing authorities focused more on outputs than on results at both selection and monitoring 

stages

29–43 

Project‑selection procedures rarely assessed whether the projects selected were the most likely to 
contribute to SME development and/or EU information society objectives

44–51  Managing authorities were, in most cases, unable to assess the impact of a project on an SME’s development

 
Contents

03

52–62  Overall SMEs implemented the projects smoothly but the results achieved were not always 

demonstrated

53–57 

Project outputs were generally in line with the related application

58–62  Many SMEs stated that they had benefited from the implementation of their project but the results 

achieved were not measured systematically

63–68  Conclusions and recommendations

Reply of the Commission

 
Terms and abbreviations

04

AWP: Annual Work Programme

B2B: Business‑to‑Business

B2C: Business‑to‑Consumer

DAE: Digital Agenda for Europe

Deadweight: Deadweight occurs where funding is provided to support a beneficiary who would have made the 
same choice in the absence of aid. In such cases, the outcome cannot be attributed to the policy, and the aid paid 
to the beneficiary has had no impact. Thus the share of expenditure which generates deadweight is ineffective by 
definition, because it does not contribute to the achievement of objectives.

ERDF: European Regional Development Fund: The ERDF provides financial assistance to promote economic and 
social cohesion between the regions of the EU. ERDF interventions are mainly implemented through operational 
programmes involving a large number of projects.

EU: European Union

ICT: Information and communication technologies

Impact: Longer term socioeconomic consequences that can be observed after a certain period after the completion 
of an intervention, which may affect either direct addressees of the intervention or indirect addressees falling 
outside the boundary of the intervention, who may be winners or losers.

Intermediate Body: Any public or private body or service which acts under the responsibility of a managing 
authority, or which carries out duties on behalf of such an authority vis‑à‑vis beneficiaries implementing operations.

Managing Authority: A national, regional or local public authority or a public or private body designated by the 
Member State to manage an operational programme.

OP: Operational Programme: A document approved by the Commission, which takes the form of a coherent set of 
priorities comprising multiannual measures encompassing a large number of projects.

Output: That which is produced or accomplished with the resources allocated to an intervention (e.g. grants 
distributed to SMEs, websites developed, IT software purchased).

Result: Immediate changes that arise for direct addressees at the end of their participation in an intervention (e.g. 
increased turnover, increase in the number of customers, an increase in the percentage of online sales, job creation).

SMEs: Small and medium‑sized enterprises. The Commission defines them as enterprises with fewer than 
250 employees and an annual turnover of less than 50 million euro and/or a balance sheet total not exceeding 
43 million euro.

05

IV
The Court therefore recommends that the 
Commission:

(a)  ensure that it obtains consistent and reliable in‑

formation from the Member States on the Opera‑
tional Programmes’ progress, not only in financial 
but also in performance terms, with a particular 
emphasis on result indicators and targets;

(b)  insist that the selection criteria and procedures 
put in place by the Member States ensure the 
selection of projects that maximise added value 
among applicants in terms of fostering e‑com‑
merce development in SMEs and achieving the 
DAE targets while, at the same time, ensuring such 
procedures are appropriate to their targeted ben‑
eficiaries in terms of the time and administrative 
work required;

(c)  require Member States’ managing authorities to 

put management tools in place for the purpose of 
monitoring the impact of the grant on the busi‑
ness development of the SMEs supported.

Executive  
summary

I
E‑commerce technologies are viewed as a way of 
accelerating economic growth, of further developing 
the single market and of speeding up European inte‑
gration. This is of particular importance in the case of 
small and medium‑sized enterprises (SMEs), which are 
still lagging behind large enterprises when it comes to 
adopting information and communication technolo‑
gies (ICT).

II
The Commission has therefore increasingly placed 
importance on the need to foster e‑commerce devel‑
opments, in particular through one of its flagship 
initiatives, the Digital Agenda for Europe (DAE). The 
ERDF budget has devoted around 3 billion euro to the 
promotion of ICT‑uptake by SMEs during the 2007–13 
programming period.

III
The audit addressed the question of whether ERDF 
support to SMEs in the field of e‑commerce was effec‑
tive and concluded that the ERDF support to e‑com‑
merce projects contributed to increasing the availabil‑
ity of business services online. However, shortcomings 
in the monitoring made it impossible to assess to what 
extent it contributed to the achievement of the EU and 
Member States’ ICT strategies as well as SMEs’ devel‑
opment objectives. Moreover, weak selection proce‑
dures resulted in co‑funded projects that were unlikely 
to provide value for money.

Introduction

06

Why is e‑commerce 
important?

EU information society 
strategies

01 
Electronic commerce (hereafter 
‘e‑commerce’) is ‘the sale or purchase 
of goods or services, whether between 
businesses, households, individuals or 
private organisations, through elec‑
tronic transactions conducted via the 
Internet or other computer‑mediated 
(online communication) networks’1.

02 
E‑commerce technologies are viewed 
as a way of accelerating economic 
growth, of further developing the sin‑
gle market and of speeding up Euro‑ 
pean integration. This is particularly 
relevant to small and medium‑sized 
enterprises (SMEs), whose role in the 
European economy has been repeat‑
edly acknowledged by the Council, the 
European Parliament and the Commis‑
sion, but which are still lagging behind 
large enterprises when it comes to 
adopting information and communica‑
tion technologies (ICT).

03 
Promoting ICT‑uptake, and in particu‑
lar e‑commerce, is therefore key to 
improving overall development and 
competitiveness, especially in the 
case of SMEs, and creating jobs2, as 
has been noted in several Commission 
documents3.

04 
Since 2000 the Commission has drawn 
up several strategies for developing 
the information society in the EU: it 
launched the eEurope initiative4 and 
the European Information Society 2010 
Strategy (i2010 Strategy)5 within the 
framework of the Lisbon strategy, and 
in 2010 it launched the Digital Agenda 
for Europe (DAE), which constitutes 
one of the seven flagship initiatives of 
the current Europe 2020 strategy tar‑
geting growth and jobs (see Figure 1).

05 
The DAE builds on the i2010 strategy. 
It stressed the importance of the 
sustained commitment of the EU and 
Member States as a whole, including 
at regional level6. It contains actions 
grouped in pillars7. One of the pillars 
(‘Digital Single Market’) focuses on, 
among other things, making online and 
cross‑border transactions straightfor‑
ward. Three of its 13 targets concern 
e‑commerce and one focuses spe‑
cifically on SMEs, i.e. 33 % of SMEs to 
make online sales and purchases by 
20158. The last Digital Agenda Score‑
board showed a slow increase in the 
number of SMEs selling and purchas‑
ing online: from 12 % and 24 % in 2009 
to 14 % and 26 % in 2013 respectively.

1   Eurostat and the OECD’s 
common definition.

2   The Internet economy is 

believed to generate 2,6 jobs 
for every job lost and may 
account for 25 % of net 
employment creation (which 
is considered to have been the 
case in France over the 
1995–2010 period). McKinsey, 
‘Impact d’internet sur 
l’économie française’ (The 
impact of the Internet on the 
French economy), March 2011.

3   COM(2010) 245 final/2 of 

26 August 2010 — A Digital 
Agenda for Europe; COM(2011) 
777 final of 15 November 2011 
— Commission Work 
Programme 2012; COM(2013) 
739 final of 22 October 2013 
— Commission Work 
Programme 2014.

4   COM(99) 687 final of 

8 December 1999 — eEurope 
— An information society for 
all.

5   COM(2005) 229 final of 
1 June 2005 — i2010 — 
A European Information 
Society for growth and 
employment.

6   COM(2010) 245 final/2, p. 7.

7  

In 2010, the DAE had 101 
actions grouped in seven 
pillars. In 2012, as part of its 
update, the Commission 
adopted seven new priorities 
and 31 more actions.

8   The other two targets are both 
50 % of individuals buying 
online and 20 % of individuals 
buying online cross‑border by 
2015.

Introduction

07

1 EU information society strategies
e
r
u
g
i
F

Lisbon Strategy (2000)

Objective: Europe becoming the most competitive
and dynamic economy in the world by 2010

It highlights the need for Europe to grasp the opportunities oﬀered by
the digital economy and internet

Europe 2020 Strategy for growth and jobs (2010)

Objective: delivering smart, sustainable and inclusive growth
through seven ’ﬂagship‘ initiatives, one of which is the
’Digital Agenda for Europe‘ 

eEurope initiative
and Action Plan
Objective: to stimulate
services, applications
and Internet content.
It contains 10 priorities,
one of which is
to accelerate e-commerce

Information society
strategy
(i2010 strategy)  
Objective: to promote
convergence in ICT by
2010 through
the implementation
of three sub-programmes,
one of which is for
developing a single
European information space

Digital Agenda for Europe (DAE)

Objective: to reboot the EU economy and enable Europe’s citizens
and businesses to get the most out of digital technologies

Targets: 13 targets - three speciﬁc e-commerce targets

2000

2005

2010

2015

Source: European Court of Auditors.

v

2020

06 
Moreover, in January 2012 the Com‑
mission adopted the Communication 
on e‑commerce and online services 
with the aim of doubling the volume 
of e‑commerce in the EU by 20159.

