COMMISSION STAFF WORKING DOCUMENT Methodology regarding the statistical evaluation of reported irregularities for 2015 Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Protection of the European Union's financial interests - Fight against Fraud 2015 Annual Report
Date: 2016-07-14
Institutions: European Anti-Fraud Office, European Commission
Subjects: EU expenditure, EU programme, EU statistics, fight against crime, financial control, fraud, fraud against the EU, own resources, statistical method

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 14.7.2016  SWD(2016) 237 final   COMMISSION STAFF WORKING DOCUMENT Methodology regarding the statistical evaluation of reported irregularities for 2015 Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL  Protection of the European Union's financial interests - Fight against Fraud 2015 Annual Report {COM(2016) 472 final} {SWD(2016) 234 final} {SWD(2016) 235 final} {SWD(2016) 236 final} {SWD(2016) 238 final} {SWD(2016) 239 final}  
 
 
TABLE OF CONTENTS 

COMMISSION  STAFF  WORKING  DOCUMENT  Methodology  regarding  the  statistical 
evaluation of reported irregularities for 2015 

1. 

1.1. 

1.2. 

INTRODUCTION........................................................................................................ 4 

The legal framework for irregularity reporting ............................................................ 5 

Expenditure – the reporting obligation and derogations .............................................. 7 

1.2.1.  The reporting obligation ............................................................................................... 7 

1.2.2.  Derogations to the reporting obligation ....................................................................... 8 

1.3. 

Revenue – Traditional Own Resources ........................................................................ 8 

1.3.1.  Monitoring of the establishment and recovery of TOR ............................................... 9 

1.3.2.  Commission’s inspection ........................................................................................... 10 

1.3.3.  Particular cases of Member State failure to recover TOR ......................................... 10 

1.3.4.  Detection and reporting .............................................................................................. 10 

1.3.5.  Classification of cases as fraudulent or non-fraudulent ............................................. 10 

1.3.6.  Monetary values - estimated, established and recovered amounts ............................ 10 

1.3.7.  Categorisation of cases by amounts involved ............................................................ 11 

1.3.8.  Recovery .................................................................................................................... 11 

2. 

2.1. 

DEFINITIONS AND INDICATORS ........................................................................ 12 

Legal definitions......................................................................................................... 12 

2.1.1. 

Irregularity.................................................................................................................. 12 

2.1.2.  Fraud .......................................................................................................................... 12 

2.1.3.  Suspected fraud .......................................................................................................... 13 

2.2. 

2.3. 

Definitions applied in the analysis ............................................................................. 13 

Indicators .................................................................................................................... 13 

2.3.1.  Fraud Detection Rate and Irregularity Detection Rate ............................................... 13 

2.3.2.  Fraud Frequency Level and Fraud Amounts Level .................................................... 14 

2.3.3.  Detection Efficiency ................................................................................................... 15 

2.3.4.  Reporting Efficiency .................................................................................................. 15 

2.3.5.  Ratio of Established Fraud ......................................................................................... 16 

2.3.6.  Error Rate ................................................................................................................... 16 

2.4. 

3. 

3.1. 

3.2. 

Assumptions and hypothesis ...................................................................................... 16 

READING GUIDE TO THE COUNTRY FACTSHEETS ....................................... 18 

Traditional own resources .......................................................................................... 18 

Natural resources ........................................................................................................ 18 

3.2.1.  Financial and audit information ................................................................................. 18 

3.2.2.  Data about reported irregularities ............................................................................... 19 

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3.2.3.  Anti-fraud activities indicators ................................................................................... 19 

3.3. 

Cohesion policy .......................................................................................................... 20 

3.3.1.  Financial and audit data ............................................................................................. 20 

3.3.2.  Data about reported irregularities ............................................................................... 21 

3.3.3.  Anti-fraud activities indicators ................................................................................... 21 

4. 

ABAC RECOVERY CONTEXT FOR DIRECT MANAGEMENT ........................ 22 

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1. 

INTRODUCTION 

This commission staff working document accompanies the Annual Report from the 
Commission  to  the  Parliament  and  the  Council  on  the  protection  of  the  European 
Union’s  financial  interests  and  the  fight  against  fraud  (further  referred  to  it  as 
‘Report’), adopted on the basis of article 325 of the Treaty on the Functioning of the 
European Union (TFEU). 

