REPLIES OF THE COMMISSION TO THE SPECIAL REPORT OF THE EUROPEAN COURT OF AUDITORS "ERRORS IN RURAL DEVELOPMENT SPENDING: WHAT ARE THE CAUSES, AND HOW ARE THEY BEING ADDRESSED?"
Date: 2015-02-05
Institutions: European Commission
Subjects: aid system, aid to agriculture, audit, cost analysis, financial management, public contract, rural development













EUR-Lex - 52015DC0051 - EN











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52015DC0051

REPLIES OF THE COMMISSION TO THE SPECIAL REPORT OF THE EUROPEAN COURT OF AUDITORS "ERRORS IN RURAL DEVELOPMENT SPENDING: WHAT ARE THE CAUSES, AND HOW ARE THEY BEING ADDRESSED?" /* COM/2015/051 final */









REPLIES OF THE
COMMISSION TO THE SPECIAL REPORT TO THE EUROPEAN COURT OF AUDITORS
"ERRORS IN RURAL DEVELOPMENT
SPENDING: WHAT ARE THE CAUSES, AND HOW ARE THEY BEING ADDRESSED?"

Executive summary

II. The Commission welcomes the
Court's report on the analysis of the root causes of errors which summarizes
the results of the last three years of Statement of Assurance exercise and
largely confirms the main conclusions already drawn by the Commission in its
Staff Working Document on the assessment of root causes of errors in the
implementation of rural development policy and corrective actions presented to
the European Parliament and Council in June 2013[1]. 
The Court reports an average
error rate 2011-2013 for rural development of 8.2%. Nevertheless, the Commission
notes the slight downward development in the error rate for EAFRD (8.4% in 2011
to 7.9% in 2013).
This error rate is higher than
the individual rates published annually by the ECA in chapter 4 of the annual
report. The reason is that the present analysis covers 461 transactions out of
532 in total for the three years (which include health, environment and fishery
policies). The 71 transactions not concerned by this report have a lower
average error rate. The Commission also notes that the Court defines the sample
and calculates on a yearly basis the error rate at policy level (rural
development, environment, fisheries and health).
The rural development represents
90% of the policy expenditure and it is generally more prone to errors than
other areas in the policy group. The complexity of some eligibility
requirements in the rural development measures played an important role in the
high level of error rates.
III. Since 2012, the Commission
has been addressing the issue of high error rate by requesting national action
plans from the Member States (MS) and monitoring their implementation. Based on
experience gained and on recommendations from the Court of Auditors, these
action plans have been improved over time. 
The expected results of all the
actions will not always be evident in the short-term, especially for measures
implemented through multiannual commitments. Nevertheless, the first results of
the joint efforts to reduce error rates through the implementation of the
action plans can already be seen in a lower error rate for rural development in
2013.
The Commission will keep on
monitoring the implementation of the action plans, both from the audit and
operational perspectives, through bilateral meetings, monitoring committees and
annual review meetings.
V. The Commission has also found
weaknesses regarding the public procurement in its own audits. Substantial
financial corrections have already been made in this respect. 
Public procurement is one of the
central elements in the action plans for rural development.
Nevertheless, it should be noted
that the non-compliance with procurement rules does not necessarily mean that
100% of the expenses involved are ineligible. The project as such may well
achieve its goal and provide real added value.
For the period 2014-2020, the
Commission has already presented guidance for practitioners on the avoidance of
common errors in European Structural and Investment Funds projects. These
guidelines were presented to the Managing Authorities and Paying Agencies at
the Seminar on Error Rate that took place in October 2014.
VI. Substantial shortcomings
regarding the measure supporting the processing of agricultural products are
followed-up in the audit conformity procedures.
As regards intentional
infringements, the Commission is implementing an Anti-Fraud Strategy,
organising dedicated seminars in several Member States.
The Commission shares this
conclusion.