9   The aim was doubling the 

share of e‑commerce in retail 
sales (3,4 % in 2010) and that 
of the Internet sector in 
European GDP (less than 3 % 
in 2010) by 2015. COM(2011) 
942 final of 11 January 2012 
— A coherent framework for 
building trust in the Digital 
Single Market for e‑commerce 
and online services.

 
Introduction

08

ERDF management 
system

10 
The ERDF is part of the cohesion 
policy funds. Cohesion policy funds 
are implemented through multiannual 
programmes, in shared management 
arrangements between the Commis‑
sion and the Member States. For each 
programming period, on the basis of 
Member States’ proposals, the Com‑
mission approves operational pro‑
grammes (OPs) and indicative finan‑
cial plans which include the EU and 
national contributions.

11 
Projects financed through the OPs are 
selected by managing authorities and 
carried out by private individuals, asso‑
ciations, private or public undertakings 
or local, regional and national public 
bodies.

10   Council Decision 2006/702/EC 

of 6 October 2006 on 
Community Strategic 
Guidelines on Cohesion (OJ 
L 291, 21.10.2006, p. 11).

11   COM(2005) 24 final of 

2 February 2005 — Working 
together for growth and jobs. 
A new start for the Lisbon 
strategy.

12   Council Regulation (EC) No 
1083/2006 of 11 July 2006 
laying down general 
provisions on the European 
Regional Development Fund, 
the European Social Fund and 
the Cohesion Fund and 
repealing Regulation (EC) No 
1260/1999 and Commission 
Regulation (EC) No 1828/2006 
of 8 December 2006 setting 
out rules for the 
implementation of Council 
Regulation (EC) No 1083/2006 
laying down general 
provisions on the European 
Regional Development Fund, 
the European Social Fund and 
the Cohesion Fund and of 
Regulation (EC) No 1080/2006 
of the European Parliament 
and of the Council on the 
European Regional 
Development Fund.

European Regional 
Development Fund (ERDF) 
support to e‑commerce 
investments

07 
In the 2007–13 programming period, 
the Community Strategic Guidelines10 
stated the importance of ICT‑uptake 
by firms, especially SMEs, with re‑
gard to increasing productivity and 
promoting an open and competitive 
digital economy. The Lisbon strategy 
mid‑term review11 also emphasised the 
importance of ICT‑uptake by all sectors 
of the economy and the role cohe‑
sion policy could play in fostering the 
adoption of ICT.

08 
The ERDF budget for ICT‑uptake by 
SMEs for the 2007–13 programming 
period, which includes e‑commerce 
investments, amounts to around three 
billion euro, i.e. 11 % of the support 
targeted directly at SMEs and 21 % of 
that targeted at ICT. According to the 
Commission, by November 2013, 57 % 
of the abovementioned budget had 
been allocated to selected projects, 
showing a low absorption rate when 
compared to 85 % for all structural 
funds (see also paragraphs 24 and 27).

09 
There are no figures available on the 
amounts allocated specifically to 
e‑commerce investments because the 
reporting categories laid down in the 
regulations12 do not require separate 
reporting on e‑commerce support. 
Moreover, the expenditure category 
covering e‑commerce support also 
includes education, training, net‑
working and other SME services and 
applications.

09

13   It should be noted that in the 

United Kingdom (Lowlands 
and Uplands of Scotland) 
there were two levels of 
project implementation 
(project sponsors’ projects 
and SMEs’ projects). Only the 
SMEs’ projects are included in 
this figure.

Audit scope 
and objectives

12 
The Court examined whether ERDF 
support to SMEs in the field of  
e‑commerce was effective. The audit 
focused on three main audit questions:

(a)  Were OPs, developed by the 

Member States and approved by 
the Commission, a good basis for 
efficiently supporting e‑commerce 
measures for SMEs?

(b)  Have managing authorities se‑

lected and monitored e‑commerce 
projects properly?

(c)  Have the e‑commerce projects 

co‑financed by the ERDF been suc‑
cessfully implemented and pro‑
vided measurable benefits to the 
beneficiary SMEs?

13 
The audit focused on the support pro‑
vided by the ERDF during the 2007–13 
programming period and covered five 
OPs from the following four Member 
States: Greece (‘Digital Convergence’), 
Italy (‘Piedmont’ and ‘Emilia‑Romag‑
na’), Poland (‘Innovative Economy’) 
and the United Kingdom (‘Lowlands 
and Uplands of Scotland’). Altogether 
these accounted for 1,6 billion euro 
(51 %) of the ERDF budget set aside for 
ICT‑uptake by SMEs.

14 
The Member States were selected be‑
cause their OPs included e‑commerce 
measures, and on the basis of the 
budget allocation for and amounts 
committed to ICT‑uptake by SMEs.

15 
The audit work covered:

(a)  a review of the Commission’s stra‑
tegic framework for e‑commerce 
and the information society;

(b)  an examination of the national 

and relevant regional e‑commerce 
strategy documents drawn up for 
the 2007–13 period by the coun‑
tries selected, as well as analysis of 
the related OPs;

(c)  visits to national and regional 

authorities responsible for manag‑
ing the OPs in the Member States 
selected;

(d)  an on‑the‑spot examination 

of 30 projects13 that had been 
operational for at least 2 years, 
in order to be able to assess their 
impact. The total eligible costs 
of the projects audited ranged 
from approximately 1 800 euro to 
527 000 euro (to which the ERDF 
contribution ranged from 12 % to 
74 %). Three projects took the form 
of non‑financial assistance, i.e. the 
provision of consultancy services;

(e)  a study visit to a region imple‑

menting the so‑called ‘ICT voucher 
scheme’ (see Box 2), a pilot project 
recently introduced by the Com‑
mission, in order to assess this 
alternative use of the ERDF and 
compare it to the selection pro‑
cedures under which the projects 
audited had been chosen and 
implemented.

16 
Audit evidence was collected from 
interviews with the Commission and 
Member States’ officials, as well as 
from project managers.

Observations

10

19 
The strategies were subsequently 
taken into account by the managing 
authorities in the OPs, though only 
the OPs of Italy (Emilia‑Romagna) and 
Greece explicitly mentioned them. 
Furthermore, only the Greek managing 
authority made explicit reference to 
EU information society strategies from 
the very start of the programming 
period. When the DAE was launched in 
May 2010, one managing authority in 
the United Kingdom took due account 
of it and adapted its OP accordingly 
(see paragraph 23 and Box 1).

Member States’ 
Operational Programmes 
(OPs) served as a good 
basis for providing 
support to small and 
medium‑sized enterprises 
(SMEs) in the field of 
e‑commerce but not for 
performance 
measurement

17 
The Court examined whether:

(a)  Member States drew up their OPs 
in line with relevant strategies in 
the field of ICT;

(b)  OPs defined specific objectives 

and measures addressing the iden‑
tified needs, as well as appropriate 
targets and indicators to monitor 
their performance.

All Member States selected 
drafted the OPs audited in 
line with relevant regional 
or national information and 
communication technologies 
(ICT) strategies

18 
When the OPs were drawn up, all the 
Member States selected had a stra‑   
tegic framework in place that ad‑
dressed their needs in terms of ICT‑up‑
take/the information society, as well as 
of SME development and competitive‑
ness. However, only the Greek strategy 
examined was so comprehensive as 
to include an organisational structure 
that attributed responsibilities with 
regard to both the implementation 
of the strategic objectives, and the 
resources needed and available.

Observations

11

1
x
o
B

Example of an OP amendment appropriate to the new EU initiative: United 
Kingdom (Lowlands and Uplands of Scotland)

The OP ‘Lowlands and Uplands of Scotland’ had been amended in March 2011 to include measures that aimed 
at better addressing the objectives of a new EU flagship initiative, the DAE.

The amendment was made to include support for broadband connectivity for rural SMEs and to align the 
Scottish Government’s Digital Strategy with the DAE.

14   The Piedmont OP was 

amended four times (in 2009, 
2010, 2012 and 2013) and 
Greece’s OP was amended 
twice (in 2011 and 2012), but 
indicators were amended only 
once, in 2012, in both cases. In 
Poland, amendments were 
made in 2011 and 2013 and 
indicators were amended on 
both occasions.

All OPs audited included 
e‑commerce measures and 
associated targets and indi‑
cators but late amendments 
to the latter sometimes ham‑
pered proper performance 
assessment

20 
All the managing authorities had 
included in their OPs measures to pro‑
mote e‑commerce either specifically 
in SMEs or as part of wider measures 
relating to e‑business and ICT‑uptake 
by SMEs, thus addressing the needs 
identified in the related strategies (see 
paragraph 18).

21 
In turn, the Commission appraised 
the needs analyses contained in the 
OPs and verified whether the targets 
set were in line with those analyses 
and whether they contributed to EU 
policies.

22 
All the managing authorities had de‑
fined their own output indicators for 
the e‑commerce measures described 
in their OPs and all but one had also 
defined result indicators (see Fig-
ure 2), as well as the target values as‑
sociated with them. At the outset they 
served as a good basis for monitoring 
programme implementation. Never‑
theless, just two OPs (Italy (Piedmont) 
and Greece) captured the ‘e‑commerce 
for businesses’ indicator set in the DAE. 
The diversity of indicators prevented 
any aggregation that could be used to 
provide information at a higher level.