This document describes the main information sources on which the Report is based, 
the legal framework which foresees the obligation to submit them to the Commission 
and  the  methodology  followed  regarding  the  statistical  evaluation  of  irregularities 
reported  as  fraudulent  and  other  irregularities,  in  the  areas  where  Member  States 
implement  the  EU  budget  (expenditures  for  natural  resources,  cohesion  policy  and 
pre-accession funds), regarding the collection of the EU’s traditional own resources, 
as well as in the area of expenditure managed directly by the Commission. 

EU  legislation  requires Member  States  to  report  to  the  Commission,  on  a  quarterly 
basis, irregularities  that have  been  detected  in  the  areas  of  shared  management  and 
Traditional Own Resources1. 

Member  States  must  inform  the  Commission  whether  the  reported  irregularities 
constitute  suspicions  of  fraud  (if  they  give  rise  to  the  initiation  of  administrative 
and/or  judicial  proceedings  at  national  level  in  order  to  establish  the  presence  of 
intentional  behaviour,  such  as  fraud)  and  must  update  the  reported  information  in 
relation to the completion of the relevant proceedings for the imposition of sanctions. 

Regarding  expenditure  managed  directly  by  the  Commission,  it  is  the  Commission 
services  that  have  to  qualify2  the  recoveries  and  whether  they  encountered  errors, 
irregularities or suspected fraud. 

In relation to recoveries, preventive and corrective measures for the protection of the 
EU's  financial  interests,  the  analysis  presented  in  the  Report  is  limited  to  the 
information published in the EU's annual accounts. For this reason it mainly concerns 
interruptions,  suspensions  and  financial  corrections  by  the  Commission  vis-à-vis 
Member States, although, it also presents information concerning recoveries made. 

Data sources 

There are three main data sources used for the analyses in the Report: 

(1) 

Irregularities  reported  by  Member  States  under  a  specific  legal  obligation. 
These  are  described  in  detail  in  paragraph  1.1  to  1.3.  Irregularities  related  to 
expenditure  areas  of  the  budget  are  reported  via  an  IT  tool  known  as  the 
Irregularity  Management  System  (IMS),  managed  and  maintained  by  OLAF. 
Irregularities concerning Traditional Own Resources (TOR) are reported via an 
IT system known as OWNRES and managed and maintained by DG BUDG. 

(2)  Recovery  orders  recorded  in  the  Commission's  Accrual  Based  Accounting 
System (ABAC). Authorising Officers by Delegation specify whether a given 
recovery order is linked to an irregularity, a case of potential fraud (defined as 
'OLAF notified') or other. 

1 
2 

Provided they do not fall under the derogations specifically set out in the relevant provisions. 
According to the relevant budgetary and financial rules, an irregularity constitutes any infringement of 
regulatory and/or contractual provisions; where an irregularity gives rise to suspicion of fraud, OLAF 
must be notified. 

4 

 
                                                 
(3)  Annual Reports published by competent DGs in relation to expenditure and the 
Provisional  Accounts  of  the  EU  published  by  DG  BUDG,  in  particular  in 
relation  to  preventive  and  corrective  measures  (interruptions  and  suspensions 
of payments, financial corrections and recoveries). 

1.1. 

The legal framework for irregularity reporting 

European legislation provides for the protection of the Union’s financial interests in 
all areas of activity3. The Financial Regulation4 sets the principles and rules for the 
correct  implementation  of  the  budget.  Member  States  are  required  to  report  to  the 
European Commission (EC) evidence of fraud and other irregularities. This need is 
particularly evident in those sectors of the EU budget where the main responsibility 
for management is with the Member States, namely, in the field of Agriculture and 
Cohesion Policy (on the expenditure side) and Own Resources (on the revenue side). 
In  these  areas,  Member  States  must  inform  the  Commission  about  all  irregularities 
involving  more  than  EUR  10 000  of  EU  finances.  This  applies  at  all  stages  in  the 
procedure for recovering monies unduly paid or not received. 