The Commission will continue
providing the Member States with the recommendations and guidelines, as well as
disseminating best practices to improve the control system in order to avoid
errors.
Furthermore, the Paying Agencies
must comply with the accreditation criteria laid down in Annex I of Regulation
907/2014 (programme 2014-2020) before any payments are made. Commission
services reviews the accreditation through ex-post audits.
VIII. As regards limited
incentives for beneficiaries to comply with farming commitments,
agri-environmental schemes reflect voluntary commitments by farmers to provide
environmental benefits and public goods which go beyond the mandatory
requirements. The compensatory nature of agri-environment payments (covering
costs incurred and income foregone) does not imply immediate economic benefits
for the farmers, although these are not excluded in the longer run.
As regards the "low"
control rate for commitments, according to the legislation in force, where
on-the-spot checks reveal a significant non-compliance, the Member State is obliged to increase the percentage of beneficiaries to be checked on-the-spot.
The correct application of this is verified during the Commission conformity
audits.
The control rate for farming
commitments is established at 100% for the administrative checks and 5% for the
on-the-spot checks. The costs of management and controls published in the 2013 AAR amount to EUR 4 billion for the whole CAP. Therefore, the emphasis should be put on the
improvement of effectiveness of the controls and not on their increase.
As regards the sanctions, the
Commission considers that while sanctions for non-compliance have to be
proportionate they shall remain a dissuasive tool.
IX. The establishment of the
action plans was conceived as a preventive process based on the Staff Working
Document (2013) 244, built on the self-assessment of the Member States of the
root causes that had an impact on the error rates. This process has
progressively incorporated the reactive perspective, systematically taking into
account the audit findings and proposing specific corrective actions. The
double perspective (preventive and reactive) is still part of the exercise. The
last update of the action plans shows that almost 50% of the actions were
triggered by concrete audit findings of the Court or the Commission, whilst the
other half were based on self-assessment of the Member States. 
Furthermore, the ex-ante
assessment on the verifiability and controllability of all measures included in
the RDPs 2014-2020 also address the risk of error rate from a preventive
perspective.
X. The Commission shares the view
that it is important to strike an appropriate balance between the number and
complexity of rules on the one hand, while guaranteeing the legality and
regularity of expenditure.
XI.
(a) The Commission
accepts the recommendation. The specific issues raised by the Court should only
be dealt with in the action plans if shortcomings have been identified. The
Commission recognises the importance of guidance related to the three root
causes of errors and dissemination of best practices. This will be dealt with
through the European Network for Rural Development and the seminars.
Furthermore, the
Commission has already presented to Member States specific guidance on public
procurement and Agro-Environment-Climate measure, including double financing.
 Intentional
circumvention of rules is part of the Anti-fraud strategy and the seminars
organised thereof in several Member States. 
(b)
The Commission accepts this recommendation. The Commission is currently
assessing the controllability and verifiability of the new programmes and will
raise any shortcoming in the framework of the Monitoring Committees and Annual
Review meetings with the Managing Authorities.
Moreover,
audit findings will be closely followed in order to detect and correct any
source of error attributable to the national implementing rules, requesting
immediate modifications if needed. 
Lessons
drawn from the implementation of the programmes and national rules thereof,
will be shared through the ENRD and dedicated seminars on error rates. 
(c)
The Commission partially accepts the recommendation as it cannot prejudge the
scope and the result of such analysis or future policy choices by the
legislators for the next programming period. 
In
2017 the Commission will prepare a strategic report of the Fund, summarizing
the annual progress reports submitted by Member States (Article 53 Regulation
1303/2013). Furthermore, the Commission and the Member States will assess the
performance of the RDPs during the review process foreseen under Article 21
Regulation 1303/2013. In the light of these and other evidences (e.g. audit
findings), the Commission will assess the policy conception and the eventual
need to make proposals for the following programming period.
At
the end of the programming period, the Commission will make a thorough analysis
of the continued need for each support measure before making a proposal for the
following programming period as has been done for the present period.