23 
The Court found that between 
2009 and 2013 the Commission had 
approved several amendments to all 
five of the OPs examined. In three 
cases (Greece, Italy (Piedmont) and 
Poland), however, indicators were 
changed in OP amendments made 
towards the end of the programming 
period, i.e. in 2012 and/or 2013 (see 
also paragraph 19)14.

 
Observations

12

used in the OPs examined

2 Details and changes of the e‑commerce performance indicators and target values 
e
r
u
g
i
F

OP

Output indicators (and target values)

Result indicators (and target values)

Piedmont (Italy)

Number of projects 
co-ﬁnanced (125 for the 
supply of services and 
250 for the use of 
information services)

Companies having received online orders
(60 %) --> Dropped
Companies having placed online orders (26 %)
--> Changed to: Number of companies having
placed online orders (90)

Emilia-Romagna (Italy)

Number of enterprises supported 
(450)

None

Digital Convergence 
(Greece)

Number of enterprises 
ﬁnanced for integrating ICT 
into their everyday operation
(13 561 --> Decreased to 7 700)

Enterprises ﬁnanced that can accept orders 
(8,75 %) 
Enterprises ﬁnanced that can accept online 
payments for sales via the internet (1,31 %) 
--> Merged: Enterprises ﬁnanced that 
can accept orders and/or online 
payments for sales via the internet
(20 %) 

Lowlands and Uplands of
Scotland (United Kingdom)

Number of enterprises receiving 
support for e-commerce (5 700)

Since the start: Number of e-commerce
strategies developed (4 100)

Percentage of enterprises running sales for 
enterprises (B2B) through specialized internet 
markets (12 %)
Percentage of enterprises that have IT systems 
integrated with those of other enterprises (17 %) 
--> Both merged and replaced by: Number of 
enterprises with an implemented and/or 
integrated B2B IT system (5 300)
Percentage of enterprises receiving orders through 
the internet or other networks
(50 %) --> Dropped
Since the start: Number of new jobs created as a 
result of implementing the projects 
(17 500 full-time equivalents)
Since the start: Number of electronic services 
prepared to be provided as a result of 
implementation of the projects (11 000)

Innovative Economy
(Poland)

Number of projects 
co-ﬁnanced (13 100)
Number of enterprises 
supported (11 400) 

Text/Figures in bold: Currently applicable
Normal text/ﬁgures: No longer applicable

Source: ECA.

 
13

15   Council Regulation (EC) 

No 1083/2006 of 11 July 2006 
laying down general 
provisions on the European 
Regional Development Fund, 
the European Social Fund and 
the Cohesion Fund and 
repealing Regulation (EC) 
No 1260/1999 (OJ L 210, 
31.7.2006, p. 25).

16   E.g. the guides ‘Regional 

Policy for Smart Growth of 
SMEs’ and the ‘Digital Agenda 
Toolbox’ (which may be found 
on the Smart Specialisation 
Platform page managed by 
the Commission’s Joint 
Research Centre at http://
s3platform.jrc.ec.europa.eu/
guides).

17   The absorption rates for 
measures promoting 
ICT‑uptake among SMEs were 
well below the ERDF average.

Observations

24 
In particular, the result indicators and/
or their target values were changed 
considerably, which hampered assess‑
ment of the actual results of a project’s 
implementation. When target values 
were altered (OPs in Greece, Italy 
(Piedmont) and Poland), previous and 
new values could not be compared 
because the definition of the indica‑
tors (OPs in Greece and Poland) or the 
measurement units (OPs in Greece and 
Italy (Piedmont)) had been changed, 
and such changes had not always been 
justified by budget decreases or exter‑
nal factors. In two cases, the reason for 
changing was the low demand for the 
actions offered, which also resulted 
in a low absorption of funds (see also 
paragraphs 8 and 27).

25 
The Court considers that such changes 
towards the end of the programming 
period (when the actual achievements 
were already known) jeopardised 
objective measurement of the OPs’ 
effectiveness in developing e‑com‑
merce. Nevertheless, these changes 
were accepted by the Commission 
when approving the OP amendments 
in 2012 and 2013.

26 
In addition, most of the Commission 
monitoring activity on the OPs focused 
on financial information, which is 
important albeit insufficient to evalu‑
ate actual progress made. Moreover, 
the categorisation of financial data 
reported to the Commission by two 
managing authorities (in Greece and 
the United Kingdom) was not reported 
in a consistent manner, as they did not 
always classify e‑commerce projects 
correctly, i.e. in accordance with the 
expenditure code laid down in the 
Council regulation15.

27 
Since 2003 the Commission has made 
efforts to issue16 guides aimed at 
promoting the use of policy tools in 
the area of ICT‑uptake by SMEs, which 
includes e‑commerce. In addition, in 
2013 it also proposed an alternative 
initiative that would make it easier for 
SMEs to implement ICT projects, i.e. 
the ‘ICT Innovation Voucher Scheme’ 
(see Box 2). This initiative was intend‑
ed to remedy the slow absorption of 
funds that had been made available 
for the purpose of addressing the issue 
of ICT‑uptake by SMEs17.

Observations

14

2
x
o
B

ICT Innovation Voucher Scheme — an alternative support scheme for SMEs

The ‘ICT Innovation Voucher’ is a simplified scheme for helping SMEs to modernise their existing business 
through ICT‑uptake. In practice, it offers them a small credit line so that they can buy pre‑defined products 
or services from accredited suppliers. The scheme aims to provide prompt support to SMEs and reduce their 
administrative burden.

It has been undergoing testing in two Spanish regions since 2013. In the region where the pilot project is 
more advanced (Murcia), the procedure takes 2 months from the time a call is issued to the date on which 
grants are approved. In addition, according to the managing authority the administrative cost is less than 
10 %.

The Court identified two shortcomings, however. Firstly, not enough attention was paid to ensuring that 
project funding was driven by SME demand (and not ICT‑supplier demand) and, secondly, no result indicators 
were sought from the beneficiary SMEs, thereby precluding assessment of the impact that the implementa‑
tion of a project actually had.

(b)  project performance was moni‑
tored both during and after 
implementation in order to assess 
the projects’ contribution to SME 
development and to achieving 
strategic objectives.

Managing authorities 
focused more on outputs 
than on results at both 
selection and monitoring 
stages

28 
The Court examined whether the man‑
aging authority ensured that:

(a)  the selection procedure provided 
it with enough information on the 
enterprises’ rationale for making 
the investment and on whether 
project implementation could 
contribute to attaining OP’s ob‑
jectives, enabling it to maximise 
the potential of ERDF funding to 
provide added value in terms of 
both boosting SMEs’ development 
and contributing to the implemen‑
tation of EU information society 
strategies;

 
Observations

15

30 
In addition to the six applicants that 
provided a business plan, a further 
eight of the 30 enterprises whose 
projects were audited had included 
quantifiable business targets in their 
project applications, which provided 
a robust basis for project monitoring 
(see paragraphs 44 to 46).

31 
In the case of the remaining 16 pro‑
jects examined (out of 30), the manag‑
ing authority did not have appropriate 
information on the enterprises’ ration‑
ale for making the investment. In par‑
ticular, in these cases the information 
requested by the managing authority 
did not include a business plan or any 
quantifiable business targets.

Project‑selection procedures 
rarely assessed whether the 
projects selected were the 
most likely to contribute 
to SME development and/
or EU information society 
objectives

Managing authorities rarely 
requested either a business 
plan or quantifiable targets 
when assessing project 
applications

29 
The ERDF regulations did not call for 
business plans or other measurable 
financial or business targets for OPs 
in the 2007–13 programming period. 
Such a requirement is considered good 
practice, however, when it comes to 
assessing the viability and pertinence 
of undertaking any business venture. 
Among the OPs examined, only two of 
the managing authorities (in Poland 
and the United Kingdom) asked for 
business plans to be submitted with 
project applications, though not 
systematically. Consequently, only six 
of the 30 enterprises whose projects 
were examined provided a business 
plan, or other measurable financial or 
business targets (see Box 3).

3
x
o
B

Example of a comprehensive business plan in a project application

In Poland, all projects funded under the measure aimed at promoting Business‑to‑Business (B2B) solutions 
were asked to provide a comprehensive business plan with their project applications.

The business plan was required to provide detailed information that included a description of the company, 
a description of the project (project components, justification for the investment proposed, details of the 
financial, technical and human resources needed to carry out the project), the expected benefits (including 
objectives, measurable output and result indicators, and target values), and financial information on the com‑
pany (balance sheet, profit and loss account and cash flow statements).

Such detailed information provided a basis for a good understanding of the projects’ rationale and conse‑
quently for selection of the most efficient projects.

 
Observations

16

In some cases projects audited 
did not meet the measure’s 
objectives as set out in the OPs

32 
In Greece, five of the audited co‑fin‑ 
anced projects did not comply with 
the measure’s objectives as set out in 
the OPs. Whereas the OP highlighted 
the need to support micro and small 
enterprises, the calls for proposals 
under which the projects audited had 
been selected had also allowed large 
companies to apply for co‑financing 
(see Box 4).