Regulation No 1150/2000 specifies the requirement for the reporting of irregularities 
on the Traditional Own Resources. Furthermore, in 2015, the Commission adopted a 
package  of  four  delegated  and  four  implementing  regulations  on  the  reporting  of 
irregularity  provisions  in  the  area  of  shared  management  for  the  MFF  2014-2020. 
The  acts  entered  into  force  in  November  2015.  The  objective  is  to  improve  the 
quality and consistency of the information on irregularities and fraud reported by the 
Member  States  while  imposing  a  minimal  administrative  burden  on  the  national 
authorities. In particular: 

1. Commission Delegated Regulation (EU) 2015/1970 of 8 July 2015 supplementing 
Regulation  (EU)  No  1303/2013  of  the  European Parliament  and  of  the Council  with 
specific provisions on the reporting of irregularities concerning the European Regional 
Development Fund, the European Social Fund, the Cohesion Fund, and the European 
Maritime and Fisheries Fund5. 
2. Commission Delegated Regulation (EU) 2015/1971 of 8 July 2015 supplementing 
Regulation  (EU)  No  1306/2013  of  the  European Parliament  and  of  the Council  with 
specific  provisions  on  the  reporting  of  irregularities  concerning  the  European 

3 

4  

5  

See  in  particular  for  traditional  own  resources:  Article  6(5)  of  Council Regulation  (EC,  Euratom)  No 
1150/2000;  for  expenditure:  Articles  3  and  5  of  Council  Regulation  (EC)  No  1848/2006  of  14 
December  2006  (OJ  L  355,  15.12.2006)  for  Agriculture;  articles  3  and  5  of  Commission  Regulation 
(EC)  No  1681/94  of  11  July  1994  (OJ  L  178  of  12.7.1994),  as  amended  by  Regulation  (EC)  No 
2035/2005  of  12  December  2005  (OJ  L  328  of  15.12.2005)  for  the  Structural  Funds  until  the 
programming period 2000-2006 included; articles 3 and 5 of Regulation No 1831/94 of 26 July 1994 
(OJ L 191, 27.7.1994), as amended by Regulation (EC) No 2168/2005 of 23 December 2005 (OJ L 345 
of  28.12.2005)  for  the  Cohesion  Fund  until  the  programming  period  2000-2006  included;  articles  28 
and 30 of Commission Regulation (EC) No 1828/2006 of 8 December 2006 (OJ L 371, 27.12.2006) as 
amended by Commission Regulation (EC) No 846/2009 of 1 September 2009 (OJ L 250, 23.9.2009) for 
the Cohesion Policy 2007-2013; Articles 55 and 57 of Commission Regulation (EC) No 498/2007 of 26 
March 2007 (OJ L 120, 10.5.2007) as amended by Commission Regulation (EC) No 1249/2010 (OJ L 
341, 23.12.2010) for the European Fishery Fund (EFF). 
Regulation  No  2015/1929  amending  the  Regulation  (EU,  EURATOM)  No  966/2012  on  the  financial 
rules applicable to the general budget of the Union 
With respect to Cohesion Policy, Regulations Nos 1681/94 and 1831/94 for the programming periods 
until  the  2000-2006  and  Regulation  No  1828/2006  for  the  period  2007-2013  and,  Regulation  No 
498/2007 covering the European Fishery Fund (EFF) still apply for the previous programing period.  

5 

 
                                                 
Agricultural  Guarantee  Fund  and  the  European  Agricultural  Fund  for  Rural 
Development and repealing Commission Regulation (EC) No 1848/20066. 
3. Commission Delegated Regulation (EU) 2015/1972 of 8 July 2015 supplementing 
Regulation  (EU)  No  223/2014  of  the  European  Parliament  and  of  the  Council  with 
specific provisions on the reporting of irregularities concerning the Fund for European 
Aid to the Most Deprived. 
4. Commission Delegated Regulation (EU) 2015/1973 of 8 July 2015 supplementing 
Regulation  (EU)  514/2014  of  the  European  Parliament  and  of  the  Council  with 
specific provisions on the reporting of irregularities concerning the Asylum, Migration 
and Integration Fund and the instrument for financial support for police cooperation, 
preventing and combating crime, and crisis management. 
5. Commission Delegated Regulation (EU) 2015/1974 of 8 July 2015 setting out the 
frequency  and  the  format  of  the  reporting  of  irregularities  concerning  the  European 
Regional  Development  Fund,  the  European  Social  Fund,  the  Cohesion  Fund  and  the 
European Maritime and Fisheries Fund, under Regulation (EU) No 1303/2013 of the 
European Parliament and of the Council. 
6. Commission Delegated Regulation (EU) 2015/1975 of 8 July 2015 setting out the 
frequency  and  the  format  of  the  reporting  of  irregularities  concerning  the  European 
Agricultural  Guarantee  Fund  and  the  European  Agricultural  Fund  for  Rural 
Development, under Regulation (EU) No 1306/2013 of the European Parliament and 
of the Council. 
7. Commission Delegated Regulation (EU) 2015/1976 of 8 July 2015 setting out the 
frequency  and  the  format  of  the  reporting  of  irregularities  concerning  the  Fund  for 
European  Aid  to  the  Most  Deprived,  under  Regulation  (EU)  No  223/2014  of  the 
European Parliament and of the Council. 
8. Commission Delegated Regulation (EU) 2015/1977 of 8 July 2015 setting out the 
frequency  and  the  format  of  the  reporting  of  irregularities  concerning  the  Asylum, 
Migration  and  Integration  Fund  and  the  instrument  for  financial  support  for  police 
cooperation,  preventing  and  combating  crime,  and  crisis  management,  under 
Regulation (EU) No 514/2014 of the European Parliament and of the Council. 