The
Commission agrees that administrative checks should be used when possible,
although it notes that in most cases this is not feasible for agro-environment
operations.

Introduction

1. The EU allocated 96 billion
and contribution of the MS is expected at 55bn.
4. The Court reports an average
error rate 2011-2013 for rural development of 8.2%. Nevertheless, the
Commission notes the slight downward development in the error rate for EAFRD (8.4%
in 2011 to 7.9% in 2013).
This error rate is higher than
the individual rates published annually by the ECA in chapter 4 of the annual
report. The reason is that the present analysis covers 461 transactions out of
532 in total for the three years (which include health, environment and fishery
policies). The 71 transactions not concerned by this report have a lower
average error rate. The Commission also notes that the Court defines the sample
and calculates on a yearly basis the error rate at policy level (rural
development, environment, fisheries and health).
The rural development represents
90% of the policy expenditure and it is generally more prone to errors than
other areas in the policy group. The complexity of some eligibility
requirements in the rural development measures played an important role in the
high level of error rates.
5. Error rates do not necessarily
imply that policy objectives are not attained, which could only be stated by
assessing the performance of the operations supported. To achieve the policy
goals of the rural development policy a certain degree of complexity in the
implementation of the policy is unavoidable taking into account the ambitious
objectives of rural development (RD). In view of this, it has to be recognised
that it will be very difficult to reach a 2% or lower error rate without
deploying unreasonable control resources at a prohibitive cost.

Types and prevalence of errors found

12. As regards the types of
errors indicated by the Court, it should be noted that during its own audits of
investment measures and area-related schemes the Commission found shortcomings
similar to those detected by the Court of Auditors. Financial corrections have
been imposed on the Member States concerned (or conformity clearance procedures
are underway with a view to making such corrections) in order to protect the EU
budget. Furthermore, where the shortcomings were found, Member States concerned
were required to take remedial actions.
14. The rural
development policy is implemented through a national or regional rural
development programme. The majority of errors relates to the specific
conditions laid down in the programmes and other national rules. These are
necessary for the implementation of the policy, but the challenge for the
Member States is to limit these national rules to the strict necessary for
achieving the policy goals. 
For the programming period
2014-2020 all rural development programmes are required to include an ex-ante
assessment on the verifiability and controllability of the measures, conducted
jointly by the Managing Authority and the Paying Agency.
26. During its own audits the
Commission also found shortcomings regarding the public procurement procedures.
Financial corrections have already been made in this respect. 
Public procurement is one of the
central elements in the action plans for rural development.
Nevertheless, it should be noted
that the non-compliance of procurement does not necessarily mean that 100% of
the expenses involved are ineligible. The project as such may well achieve its
goal and provide real added value. 
Moreover, on 19/12/2013, the
Commission adopted new guidelines for determining financial corrections to be
made to expenditure financed under the shared management, for non-compliance
with the rules on public procurement[2]. According to these
guidelines, the non-respect of procurement rules is to be judged based on the
principle of proportionality.
A guidance document on most
common irregularities in the management of European Structural and Investment
Funds has already been presented to Member States (4th Seminar Error
Rate, Oct 2014).
27. As regards Table 1: 
Romania: the reported error
was detected by ECA in the DAS 2012.  The RO Error Rate Action Plan includes
measures to address weaknesses in public procurement procedures. 
The Netherlands: procurement rules
were retroactively withdrawn by the province in 2012 with effect from 1 January
2010. However, this should not have been applied in this case. The Commission
is following it up with the Member State.
Germany (Brandenburg-Berlin): As the last
commitments for broadband could be made in 2012, no further preventive and
corrective actions could be implemented. Support for broadband is no longer
foreseen for the period 2014-2020.
Box 2 ‑
Contracts awarded directly to existing suppliers
Sweden has included
"public procurement" as root cause of errors and corrective and
preventive actions in its error rate action plan.
32. The weaknesses listed in
Table 2 are covered in the respective action plans aiming at improving the
administrative control system.