33 
With regard to a measure under one 
OP (Poland) that aimed to help newly 
established companies provide online 
services, the Court found that, at the 
selection stage, the only proof re‑
quired to demonstrate that an enter‑
prise was newly established was an 
extract from the register of companies’ 
stating the date on which the enter‑
prise had been set up. This selection 
criterion was therefore easily circum‑
vented. In fact, of the five audited 
projects supported under the above‑
mentioned measure, two actually 
comprised the new legal form of enter‑
prises that had existed previously and 
either closed down or severely limited 
their business activity, which had then 
been transferred to the newly cre‑
ated enterprise. The entrepreneurs 
had decided to set up a new company 
that met the eligibility criteria in order 
to receive ERDF co‑financing. This 
by‑passing of the abovementioned 
eligibility criterion diminished the ef‑
fectiveness of this measure.

4
x
o
B

Selection of projects that were not in line with the measure’s objectives as set out 
in the OPs

In Greece, the OP made explicit reference to the need to support microenterprises in the tourism sector, 
and defined measures with the objective to address this need, which were highly concentrated in the OP’s 
catchment area and whose level of ICT adoption was particularly low. Many of the targeted enterprises were 
assessed as having a poor or no presence online. Support to such microenterprises also aimed to reduce the 
impact of seasonality on the Greek tourism business by increasing economic activity that could be sustained 
throughout the year.

However, the call for proposals was drawn up in such a way that it did not place particular emphasis on either 
micro or even small enterprises. The outcome was that large hotels also received funding (four of the seven 
enterprises assessed in the tourism sector belonged to top Greek hotel chains).

These hotels also had a well‑established business model based on two main elements: selling through tour 
operators (hence, selling directly via the website was of minor importance), and reliance on seasonality (they 
are open 6 months a year). The implementation of the co‑financed projects had no impact on their above‑
mentioned business model, even though this constituted an objective laid down in the OP and its guidelines.

 
Observations

Weak selection procedures 
resulted in co‑funded projects 
that were unlikely to provide 
value for money

34 
Differences were noted in the selec‑
tion procedures of the OPs audited, 
particularly with regard to the types of 
project, funding ceilings and selection 
processes (see Figure 3)18.

17

18   The United Kingdom’s 

(Scotland) selection procedure 
comprised two stages. The 
first involved the managing 
authority applying a two‑part 
procedure to select project 
sponsors (intermediaries). The 
first part of the procedure 
allowed the managing 
authority (or intermediate 
body) to establish whether or 
not a project met the OP 
eligibility criteria. Successful 
project applications then 

3 Different schemes for selecting e‑commerce projects by Member State
e
r
u
g
i
F

Investment ceiling

Support type

Selection procedure

OP

Piedmont
(Italy)

Emilia-Romagna
(Italy)

Digital 
Convergence 
(Greece)

Direct investment in SMEs

Up to 200 000 euro

Ranking of applications based on 
an evaluation of substantive 
criteria (carried out by
external experts)

Direct investment in SMEs

Depending on the scheme: 
up to 40 000 euro (tourism projects) 
or 200 000 euro (retail projects)

First come, ﬁrst served
Based on fulﬁlment of eligibility criteria

Lowlands and 
Uplands of Scotland
(United Kingdom)

Funding of intermediaries
(project sponsors)

Grants: up to 200 000 euro
and/or 
No ﬁnancial support: 
advice/consultancy services

Selection of SME projects by project 
sponsors: ﬁrst come, ﬁrst served basis 
based on fulﬁlment of eligibility criteria

Direct investment in SMEs

Up to 200 000 euro

Up to 2010: First come, ﬁrst served basis 
based on fulﬁlment of eligibility criteria
From 2010: Ranking of applications based 
on evaluation of substantive criteria

Innovative 
Economy
(Poland)

Source: ECA.

 
18

underwent the second part of 
the procedure, in which 
applications were evaluated 
on the basis of specific criteria 
and then weighted. The 
second stage of the overall 
selection procedure 
comprised the project 
sponsors that had been 
selected providing assistance 
to SMEs on a first come, first 
served basis.

19 

Including the four projects 
mentioned in paragraph 36 (a).

Observations

35 
Most of the selection procedures 
were conducted on a ‘first come, first 
served’ basis where only eligibility 
criteria were applied and they were 
easy to fulfil. Up until 2010, under only 
two of the five OPs in Italy (Piedmont, 
Emilia‑Romagna) had the managing 
authority used a qualitative selection 
procedure based on substantive criter‑ 
ia, ranking of applications and expert 
evaluation. In 2010, Poland decided to 
amend its selection procedures and 
introduced qualitative evaluation and 
ranking of proposals into the selection 
process.

36 
The combination of a lack of demand‑
ing criteria and comparative selection 
of applications and the absence of 
comprehensive business information 
in project applications resulted, in over 
one‑third of the cases, in the co‑fund‑
ing of projects that offered low or no 
value for money:

(a)  In Greece, four projects — con‑

sisting in the development of 
a website with an online booking 
facility — were redundant. The 
enterprises had had a website and 
online booking facility before they 
carried out the project. Moreover, 
the websites developed had the 
same layout as other websites 
put in place by other hotels in the 
same chain, which had also been 
co‑funded (at the same or a very 
similar cost) by the ERDF under the 
same call for proposals.

(b)  Ten of the 30 co‑financed projects 
audited (all 10 of which were in 
either Italy (Emilia‑Romagna and 
Piedmont) or Greece19) would 
have been carried out even in the 
absence of public co‑financing, 
according to what was stated by 
the project owners. Moreover, five 
of these 10 projects had started 
well before the grant had been 
notified. Three of them started 
before the enterprises had even 
submitted a co‑financing applica‑
tion. All these projects represent 
deadweight.

(c) 

In one Member State (United King‑
dom), project sponsors provided 
advice to enterprises, in addition 
to or instead of grants. In the case 
of the three SME projects that 
received advice, according to the 
project owners, the impact of the 
ERDF support was negligible, since 
all three enterprises had devel‑
oped their own e‑commerce strat‑
egy and online presence indepen‑
dently and at their own expense. 
In two of those cases, the advice 
did not help the enterprises in any 
way and was therefore considered 
useless by them.

Observations

19

The selection procedures were 
sometimes too lengthy

37 
The average time taken to approve 
the projects audited (timespan from 
the launch of the call for proposals 
to the grant award) lasted more than 
6 months in the case of three of the 
five OPs audited (in Greece and Italy 
(Emilia‑Romagna and Piedmont)). This 
potentially affected applicants who 
could not raise sufficient capital and 
were actually in greater need of public 
financial support, and could not carry 
out their projects as a result.

38 
Delays of several months were only 
partly explained by the fact that the 
selection process included an expert 
evaluation and comparison of ap‑
plications received, based on a set of 
substantive criteria. This was the case 
in Italy, where the average project 
approval took either 8 months (OP for 
Emilia‑Romagna) or 14 months (OP for 
Piedmont).

39 
However, delays of 7 months were 
difficult to justify when the selection 
procedures were also ‘first come, first 
served’ with no substantive appraisal 
and comparison of applications, as was 
the case in Greece. (‘Digital Conver‑
gence’ OP). Similar procedures in the 
United Kingdom (‘Lowlands and Up‑
lands of Scotland’ OP) or Poland (‘In‑
novative Economy’ OP) took between 
2 and 4 months.

40 
The duration of the selection proce‑
dure under the Greek OP may also be 
compared to that of the pilot project 
for the ‘ICT Innovation Voucher’ initia‑
tive, since they both funded similar 
types of off‑the‑shelf projects, spe‑
cifically defined at regional level, on 
a first come, first served basis. Under 
the voucher pilot project very similar 
projects were selected in less than one 
third of the time needed in Greece (see 
Box 2).

In most of the Member States 
visited, the selection procedure 
did not take account of the 
cross‑border dimension

41 
At the beginning of the programming 
period, the selection procedures under 
which the audited projects were se‑
lected in all the Member States visited, 
with the exception of Greece (where 
it was compulsory), did not take the 
matter of cross‑border online services 
into consideration, despite this being 
an important factor as regards achiev‑
ing a more integrated digital internal 
market (as stated in the i2010 strategy 
and emphasised in the DAE) (see also 
paragraph 5). In 2010, after reviewing 
its selection procedure and criter‑ 
ia, Poland introduced the selection 
criterion of ‘the international dimen‑
sion of a project’ (offer of cross‑border 
services) into the OP concerned.

Observations

20

42 
Only seven of the 22 enterprises 
whose projects were examined and for 
which cross‑border transactions made 
sense actually carried out a project 
that enabled them to create a website 
or adapt their own for cross‑border 
transactions. Another four enterprises 
already had such a component avail‑
able to them within their company or 
the company group to which they be‑
longed. Hence, half of the enterprises 
that by implementing their respective 
projects could have benefited from the 
opportunities brought by cross‑border 
e‑commerce had missed out on them.

43 
Ten of the 23 enterprises whose pro‑
jects were audited, and of which it was 
reasonable to expect a multilingual 
website, did have a website in two or 
more languages. Of those 10 enterpris‑
es, two had had a multilingual website 
before the project was implemented. 
The remaining eight had this capabil‑
ity for the first time as a result of their 
projects being implemented.