However,  the  following  Regulations  continue  to  apply  for  the  reporting  of 
irregularities  in  respect  of  assistance  granted  under  the  legal  framework  of  the 
previous programming period: 

1.  Regulation No 1848/2006 specifies for the agriculture sector. 

2.  For the Cohesion Policy, which runs over multi-annual programmes, the legal 
framework is more complex and is covered by Regulations Nos 1681/947 and 
1831/948 for the programming periods until the 2000-2006 and by Regulation 
No 1828/20069 for the period 2007-2013  

6  

7 

8 

9 

This repeals Regulation (EC) No 1848/2006.  It shall, however, continue to apply for the reporting of 
irregularities in respect of assistance granted under Regulation (EC) No 1290/2005. 
Regulation  1681/94  applies  to  the  Structural  Funds;  European  Regional  Development  Fund  (ERDF), 
European Social Fund (ESF), European Agriculture Guidance and Guarantee Fund (EAGGF) – Section 
Guidance and Financial Instrument for Fisheries Guidance (FIFG). It was amended by Regulation No. 
2035/2005 of 12 December 2005 
Regulation 1831/94 applies to the Cohesion Fund. It was amended by Regulation No. 2168/2005 of 23 
December 2005. 
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 

6 

 
 
                                                 
3.  Regulation No 498/2007 covers the European Fishery Fund (EFF). 

The  obligation  to  report  irregularities  in  the  area  of  pre-accession  assistance  is 
established  in  the  Financing  Agreements/Memoranda  signed  between  the  acceding 
countries,  Candidate  countries  and  the  European  Community/Union  and  for  the 
programming period 2007-2013 is in accordance with the provisions of Commission 
Regulation  (EC)  1681/199410  and  1828/200611  and  for  the  programming  period 
2014-2020  is  established  in  the  Framework  Agreements  signed  between  the 
Candidate countries or potential Canditate countries and the European Union12. . 

1.2. 

Expenditure – the reporting obligation and derogations 

1.2.1.  The reporting obligation 

Member States shall report to the EC (OLAF) any irregularities which have been the 
subject of a primary administrative or judicial finding, within two months, following 
the  end  of  each  quarter.  Therefore,  the  reporting  period  is  divided  in  four  quarters, 
the last of which has as deadline of the end of February of the following year13.  

The first communication of an irregularity is also known as ‘Initial Communication’ 

The information to be submitted constitutes, among others: 

(1) 

(2) 

(3) 

(4) 

The identification of the operation or budget line (for agriculture) affected by 
the irregularity; 

The detection method and the modus operandi; 

The financial impact of the irregularity; 

The natural and legal persons having committed the irregularity. 

Member  States  may  give  further  information  when  updating  the  communication, 
which they do not dispose at the moment of the initial communication. 

Updating  communications  provides  relevant  information  about  the  administrative 
and  judicial  follow-up  of  the  irregularities.  In  the  areas  of  Cohesion  and  Pre-
Accession  information  about  the  financial  follow-up  has  to  be  provided  for 
irregularities of previous programming periods (until 2000-2006 included)14. 

The  reporting  of  irregularities  happens  by  electronic  means,  using  the  modules 
provided  by  the  EC  (see  chapter  4  of  this  document  about  the  electronic  reporting 
systems). 

In certain sectors, namely Cohesion Policy and Pre-accession, financial information 
has to be expressed in Euro by countries which have not adopted it as their currency. 