35. The Commission shares the
view that simplification should not hamper the principles of sound financial management.

The new legal framework for CAP
2014-2020 contains simplification factors which
do not adversely impact the sound financial management (e.g., lump sum
payments, standard costs). Art 60 of R1305/2013 establishes that only
expenditure for investments that has been incurred after the application for
support shall be eligible.
Box 3 ‑
Example of withdrawing an effective eligibility criterion
These weaknesses are
covered in the respective action plans aiming at improving the administrative
control system.
This
is no longer possible under the new legal framework. See reply to point 35.
38. The lump sum payment, as in
the case of young farmers support, may not respond to other measures' policy
objectives. Therefore, simplification in the implementation must ensure an
adequate balance with the achievement of the policy objectives and sound
financial balance. The benefit on the reduction of the error rate should not be
the only factor to be taken into account.
40. The Commission
would like to point out that the fraudulent expenditure for rural development
detected and reported by Member States amounts to 0.11%[3].
43. During its own audits the
Commission also found weaknesses in the verification of Small and Medium
Enterprises (SME) criterion and non-respect of appropriate private procurement
procedures. Where shortcomings were found, net financial corrections have been
imposed on the Member States concerned (or conformity clearance procedures are
underway with a view to making such corrections) in order to protect the EU
budget. Furthermore, Member States concerned were required to take remedial
actions.
In the current legal framework
2014-2020, there are no limits for the size of the company in order to become
beneficiary of support under investment for physical assets. Member States can
target the support to specific beneficiaries following conclusions of the SWOT
and needs assessment. These further requirements will have to be controllable
and verifiable. 
46. Similar provisions will be
applicable during the period 2014-2020.
48. The Commission shares the
view that the national authorities could potentially have detected many of the
errors found by the Court. The CAP rules provide the Member States with all
necessary instruments to mitigate most of the risks of errors. 
The Commission will continue
providing the Member States with the recommendations and guidelines, as well as
disseminating best practices to improve the control system in order to avoid
errors.
Box 5 ‑
Examples of insufficient quality of Member State authorities' checks
These weaknesses are
covered in the respective action plans aiming at improving the administrative
control system.
51. During its own audits the
Commission also found weaknesses on the conduct of administrative checks.
Member States concerned were required to take remedial actions and financial
corrections have been imposed, when appropriate. 
57. During its own audits the
Commission also found weaknesses in the verification of agri-environment
commitments and Member States concerned were required to take remedial actions.
In addition financial corrections have been imposed to the Member States
concerned, when appropriate. 
Box 7 ‑ Examples
of non-respect of simple agri-environment commitments
The deficiencies in Malta are largely due to the fact that beneficiaries of agri-environment measure support do
not respect the commitments. Maltese administration has undertaken many
targeted information actions and has provided one-on-one trainings for certain
beneficiaries.
59. Agri-environmental schemes
reflect voluntary commitments by farmers to provide environmental benefits and
environmental public goods which go beyond the mandatory requirements. The
compensatory nature of agri-environment payments (covering costs incurred and
income foregone) does not imply immediate economic benefits for the farmers,
although these are not excluded in the longer run.
62. As regards the
"low" control rate for agri-environment commitments, according to the
applicable legal acts, when on-the-spot checks reveal a significant
non-compliance in the context of a given aid scheme or support measure or in a
region or part of a region, the Member State is obliged to increase the
percentage of beneficiaries to be checked on-the-spot.
Depending on the Member State and the individual measure, the actual on-the-spot check rate could be higher
than 5 %. The correct application of this is verified during the conformity
audits carried out by the Commission. 
All eligibility criteria,
commitments and other obligations must be checked during the on-the-spot check.
If any of these can't be checked at the moment of the on-the-spot check, a
second visit shall be organised. 
63. According to the applicable
legal acts, administrative checks shall cover all elements that are possible
and appropriate to control by administrative means (including the respect of
agri-environment commitments). 