Managing authorities were, 
in most cases, unable to 
assess the impact of a project 
on an SME’s development

Over half of the projects 
examined were not asked to 
report on any result‑oriented 
targets

44 
All the managing authorities asked 
beneficiary enterprises to submit re‑
ports on the progress of their project’s 
implementation and, depending on 
the duration, reports were submitted 
either following or both during and 
after project implementation. How‑
ever, in 16 of the 30 cases examined 
this information concerned only the 
physical completion of the project, i.e. 
purchase and/or development of the 
necessary IT solutions. Moreover, the 
reports did not contain information 
on the duration of one third of the 
projects audited.

45 
The competent managing authori‑
ties (in Greece, Italy and the United 
Kingdom) did not ask for any result‑ori‑
ented targets for any of the 16 projects 
concerned. The only information re‑
quested, and provided by the benefi‑
ciaries, concerned the actual cost of 
the project and the outputs achieved.

Observations

21

46 
For the other 14 projects, detailed 
monitoring of business data was 
sought so as to allow the managing 
authority to assess the immediate 
impact of the project’s implementa‑
tion on the enterprise’s development. 
In the case of one managing author‑
ity, payments were linked to project 
performance (see Box 5).

47 
No further systematic monitoring was 
carried out once a project had been 
fully implemented other than by one 
managing authority (Poland) and one 
project sponsor (United Kingdom), 
which had specified an obligation to 
this effect in the grant agreement. 
Other managing authorities were 
therefore left with information that 
was insufficient to judge how effec‑
tively the support given had con‑
tributed to the development of the 
co‑financed enterprises and/or the 
strategic objectives set.

5
x
o
B

Example of result‑oriented management: linking payments to performance

In Poland, payments were linked to the achievement of business‑result targets. Where the target values were 
not attained, the Intermediate Body had the possibility to decrease the amount of the grant.

This was the case with one of the projects assessed, where underperformance (the expected revenue target 
was not achieved) was reflected in decreased public‑funding support of 5 % for the project in question.

In some cases, monitoring 
systems did not record project 
performance in a reliable 
manner

48 
In the case of all but one of the manag‑
ing authorities examined, performance 
information was provided by SMEs in 
the form of a standardised report. One 
managing authority (Italy (Emilia‑Ro‑
magna)) had no such standardised 
format, however, which meant that the 

reports it received varied greatly in 
terms of quality, since each enterprise 
chose what and how to report. This, in 
turn, meant that the managing author‑
ity was unable to assess whether or 
not a project had been completed suc‑
cessfully. For example, one beneficiary 
failed to declare that one of the com‑
ponents of the project (online shop‑
ping basket) had not been developed, 
and the managing authority did not 
address the matter, despite it being 
part of the co‑financed project.

 
Observations

22

49 
In the case of two other managing 
authorities (Italy and the United King‑
dom), the data entered in the monitor‑
ing systems was not fully reliable and/
or comprehensive:

(a)  In Italy (Piedmont), the managing 
authority did not check the ac‑
curacy of the information pro‑
vided. In two of the four projects 
assessed, the information fed into 
the system was erroneous (in one 
case it concerned the output indi‑
cator and in the other, the number 
of employees at one of the enter‑
prises co‑financed).

(b)  In the United Kingdom (Lowlands 
and Uplands of Scotland), the 
poorly‑defined indicators set by 
the managing authority resulted 
in each project sponsor interpret‑
ing them differently and hence not 
reporting progress in a consistent 
manner.

Lack of data sometimes 
hampered monitoring of the 
economic use of EU funding

50 
In the United Kingdom (Lowlands 
and Uplands of Scotland), enterprises 
were supported via intermediaries 
(i.e. project sponsors). In some cases, 
intermediaries provided non‑financial 
assistance, i.e. provision of advice or 
consulting services (see also paragraph 
36(c)).

51 
In two cases the intermediaries’ ad‑
ministrative costs were considerable, 
especially when compared to those of 
the pilot project for the ‘ICT Innovation 
Voucher’ initiative (see Box 2). In the 
other Member States it was possible 
to establish the exact amount paid to 
SMEs for ICT‑uptake, whereas in this 
case it was unclear how much ERDF 
funding was actually devoted to sup‑
porting beneficiaries (see Box 6).

6
x
o
B

Lack of information on the economy of the administrative costs incurred by 
intermediaries

In Scotland, the managing authority implemented projects via intermediaries, i.e. project sponsors.

As the intermediaries themselves were providing the consultancy support to SMEs, administrative costs, 
including salaries, accounted for a significant share of the expenditure reimbursed: one project sponsor used 
55 % of its budget for salaries and another 18 % for marketing activities, while in the case of another, salaries 
accounted for 82 % of the total budget. In the absence of any data being made available, however, the Court 
was unable to conclude whether or not the funds in question were used economically. Furthermore, one of 
the intermediaries was unable to document the time spent or work involved in providing advice to some of 
the SMEs that it supported.

 
Observations

23

Overall SMEs 
implemented the projects 
smoothly but the results 
achieved were not always 
demonstrated

(b)  another eight enterprises had had 
an online presence before the pro‑
ject was implemented, but chose 
to either create a new website or 
update their existing one.

52 
The Court assessed whether:

(a)  projects had been carried out 

and were maintained as initially 
planned;

(b)  the intended economic benefits 
of implementing a project were 
obtained and measured.

Project outputs were gener‑
ally in line with the related 
application

53 
In most cases projects were carried out 
within budget and without major de‑
lays. Where budget overruns occurred, 
the amounts involved were small and 
did not affect the amount of public 
co‑financing. For all projects delays 
had been notified to and approved by 
the managing authority.

54 
In 25 of the 30 projects audited, out‑
puts were achieved as planned and 
were operational:

(a)  17 beneficiary enterprises were 
able to go online following the 
creation of a website, and nine of 
them were able to conduct online 
sales;

In four of the abovementioned 25 
cases, the e‑commerce developments 
formed part of wider projects aimed 
at digitising the enterprise’s internal 
procedures (e‑business).

55 
In the case of the remaining five pro‑
jects audited (in Greece, Italy (Pied‑
mont) and Poland), their implemen‑
tation did not provide the intended 
outputs. In the case of one project 
the enterprise did not make use of the 
application developed. Another four 
projects, despite the IT applications 
developed and implemented, either 
failed to carve out a niche in the mar‑
ket or experienced technical difficul‑
ties (see paragraph 57).

56 
Even though the vast majority of 
projects did not provide for an IT 
maintenance budget at the outset 
(only four projects did so), this posed 
no problem to any of the enterprises 
whose projects were assessed. In fact, 
the IT software was generally designed 
to ensure low maintenance costs and 
enable users to upgrade and make 
changes themselves (this was the case 
for 14 projects).

Observations

24

57 
Almost no enterprise experienced 
major technical problems during or 
after implementation. The IT applica‑
tions developed were operational and 
worked without interruption. The few 
exceptions were the following: two en‑
terprises in Greece whose website and/
or online booking page could not be 
accessed and three other enterprises 
in Poland and Italy that failed to find 
a market niche and had no customers. 
In these three cases the sustainability 
of the project was not merely a mat‑
ter of IT maintenance: one project was 
not completed and for the other two 
the enterprises feared that they would 
not continue their economic activity 
beyond the legal sustainability period.

Many SMEs stated that 
they had benefited from 
the implementation of 
their project but the results 
achieved were not measured 
systematically

58 
Of the 30 enterprises whose projects 
were assessed, barely half had been 
asked to provide result targets (see 
also paragraphs 44 to 46). Of the 
14 projects whose applications con‑
tained result targets that were also 
monitored, the results were achieved 
in eight cases. Result targets consisted 
of increased turnover, an increase in 
the number of customers, an increase 
in the percentage of online sales, and/
or job creation.

59 
As far as the other half of the en‑
terprises receiving ERDF support to 
develop e‑commerce is concerned, no 
link could be established between the 
input received and the business devel‑
opment achieved by the enterprise.

60 
Thirteen enterprises claimed that they 
had made efficiency gains as a result of 
their project’s implementation, albeit 
that all but one had not fixed any such 
targets in their project applications. 
Of these 13 enterprises, only four were 
able to quantify them. Six enterprises 
had not linked the co‑funded website 
to their internal business software, 
which meant that every online book‑
ing received had to be entered in their 
internal systems manually.

61 
Job creation was generally not the aim 
of most of the projects co‑financed. 
However, eight projects had a job‑cre‑
ation target which the enterprises had 
set as a result target in their project 
applications.

62 
All eight projects achieved their target. 
A further five enterprises claimed that 
they had hired one or more people 
as a result of the project’s implemen‑
tation, four of which were able to 
substantiate this. Half of the enter‑
prises whose projects were assessed 
organised training for their staff in the 
use of the IT applications developed 
under the project. This training was 
customised to cater for the individual 
enterprises that requested it, hence no 
certificates were issued. On‑the‑job 
training was also common.