Regional  Development  Fund,  OJ  L  371,  27.12.2006.  This  repeals  Regulations  (EC)  No  1681/94  and 
(EC) No 1831/94. Commission Regulation (EC) No 498/2007 of 26 March 2007 laying down detailed 
rules  for  the  implementation  of  Council  Regulation  (EC)  No  1198/2006  on  the  European  Fisheries 
Fund.  
As amended by Regulation (EC) No 2035/2005. 
As amended by Regulation (EC) No 846/2009. 
Commission Decision C-2014-6014-1- ANNEX H. 
For  the  Agriculture  sector,  however,  the  financial  year,  which  is  also  taken  as  a  reference  for  the 
analysis of reported irregularities, runs from October 15 to October 14 of the following year. 
Regulation (EC) No 846/2009 has simplified the reporting obligation specified in Regulation (EC) No 
1828/2006. 

10 
11 
12  
13 

14 

7 

 
                                                                                                                                                         
1.2.2.  Derogations to the reporting obligation 

As  a  general  rule,  where  irregularities  concern  amounts  less  than  EUR  10 000 
chargeable  to  the  general  budget  of  the  EU,  Member  States  shall  not  send  the 
irregularity communication to the EC, unless the Commission expressly requests it. 

Further  specific  derogations  to  the  reporting  obligation  exist  for  Agriculture, 
Cohesion and Pre-accession policies. More concretely, cases should not be reported: 

–  where the irregularity consists solely of the failure to partially or totally execute a 
(co-)financed  operation  owing  to  the  bankruptcy  of  the  final  beneficiary  or  the 
final  recipient;  however,  irregularities  preceding  a  bankruptcy  and  cases  of 
suspected fraud must be reported 

–  if the case has already been brought to the attention of the administrative authority 
by the final beneficiary or the final recipient voluntarily and before detection by 
the  relevant  authority,  whether  before  or  after  the  payment  of  the  public 
contribution 

–  where the administrative authority finds a mistake regarding the eligibility of the 
financed  expenditure  and  corrects  the  mistake  prior  to  payment  of  the  public 
contribution. 

1.3. 

Revenue – Traditional Own Resources 

Traditional own resources (TOR) mainly consist of customs duties that are charged 
on imports of products coming from a non-EU state and to a lesser extent on sugar 
levies. Member States are responsible for making traditional own resources available 
to the Commission within the deadlines set by Regulation No 1150/2000. 

Established amounts of TOR, which are recovered or are guaranteed and not under 
appeal are to be made available via the A-account. Member States are authorised to 
retain a share of the collected amounts as collection costs, for the 2014-2020 period 
this  share  will  amount  to  20%  as  opposed  to  25%  during  the  2007-2013  period. 
About 98 % of established TOR are recovered without any particular problem and, 
therefore, entered in the A-account and made available to the EU budget. This covers 
most of the ‘normal’  import flows where  release for free  circulation gives  rise to  a 
customs debt. 

However, if TOR are established by a Member State but not yet recovered, and if no 
security has been provided or the secured amount has been disputed, Member States 
may  enter  these  TOR  amounts  in  the  B-account.  These  amounts  of  TOR  are  not 
made  available  until  they  are  actually  recovered.  Most  irregularities  –  reported  as 
fraudulent and as non-fraudulent - relate to B-account items. 

Under  Article  6(5)  of  Regulation  No  1150/2000,  Member  States  are  required  to 
communicate  to  the  Commission,  via  the  OWNRES  system,  irregular  cases  if  the 
TOR  amount  exceeds  EUR  10  000.  The  OWNRES  database  is  an  internet-based 
application  and  a  key  tool  for  obtaining  data  for  analyses  on  cases  reported  as 
fraudulent and as non-fraudulent, and presents valuable information to the Budgetary 
Authority. 

Reliable  information  must  be  entered  in  OWNRES  regarding  the  number  of  cases 
reported as fraudulent and as non-fraudulent and their development. Member States 
have a responsibility to ensure that appropriate statistical information on fraudulent 
and  non-fraudulent  cases  is  provided  to  the  Commission.  Understandably,  the 
Budgetary Authority has a particular interest in recovery. 