During its conformity audits the
Commission also verifies whether the checks could be done in an administrative
way in addition to the on-the-spot. Where appropriate, recommendations to the
Member States are issued and financial corrections are applied.
Moreover, a new legal framework
for CAP 2014-2020 contains provisions requiring the Member States to ensure
that all the rural development measures that they intend to implement are
verifiable and controllable. An ex-ante assessment of the verifiability and
controllability of the measures has to be included in the rural development
programme.
64. The Commission considers that
while sanctions for non-compliance have to be proportionate, they shall remain
a dissuasive tool.
Under the new legal framework,
the re-occurrence must be also taken into account when calculating the
reduction. It is up to the Member States to define the actual application of
the criteria included in the legal texts, as well as the concrete rates and
amounts thereof. 
65. In case of serious non
compliances with the commitments, the beneficiary shall be excluded from
support during the year of the finding and the next one. 
Box 10 ‑
Additional eligibility conditions imposed by Member States for LFA payments
These weaknesses are
covered in the respective action plans aiming at improving the administrative
control system.
74. Since 2012, the Commission
has been addressing the issue of the high error rate by requesting national
action plans from the Member States and monitoring their implementation. Based
on the experiences gained and recommendations from the Court of Auditors, these
action plans have been improved over time. 
The expected results of all the
actions will not always be evident in the short-term, especially for measures
implemented through multiannual commitments. Nevertheless, the first results of
the joint efforts of the Commission and the Member States to reduce error rates
through the implementation of the action plans can already be seen in a lower
error rate for rural development in 2013.
The Commission will keep on
monitoring the implementation of the action plans, both from the audit and
operational perspective, through bilateral meetings, monitoring committees and
annual review meetings.
75. Commission's powers have been
strengthened with the new CAP Regulation (EU) No 1306/2013. Article 41 (2)
provides that interim payments to the Member State may be suspended or reduced
when it is found that key components of the national control system are not
effective or when the necessary remedial measures have not been implemented.
Article 36 (7) provides for the interruption of interim payments as a first
quick and reactive tool in case of concerns on the legality and regularity of
payments.
Furthermore, in order to avoid
financial corrections, each paying agency for which reservations have been made
in DG AGRI's annual activity report, will have to act promptly.
The
Commission considers that while sanctions for non-compliance have to be
proportionate, they shall remain a dissuasive tool. 
76. Audit findings were more
systematically followed-up in the latest updates of action plans (September
2014). The Member States had to take into account the Court's and the
Commission’s audit findings to a much larger extent. Indeed, 46% of the actions
presented by Member States addressed concrete audit findings, 50% of which came
from the Court's reports.  
 It should also be noted that all
material cases reported by the Court are followed-up by the Commission,
including through conformity procedure, if appropriate.
77. In the framework of the third
update of the action plans in September 2014, the Member States were requested
to provide monitoring indicators and latest known results in order to improve
the efficiency of the actions.
78. The 4 joint Committee
meetings for Rural Development and Agricultural Funds dedicated exclusively to
the Error Rates (the Seminars) organised so far, have been a systematic process
by which the sharing of good and innovative practices has taken place. In
addition, it should be noted that outside the framework of the seminars and the
ENDR activities, an exchange of best practices also takes place in the formal
meetings of the Rural Development Committee and during the three annual
meetings of the directors of the paying agencies of all the Member States
As from 2015, the European
Network for Rural Development (ENRD) will be another means by which best practices
will be disseminated during the 2014-2020 period. The ENRD will organise
specific events, share relevant information and involve the stakeholders in
aware raising initiatives. 
79. The Commission ensures
regular exchanges with the Member States on error-rate related issues and has
provided a comprehensive set of guidance documents on rural development
measures and other relevant horizontal topics (e.g. simplified cost options,
public procurement rules). 
In particular, the SWD (2013) 244
on error rates in rural development included a common set of root causes that
could eventually be relevant in all Member States, who ultimately should define
by which ones they are affected, establishing the adequate mitigating actions.