Conclusions and 
recommendations

25

63 
E‑commerce technologies are viewed 
as a way of accelerating economic 
growth, of further developing the 
single market and of speeding up 
European integration. The Com‑
mission has therefore increasingly 
placed importance on the need to 
foster e‑commerce developments, in 
particular through one of its flagship 
initiatives, the DAE. The EU structural 
funds budget has devoted three billion 
euro to the promotion of ICT‑uptake 
by SMEs during the 2007–13 program‑
ming period.

64 
The audit addressed the question of 
whether ERDF support to SMEs in the 
field of e‑commerce was effective 
and concluded that the ERDF support 
to e‑commerce projects contributed 
to increasing the availability of busi‑
ness services online. However, short‑
comings in the monitoring made it 
impossible to assess to what extent it 
contributed to the achievement of the 
EU and Member States’ ICT strategies 
as well as SMEs’ development objec‑
tives. Moreover, weak selection proce‑
dures resulted in co‑funded projects 
that were unlikely to provide value for 
money.

65 
Member States’ OPs served as a good 
basis for providing support to SMEs 
in the field of e‑commerce. They 
included e‑commerce measures in 
line with their national or regional 
needs, as defined in their respective 
ICT strategies. However, meaningful 
measurement of the progress made 
was sometimes jeopardised by the 
fact that indicators and target values 
were revised, frequently towards the 
end of the programming period, and 
not always with proper justification. 
Moreover, expenditure related to 
e‑commerce projects was not always 
reported to the Commission under the 
correct category and this hindered its 
overall assessment. In 2013, the Com‑
mission addressed the slow absorption 
of funds by proposing an alternative 
use of structural funds to promote 
ICT‑uptake by SMEs through its ‘ICT 
Innovation Voucher Scheme’. But it did 
not pay enough attention to perfor‑
mance monitoring, which is indispen‑
sable for evaluating actual progress 
made (paragraphs 18 to 27).

66 
Managing authorities focused more 
on outputs than on results, at both 
selection and monitoring stages. The 
limited nature of the selection criteria 
applied meant that they sometimes 
financed all eligible projects for as 
long as funding was available, regard‑
less of any potential added value from 
the perspective of developing SMEs or 
the EU information society’s objectives 
(paragraphs 29 to 43). Moreover, man‑
aging authorities were, in most cases, 
unable to assess the impact of a pro‑
ject on an SMEs development. Finally, 
in two of the Member States selected, 
they did not carry out the necessary 
checks on the reliability of the data fed 
into the system (paragraphs 44 to 51).

Conclusions and recommendations

26

67 
Overall SMEs implemented the pro‑
jects smoothly and outputs were 
generally in line with the related ap‑
plication. Many SMEs stated that they 
had benefited from the implementa‑
tion of their projects but results were 
only measured in less than half of the 
projects audited. In these cases, it was 
found that there were benefits for over 
half the SMEs concerned (paragraphs 
53 to 62).

Recommendation 2

The Commission should insist that the 
selection criteria and procedures put 
in place by the Member States ensure 
the selection of projects that maxim‑
ise added value among applicants in 
terms of fostering e‑commerce de‑
velopment in SMEs and achieving the 
DAE targets while, at the same time, 
ensuring such procedures are appro‑
priate to their targeted beneficiaries in 
terms of the time and administrative 
work required.

68 
The Court therefore recommends the 
following:

When selecting projects, Member 
States’ authorities should, where ap‑
propriate, require applicants to:

(a)  provide justification of the need to 
implement the project concerned, 
ideally in the form of a sufficiently 
detailed and realistic business 
plan;

(b)  demonstrate the financial viability 

of the project;

(c)  demonstrate the need for public 

financial support in order to avoid 
deadweight spending;

(d)  incentivise project owners to take 
the cross‑border dimension of 
their business into account in order 
to fully exploit the opportunities of 
the single market.

Recommendation 1

The Commission should ensure that it 
obtains consistent and reliable infor‑
mation from the Member States on the 
OPs’ progress, not only in financial but 
also in performance terms. To this end, 
it should:

(a)  assess the relevance of the result 
indicators proposed, both when 
approving the OPs and subsequent 
amendments;

(b)  design a monitoring system in 

such a way that progress towards 
all target values set can be meas‑
ured in a timely way and allowing 
for comparison over time;

(c)  suggest standard indicators rele‑ 
vant to EU strategic objectives on 
e‑commerce.

Conclusions and recommendations

27

(b)  wherever appropriate, a mecha‑
nism is introduced that ensures 
that payments are linked to 
performance and allows for their 
adjustment in the event of serious 
underperformance;

(c)  the necessary checks and controls 
are carried out to ensure that 
the data entered into the moni‑
toring systems are reliable and 
consistent.

Recommendation 3

The Commission should require 
Member States’ managing authorities 
to put management tools in place for 
the purpose of monitoring the impact 
of the grant on the business develop‑
ment of the SME supported. It should 
require in particular that:

(a)  a minimum set of robust indicators 
with related targets are defined in 
the grant agreements, measured 
and subjected to subsequent mon‑
itoring, both once the project has 
been implemented and is opera‑
tional and at a later stage, when its 
full impact is likely to have taken 
effect;

This Report was adopted by Chamber II, headed by Mr Henri GRETHEN, Member 
of the Court of Auditors, in Luxembourg at its meeting of 12 November 2014.

For the Court of Auditors

Vítor Manuel da SILVA CALDEIRA 
President

 
 
 
Reply of the  
Commission

28

Executive summary

III
The Commission welcomes the Court’s assessment.

The Commission considers that the effectiveness of 
the ERDF support to e‑commerce projects allows 
increasing the availability of business services 
online.

The new regulations for the European Structural 
and Investment Funds (ESIF) for the 2014–20 period 
address the issue of monitoring at programming 
level by strengthening the result orientation and 
intervention logic by introducing ex ante condi‑
tionalities. In the case of e‑commerce investments, 
a specific ex ante conditionality is required in the 
form of a strategic policy framework for digital 
growth.

IV (a)
The Commission accepts this recommendation.

For the 2007–13 period, the Commission requires 
the managing authorities to report on the imple‑
mentation of the programmes in line with the 
applicable ERDF regulations.

The 2014–20 ESIF programmes will put a stronger 
emphasis on results based on targets. At priority 
axis level the indicators will capture the overall per‑
formance in the axis, but not the individual perfor‑
mances of all types of action that might be included 
in that axis.

IV (b)
The Commission accepts the recommendation and 
will request appropriate measures to be taken by 
the Member States.

The ‘guiding principles for the selection of opera‑
tions’ and ‘output indicators, including the quantified 
target value’ have to be part of the 2014–20 ESIF 
programmes and are subject to the negotiations 
with the Commission. The type of selection princi‑
ples and detailed selection criteria will depend on 
the specific objective and context of the co‑funded 
investment.

Member States with identified weaknesses in those 
areas are requested to describe in the programme 
(ex ante conditionality, action plan) what actions the 
authorities are planning to take in order to improve 
project selection procedures and administrative 
burden to beneficiaries. Where relevant, Member 
States are encouraged to use technical assistance 
in a proactive and focused way for envisaged 
improvements.

In addition, the Commission will advise managing 
authorities to include the recommendations of the 
European Court of Auditors in the selection process 
and selection criteria of digital growth projects.

IV (c)
The Commission partly accepts this 
recommendation.

In particular, the Commission agrees in principle 
to having a mechanism introduced that ensures 
that payments are linked to performance. However, 
linking ERDF payments for e‑commerce with results 
would be challenging.

Reply of the Commission 

29

Introduction

Observations

05
The Commission points out that the share of SMEs 
purchasing online is generally much higher, and the 
EU average of 26 % is much closer to the target. This 
relative success is partly due to a higher starting 
point. Also, it is easy to purchase online, but diffi‑
cult to sell since a platform needs to be set up, with 
payment and delivery mechanism.

18
The Commission welcomes the Court’s assessment 
concerning the strategic framework put in place in 
all audited Member States. Moreover, the Commis‑
sion stresses that the new ESIF regulation provides 
a better performance and result‑orientation frame‑
work for the 2014–20 period. (See reply under point 
IV b))

09
The Commission shares the Court’s concern about 
the low absorption rates of the funds for ICT 
take‑up. The Commission therefore drafted and 
disseminates1 guidance in order to promote the 
use of policy tools for ICT take‑up by SMEs, includ‑
ing e‑commerce. For instance, as part of the ‘smart 
guide to service innovation’, the guide to ‘Smart 
growth of SMEs’, the guide to ‘SME internationalisa‑
tion’, the guide to different digital growth enhanc‑
ing support methods ‘Digital Agenda Toolbox’ 
and the Blueprint for ICT innovation vouchers 
mentioned below. The Commission also provides 
access to digital growth experts via its technical 
assistance.2

The Commission also launched in 2003 the Euro‑
pean e‑Business Support Network for SMEs (eBSN) 
as policy coordination platform designed for 
national and regional decision‑makers and pub‑
lic policy experts in the field of e‑Business. This 
includes an initiative to promote the smart use of 
IT and the integration of SMEs in global industrial 
value chains.3

1  See: http://s3platform.jrc.ec.europa.eu/guides

2  As done in 2013‑14 in the case of Hungary, Greece and Italy

3   See: http://ec.europa.eu/enterprise/sectors/ict/ebsn/what/

index_en.htm

22
The regulation governing the 2007–13 programmes 
does not include any requirement for standardised 
indicators being used for monitoring purposes. In 
addition, there is no core indicator specifically for 
e‑commerce.