80. Deficiencies evidenced
through audit findings are being followed-up by the Commission and the Member
States are systematically requested to address them in the action plans. 
81. The fact that Member States
have carried out an ex-ante assessment on the verifiability and controllability
of the measures (preventive), together with a closer follow-up of the audit
findings, will allow to improve the effectiveness of the action plans, as shown
in the October 2014 update.
90. The change referred to by the
Court was introduced because the cost of application of administrative
penalties for small amounts could be disproportionate compared to the benefits,
jeopardising therefore the sound financial management.
91. The Commission is fully aware
of the importance of the subsequent steps of the regulatory process. In this
respect the responsibilities of the Member States have been enhanced by
requiring an ex-ante assessment by both Managing Authorities and Paying
Agencies of the verifiability and controllability of the measures programmed.
Moreover, the Commission disposes now of reinforced preventive tools such as
suspensions and interruptions, which should have a deterrent effect on errors.
As confirmed by the Court in this
Special Report, gold-plating (additional and unjustified national/regional rules)
has only a marginal impact to the error rate. 
93. Since 2012, the Commission
has been addressing the issue of the high error rate by requesting national
action plans from the Member States and monitoring their implementation. Based
on the experiences gained and recommendations from the Court of Auditors, these
action plans have been improved over time. 
The expected results of all the
actions will not always be evident in the short-term, especially for measures
implemented through multiannual commitments. Nevertheless, the first results of
the joint efforts of the Commission and the Member States to reduce error rates
through the implementation of the action plans can already be seen in a lower
error rate for rural development in 2013.
The Commission will keep on
monitoring the implementation of the action plans, both from the audit and
operational perspectives, through bilateral meetings, monitoring committees and
annual review meetings.
95.
First indent:
The Commission has also found
weaknesses regarding these issues in its own audits. Substantial financial
corrections have already been made in this respect. 
Public procurement and
non-respect of commitments are central elements in the action plans for rural
development.
Nevertheless, it should be noted
that the non-compliance with procurement rules does not necessarily mean that
100% of the expenses involved are ineligible. The project as such may well
achieve its goal and provide real added value.
Second indent:
The Commission shares this
conclusion.
The Commission will continue
providing the Member States with the recommendations and guidelines, as well as
disseminating best practices to improve the control system in order to avoid
errors.
Furthermore, the
Paying Agencies must comply with the accreditation criteria laid down in Annex
I of Regulation 907/2014 (programme 2014-2020) before any payments are made.
Commission services reviews the accreditation through ex-post audits.
96. As regards limited incentives
for beneficiaries to comply with farming commitments, agri-environmental
schemes reflect voluntary commitments by farmers to provide environmental
benefits and public goods which go beyond the mandatory requirements. The
compensatory nature of agri-environment payments (covering costs incurred and
income foregone) does not imply immediate economic benefits for the farmers,
although these are not excluded in the longer run.
As regards the "low"
control rate for commitments, according to the legislation in force, where
on-the-spot checks reveal a significant non-compliance, the Member State is obliged to increase the percentage of beneficiaries to be checked on-the-spot. 
The correct application of this is verified during the Commission conformity
audits.
The control rate for farming
commitments is established at 100% for the administrative checks and 5% for the
on-the-spot checks. The costs of management and controls published in the 2013 AAR amount to EUR 4 billion for the whole CAP. Therefore, the emphasis should be put on the
improvement of effectiveness of the controls and not on their increase.
As regards the sanctions, the
Commission considers that while sanctions for non-compliance have to be
proportionate they shall remain a dissuasive tool.
97. The establishment of the
action plans was conceived as a preventive process based on SWD (2013) 244,
built on the self-assessment of the Member States of the root causes that had
an impact on the error rates. This process has progressively incorporated the
reactive perspective, systematically taking into account the audit findings and
proposing specific corrective actions. The double perspective (preventive and
reactive) is still part of the exercise. The last update of the action plans
shows that almost 50% of the actions were triggered by concrete audit findings
of the Court or the Commission, whilst the other half were based on
self-assessment of the Member States. 
Furthermore, the ex-ante
assessment on the verifiability and controllability of all measures included in
the RDPs 2014-2020 also address the risk of error rate from a preventive
perspective.
Recommendation 1
The
Commission accepts the recommendation. The specific issues raised by the Court
should only be dealt with in the action plans if shortcomings have been
identified. 
The Commission recognises
the importance of guidance related to the three root causes of errors and
dissemination of best practices. This will be dealt with through the European
Network for Rural Development and the seminars.
Furthermore, the
Commission has already presented to Member States specific guidance on public
procurement and Agro-Environment-Climate measure, including double financing. 
Intentional
circumvention of rules is part of the Anti-fraud strategy and the seminars
organised thereof in several Member States. 
Public procurement
The
recommendation is addressed to the Member States. 
Nevertheless
the Commission would like to underline that for the 2014-2020 period, it has
already presented guidance for practitioners on the avoidance of common errors
in European Structural and Investment Funds projects. These guidelines were
presented to Managing Authorities and Paying Agencies in the Seminar on Error
Rate that took place in October 2014.
Intentional circumvention of rules
The
Commission agrees with the recommendation which is addressed to the Member
States.
Agri-environment payments
The Commission agrees with the
recommendation which is addressed to the Member States and would like to
underline that during its conformity audits it systematically verifies whether
administrative checks could be carried out in addition to the on-the-spot ones.
If that is the case, recommendations to the Member States are issued to
increase the scope of administrative checks and financial corrections are
applied.
Moreover,
the legal framework for 2014-2020 CAP contains provisions requiring the Member
States to ensure that all the rural development measures to be implemented are
verifiable and controllable. 
All RDPs must include
an ex-ante assessment on the verifiability and controllability of the measures,
including Agro-Environment-Climate measures, operations and concrete
commitments. If these controls are not satisfactory, the RDP must be modified
accordingly (Art 62 R1305/2013). Furthermore, full reduction of support is
foreseen in case of serious non-compliance with commitments or breach of
eligibility criteria as well as exclusion of the beneficiary from receiving
support during the year of the finding and the following one.
As regards the
sanctions, the Commission shares the view that while sanctions for
non-compliance have to be proportionate they shall remain a dissuasive tool.
Recommendation 2
The
Commission accepts this recommendation. The Commission is currently assessing
the controllability and verifiability of the new programmes and will raise any
shortcoming in the framework of the Monitoring Committees and Annual Review
meetings with the Managing Authorities.
Moreover,
audit findings will be closely followed in order to detect and correct any
source of error attributable to the national implementing rules, requesting
immediate modifications if needed. 
Lessons
drawn from the implementation of the programmes and national rules thereof,
will be shared through the ENRD and dedicated seminars on error rates. 
Recommendation 3
The
Commission partially accepts the recommendation as it cannot prejudge the scope
and the result of such analysis or future policy choices by the legislators for
the next programming period. 
In
2017 the Commission will prepare a strategic report of the Fund, summarizing
the annual progress reports submitted by Member States (Article 53 Regulation
1303/2013). Furthermore, the Commission and the Member States will assess the
performance of the RDPs during the review process foreseen under Article 21
Regulation 1303/2013. In the light of these and other evidences (e.g. audit
findings), the Commission will assess the policy conception and the eventual
need to make proposals for the following programming period.
At
the end of the programming period, the Commission will make a thorough analysis
of the continued need for each support measure before making a proposal for the
following programming period as has been done for the present period.
Last bullet:
The Commission agrees that
administrative checks should be used when possible, although it notes that in
most cases this is not feasible for agro-environment operations.
[1]        SWD(2013) 244 of 27.06.2013
[2]         Commission
Decision C(2013)9527
[3]         Report
from the Commission to the European Parliament and the Council: Protection of
the European Union's financial interests – Fight against fraud 2013 Annual
Report COM(2014) 474 final