A ‘result indicator’ captures the results expected 
by the implementation of a given activity. Conse‑
quently, the Member States opt for a result indicator 
that best measures the performance of the activ‑
ity undertaken. Although standardisation is pos‑
sible with output indicators, results indicators are 
tailor‑made and mirror the objective pursued.

Common reply to paragraphs 23 and 25
Results indicators are modified by the managing 
authorities during the entire programming period. 
The Commission points out that if a Member State 
requests a programme amendment, it is necessary 
to revisit also the corresponding indicators in the 
programme. If there is a serious deviation, there is 
a need to investigate what is the reason for such 
a deviation case by case. The European Commission 
negotiates amendments and requests a solid justi‑
fication to be provided by the Managing Authority. 
The result indicators are updated both upwards (if 
the level of ambition can still be higher) and down‑
wards (if the economic reality and the progress 
made on the ground was not dependent on a man‑
aging authority).

As regards Greece, the recent OP Digital Conver‑
gence modification of December 2012 principally 
concerned a considerable (about 300 M€) budget 
reduction to reinforce the OP Competitiveness. 
This reduction affected inevitably the value of 
indicators which had to be fine‑tuned and adjusted 
accordingly.

Reply of the Commission 

30

24
The changes of the indicators in the OP Innovative 
Economy in Poland were made at the beginning of 
2011. Taking into account that the OP was approved 
at the end of 2007, and first calls for proposals 
were launched in 2008 and 2009, the modifications 
were made at the earliest possible moment after 
first experiences gained in implementation of this 
measure in the middle of the programming period 
with relevant justification provided by the manag‑
ing authority.

26
Although guidance was provided (see Footnote 6) 
to the responsible authorities by the Commission 
on the principles of the categorisation information 
system, the classification of expenditure remains 
the responsibility of the managing authority.

Box 2
In the European Regional Development Fund con‑
text, ‘ICT innovation voucher’ is a delivery mecha‑
nism that enables reaching out to microenterprises 
and SMEs in a way that it reduces the administrative 
burden to the latter. There is no ‘one‑size‑fit‑all’. 
Each scheme will be developed and implemented 
by regional and local authorities in the form of 
grants or financial instruments according to rele‑ 
vant specific factors such as the ICT potential and 
intensity of each region, its integration with other 
innovation management measures, the capacity 
to manage the scheme, previous experience in 
supporting such measures or the need for improve‑
ment in ICT‑uptake of SMEs.

By reference to the principle of subsidiarity and 
under shared management, it is up to Member 
States and regions to decide whether to launch an 
ICT Innovation Voucher Scheme in the framework of 
their OPs. The Commission currently promotes the 
uptake of the scheme by regions in their innovation 
or digital growth strategies.

The Commission also agrees with the need for sup‑
porting a demand‑driven support scheme address‑
ing the SMEs business needs.

However, the experience gained so far in the 
regions suggests that there is often not enough 
knowledge in SMEs to identify precisely the tech‑
nology/ICT solution that would match its business 
concept and SMEs need support to identify and for‑
mulate their ICT demand and formulate an appro‑
priate business plan. Providing advice to analyse 
and identify the right ICT business solution for the 
SMEs is also part of the voucher initiative.

In view of the experimental character of the 
voucher initiative and in view of the limited time of 
implementation, no result indicators are available 
to date. This information will be made available to 
the Commission at the next monitoring committees 
scheduled for mid‑2015.

At programme level, it is important to underline 
that in the programming period 2007–13, there are 
not result indicators in place but output indicators. 
This information will be nevertheless requested at 
monitoring committees.

Reply of the Commission 

31

29
Under shared management, the setting out of 
detailed selection criteria and the selection of 
projects is the responsibility of the Member States. 
This means that when selecting the e‑commerce 
projects, the managing authority decides whether 
a business plan has to be presented as part of the 
application (or other information in line with the 
objectives of the OP) and what it needs to contain. 
The Managing Authority also verifies the quality of 
the project application and supporting documents 
(e.g. quality of business plans).

31
Under shared management, the setting out of 
detailed selection criteria and the selection of 
projects is the responsibility of the Member States. 
This means that when selecting the e‑commerce 
projects, the Managing Authority decides whether 
a business plan has to be presented as part of the 
application (or other information in line with the 
objectives of the OP) and what it needs to contain. 
The Managing Authority also verifies the quality of 
the project application and supporting documents 
(e.g. quality of business plans).

Common reply to paragraph 32 and 
box 4
The Commission underlines that it is aware of the 
case described in paragraph 32 and box 4. Appro‑
priate corrective measures have been initiated by 
the Commission and the Member State.

33
The Commission stresses that ‘guiding principles for 
selection’ of operation, as part of OPs, are carefully 
scrutinised by the Commission in the negotiation 
of the ESIF programmes for the 2014–20 period 
to ensure that they fit the specific objectives and 
types of operations.4

35
The Commission considers that sufficient evidence 
should be retained by the Managing Authority (or 
the delegated Intermediate Body) to witness that 
the selection procedure is transparent and meets 
the criteria decided by the Programme Monitoring 
Committee.

36 (a)
The Commission underlines that it is aware of the 
case described. Appropriate corrective measures 
have been initiated by the Commission and the 
Member State.

36 (b)
Concerning the Italian projects and as it was 
explained by the Member States’ authorities the 
call was drawn up in accordance with Regulation 
(EC) 1998/2006 (‘de minimis’). This regulation did 
not provide for an incentive‑effect requirement, 
unlike other aid schemes. Nevertheless, the call 
limited retroactive expenditure to 01/01/2008 and 
did not extend it to 01/01/2007 as would have been 
possible.

4   Art 96(2)b Common Provision Regulation: ‘(iii) a description of 
the type and examples of actions to be supported under each 
investment priority and their expected contribution to the 
specific objectives referred to in point (i) including the guiding 
principles for the selection of operations and where appropriate, 
the identification of main target groups, specific territories 
targeted, types of beneficiaries, the planned use of financial 
instruments and major projects;’

Reply of the Commission 

32

37
The Commission agrees with the Court and will, 
in relevant cases, raise the issue of the duration of 
project selection in the Programme Monitoring 
Committees with a view to ensure approved and 
faster procedures.

43
Translating the website could be envisaged when 
business opportunities arise abroad at the target 
market. However, the costs incurred might exceed 
the additional benefits depending upon the nature 
of the business.

40
The Commission underlines the difference of inten‑
sity of intervention between the Greek OP and the 
pilots project ‘ICT innovation vouchers’ going in the 
case of the Greek OP from 40 000 to 200 000€ and 
in the case of the pilots from 5 000€ to 7 500€. This 
also could explain the difference in the duration of 
the selection procedure.

Furthermore, Murcia based its ICT innovation 
voucher pilot on its extensive experience in the 
design, implementation and management of inno‑
vation vouchers.

41
The cross‑border dimension depends upon the 
nature of the business. The business can be local 
and therefore rules out cross‑border activities. 
Future expansion of the business might in turn 
require the adaptation of the website with multi‑lin‑
gual facilities.

The Commission insists for the 2014–20 ERDF pro‑
grammes on the importance of internationalisation 
of SMEs, as analysis show that SMEs that are active 
beyond their national boundaries tend to be more 
competitive.5

5   See for instance: http://ec.europa.eu/enterprise/policies/

sme/files/support_measures/internationalisation/
report_internat_en.pdf

Common reply to paragraphs 44 and 45
The regulation governing the 2007–13 programmes 
does not include any requirement for standardised 
indicators being used for monitoring purposes. In 
addition, there is no core indicator specifically for 
e‑commerce.

The analysis of the reports submitted on the pro‑
gress of the project’s implementation is done at 
Member State level. According to the legal bases 
the Commission provides guidance for the improve‑
ment of the project’s management.

A ‘result indicator’ captures the results expected 
by the implementation of a given activity. Conse‑
quently, the Member States opt for a result indicator 
that best measures the performance of the activ‑
ity undertaken. Although standardisation is pos‑
sible with output indicators, results indicators are 
tailor‑made and mirror the objective pursued.

47
Systematic monitoring of fully implemented pro‑
jects can be regarded as a good practice but is not 
an obligation under the regulations.

Managing Authorities should carry out evaluations 
to assess the effectiveness, efficiency and impact of 
a programme. An evaluation shall assess how sup‑
port from the Funds has contributed to the objec‑
tives for each priority.

Reply of the Commission 

33

49 (a)
The Commission acknowledges the problem, but 
draws the attention to the effects of the economic/
financial crisis that led to a high business mortal‑
ity rate, and to withdrawals from funded projects, 
as well as a generalised lengthening of the imple‑
mentation times for interventions. To address this 
crisis, the Piemonte authorities focused their efforts 
(including the monitoring) on speeding up the 
absorption of the funds.

The Managing Authority is implementing a num‑
ber of initiatives aimed at ending this ‘emergency’ 
situation and reinstating the regular, constant and 
orderly performance of computerised management 
activities for all information relating to the state of 
progress of the funded projects.

49 (b)
The Commission acknowledges that relevant indica‑
tors should be adequately defined to enable the 
Managing Authority to aggregate the data at OP 
level.

The new ESIF regulations for 2014–20 period 
address this problem.

Box 6
The projects audited concern primarily the provi‑
sion of intermediaries’ expert advice and support 
services to new and existing business. Thus, salaries 
represent the main cost element of the grant.

In addition, marketing costs were generated by 
networking events organised for new companies to 
encounter successful entrepreneurs. New com‑
panies benefitted from these events as business 
opportunities arose at a later stage.

58
See the Commission reply to paragraph 22 on the 
better result‑orientation under the 2014–20 com‑
mon provision regulation.

The Commission stresses that also in the 2014–20 
period, reporting to the Commission on results 
does not relate to every individual project, but to 
aggregated results for a programme/axis.

60
The Commission points out that the details of the 
reporting obligations of the beneficiaries, includ‑
ing on quantitative and qualitative targets and 
considerations of the cost of the data generation 
and reporting vs the volume of support, are under 
shared management defined by the Managing 
Authority in line with the OP and its objectives.

Conclusions and recommendations

64
The Commission welcomes the Court’s assessment. 
The Commission considers that the effectiveness of 
the ERDF support to e‑commerce projects allows 
increasing the availability of business services 
online. The new regulations for the European Struc‑
tural and Investment Funds (ESIF) for the 2014–20 
period address the issue of monitoring at program‑
ming level by strengthening the result orientation 
and intervention logic by introducing ex ante condi‑
tionalities. In the case of e‑commerce investments, 
a specific ex ante conditionality is required in the 
form of a strategic policy framework for digital 
growth.

65
The regulations governing the 2007–13 pro‑
grammes do not include requirements for standard‑
ised indicators being used for monitoring purposes. 
In addition, there is no core indicator specifically 
for e‑commerce allowing for specific performance 
monitoring.

Reply of the Commission 

34

Recommendation 1
For the 2007–13 period, the Commission requires 
the Managing Authorities to report on the imple‑
mentation of the programmes in line with the 
applicable ERDF regulations.

However, the 2014–20 ESIF programmes will put 
a stronger emphasis on results based on targets. 
At priority axis level the indicators will capture the 
overall performance in the axis, but not the individ‑
ual performances of all types of action that might 
be included in that axis.

Recommendation 1 (a)
The Commission accepts to assess the relevance of 
the result indicators proposed, both when approv‑
ing the OPs and subsequent amendments.

Recommendation 1 (b)
The Commission accepts the recommendation.

In the period 2014–20, as part of the reinforcement 
of the result orientation, programmes are asked to 
clearly identify common and programme specific 
output indicators (with target values), and result 
indicators that will measure the progress towards 
the change sought through investment (with base‑
lines and target values). Information on the pro‑
gress in programme implementation will be shared 
with the Commission on an annual basis (from 2016 
onwards) allowing tracking over time. This informa‑
tion will be structured, allowing analysis, compari‑
son and aggregation and it is also the Commission’s 
intention to publish these data.

Recommendation 1 (c)
The Commission partly accepts this 
recommendation.

Moreover, if a Member State requests a programme 
amendment, it is necessary to revisit also the cor‑
responding indicators in the programme.

Secondly, although guidance was provided6 to the 
responsible authorities by the Commission on the 
principles of the categorisation information sys‑
tem, the classification of expenditure remains the 
responsibility of the Managing Authority

The Commission points out the experimental 
character of the initiative ‘ICT Innovation voucher 
scheme’. The experience gained so far in the 
regions suggests that there is a real need for such 
an initiative in order to foster SMEs demand. In view 
of the limited time of implementation, no result 
indicators are available to date. This information will 
be made available to the Commission at the next 
monitoring committees schedule for mid‑2015.

66
The Commission considers that the new ESIF regula‑
tion provides a better performance and result orien‑
tation framework for 2014–20 period.

In particular the ‘guiding principles for selection’ 
of operation, as part of OPs, are carefully scruti‑
nised by the Commission in the negotiation of the 
ESIF programmes for the 2014–20 period to ensure 
that they fit the specific objectives and types of 
operations.7

67
The Commission welcomes the Court’s assessment.

6   2009 Guidance note http://ec.europa.eu/employment_social/

sfc2007/quick‑guides/sfc2007_reporting_categorisation_data_
Note_Art_11.pdf ‑
 Q&A first issued in 2009 and revised in 2012 http://ec.europa.eu/
employment_social/sfc2007/quick‑guides/categorisation_faq_
rev201202.pdf ‑ ‘A common sense use of the codes is encouraged, 
including the use of national conventions or definitions where 
available. … The Commission has not proposed harmonised 
definitions, but is happy to offer its opinion on any questions that 
arise.

7   Art 96(2)b CPR:(iii) a description of the type and examples of 
actions to be supported under each investment priority and 
their expected contribution to the specific objectives referred 
to in point (i) including the guiding principles for the selection 
of operations and where appropriate, the identification of main 
target groups, specific territories targeted, types of beneficiaries, 
the planned use of financial instruments and major projects;

 
Reply of the Commission 

35

The Commission agrees on the importance of moni‑
toring the impact of grants. However, the indicators 
chosen for tracking progress and impact will not be 
standard. They will depend on the specific objec‑
tives of each OP. The indicators to be used reflect 
the variety of needs and political responses of 
regions/MS.

However, a strategic policy framework for digital 
growth includes standard indicators to measure 
progress of interventions in ICT areas, as foreseen in 
ex ante conditionality 2.1 of Annex XI of the com‑
mon provision regulation.

Recommendation 2
The Commission accepts the recommendation and 
will request appropriate measures to be taken by 
the Member States.

The ‘guiding principles for the selection of opera‑
tions’ and ‘output indicators, including the quantified 
target value’ have to be part of the 2014–20 ESIF 
programmes and are subject to the negotiations 
with the Commission. The type of selection princi‑
ples and detailed selection criteria will depend on 
the specific objective and context of the co‑funded 
investment.

Member States with identified weaknesses in those 
areas are requested to describe in the programme 
(ex ante conditionality, action plan) what actions the 
authorities are planning to take in order to improve 
project selection procedures and administrative 
burden to beneficiaries. Where relevant, Member 
States are encouraged to use technical assistance 
in a proactive and focused way for envisaged 
improvements.

In addition, the Commission will advise Managing 
Authorities to include the recommendations of 
the European Court of Auditors into the selection 
process and selection criteria of digital growth 
projects.

The Commission notes that this recommendation is 
addressed to the MS and stresses that details should 
be appropriate in the specific context of each OP.

Recommendation 2 (a)
The Commission raises such issues in the context of 
the negotiations of the draft ESIF programmes that 
have to include information on the selection princi‑
ples of operations. The type of selection principles 
and detailed selection criteria will however depend 
on the specific objective, the type and volume of 
intervention and context of the investment. This 
may not in all cases of e‑commerce support lead to 
the requirement of the presentation of a business 
plan.

Recommendation 2 (b)
The Commission agrees that the ERDF contribution 
to the project should be based on a cost–benefit 
analysis which demonstrates the financial viability 
of the project. This is a subject of selection require‑
ment set by the monitoring committees in Member 
States.

Recommendation 2 (d)
The Commission promotes the internationalisation 
of SMEs, as internationally active SMEs create more 
jobs and are more innovative than SMEs that only 
operate in their national market8. The 2014–20 ESIF 
regulations therefore also encourage the coopera‑
tion beyond the OP territory (see Art.70(2) common 
provisions regulation). Whether specific incentives 
for cross‑border dimensions in projects are appro‑
priate has however to take into account the specific 
objectives and types of actions in a programme.

8  http://ec.europa.eu/enterprise/policies/sme/market‑access/
internationalisation/index_en.htm#h2‑5.

Reply of the Commission 

36

Recommendation 3 (a)
The Commission accepts the recommendation. The 
2014–20 legal framework requires result indicators 
in the programmes at the priority axis level and 
output indicators at operations level during the 
programming period.

Recommendation 3 (b)
The Commission agrees in principle, but in practice 
cannot accept the recommendation. The results 
of an e‑commerce projects can be influenced by 
external factors that cannot be known in advance 
Linking ERDF payments for e‑commerce with results 
would be challenging for this reason.

Recommendation 3 (c)
The Commission accepts the recommendation to 
require Member States to put in place the neces‑
sary checks and controls ensuring that the data 
entered into the monitoring systems are reliable 
and consistent.

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In recent years, the EU has co-financed 
e-commerce projects in the context of its 
cohesion policy with the support of the 
European Regional Development Fund. In this 
report, the European Court of Auditors assesses 
whether e-commerce projects were successful in 
supporting ICT uptake by SMEs by auditing 
a sample of EU co-financed e-commerce projects 
in Greece, Italy, Poland and the United Kingdom.

The Court concludes that the ERDF support to 
e-commerce projects contributed to increasing 
the availability of business services online. 
However, it also concludes that shortcomings in 
the monitoring made it impossible to assess to 
what extent it contributed to the achievement of 
the EU and Member States’ ICT strategies as well 
as SMEs’ development objectives.

EUROPEAN
COURT
OF AUDITORS