8 

 
1.3.1.  Monitoring of the establishment and recovery of TOR 

In  its  capacity  as  Authorising  Officer  responsible  for  executing  the  EU  budget,  the 
Commission  (with  DG  Budget  as  the  delegated  Authorising  Officer)  monitors 
establishment  and  recovery  of  TOR  by  Member  States  in  various  ways.  The 
monitoring  is  carried  out  in  partnership  with  different  Commission  departments, 
including OLAF. The following three methods are used: 

Overall monitoring of recovery of TOR via the write-off procedure as 

(1) 
provided for in Article 17(2) of Regulation No 1150/2000; 

(2) 
Regular inspection in Member States of the establishment and recovery 
of TOR and B-account entries as provided for in Article 18 of Regulation No 
1150/2000. 

(3) 
Specific  monitoring  (in  close  cooperation  with  the  European  Anti-
Fraud  Office  (OLAF),  the  Directorate-General  for  Taxation  and  Customs 
Union  (TAXUD)  and  the  Directorate-General  for  Agriculture  and  Rural 
Development (AGRI)) of Member States’ follow-up of recovery in individual 
cases  that  have  a  significant  financial  impact  and  may  involve  Mutual 
Administrative Assistance and financial responsibility for administrative errors 
made. 

1.3.1.1.  Procedure for managing Member States’ reports for write-off 

Member States must take all requisite measures to ensure that established amounts of 
TOR are made available to the Commission. This requirement, stipulated in Article 
17(1) of Regulation No 1150/2000, also implies that a Member State is only released 
from  its  obligation  to  make  available  TOR  if  it  can  prove  that  the  debt  is 
irrecoverable either: 

(1) 

(2) 

for reasons of force majeure; or 

for other reasons, which cannot be attributed to that Member State. 

There are two ways of concluding that amounts of TOR have become irrecoverable. 
The  first  is  when  a  Member  State  declares  that  they  cannot  be  recovered  —  this 
declaration can be made at any time. However, TOR must be deemed irrecoverable 
by  a  Member  State  at  the  latest  five  years  from  the  date  on  which  the  debt  was 
established,  or  in  the  event  of  an  administrative  or  judicial  appeal,  the  date  of  the 
final decision, or the date of the last part-payment to the debt, whichever is the later. 
If Member States conclude that the non-recovery is attributable to them, the case is 
not  communicated  to  the  Commission  via  WOMIS15,  but  the  Member  State 
compensates  the  loss  of  TOR  via  the  A  account  or  a  separate  payment.  Cases 
considered  not-attributable  to  administrative  errors  are  communicated  to  the 
Commission,  provided  the  amount  written-off  exceeds  EUR  50.000.  Then,  the 
Commission checks whether the necessary conditions have been fulfilled in order to 
release the Member State from the obligation to make the TOR available. Amounts 
written-off below EUR 50.000 are at regular intervals checked via the Commission's 
on-the-spot inspections. 

Member  States  submit  their  request  to  be  released  from  the  obligation  to  make  the 
TOR available directly via an application called WOMIS. 

15  

WOMIS: Write-Off Management and Information System 

9 

 
                                                 
1.3.2.  Commission’s inspection 

The  Commission  regularly  carries  out  inspections  in  Member  States  of  the 
establishment  and  recovery  of  TOR  and  B-account  entries,  in  accordance  with 
Article 18 of Regulation No 1150/2000. 

A  report  on  the  operation  of  the  inspection  arrangements  for  traditional  own 
resources  system  is  produced  every  three  years  and  sent  to  the  Budgetary 
Authority16.  Also,  the  Commission  services  frequently  draft  thematic  reports  based 
on  the  outcome  of  Commission  inspections  which  are  regularly  discussed  with 
Member States. 

1.3.3.  Particular cases of Member State failure to recover TOR  

If TOR are not established because of an administrative error by a Member State, the 
Commission applies the principle of financial liability17. The main objective of these 
procedures is to encourage individual Member States to improve their administrative 
performance  and  to  address  weaknesses  leading  to  the  loss  of  TOR.  Payments  for 
these  cases  are  made  available  via  the  A-account  and  they  reduce,  in  effect,  the 
contribution  of  the  Member  States  via  GNI  resources,  in  proportion  to  their 
contribution to the EU budget.  

1.3.4.  Detection and reporting 

Cases should be included in OWNRES upon the initial discovery of the irregularity 
or  fraud  case  or  establishment  of  the  duties.  As  a  result,  the  year  of  the  customs 
operation and the year of discovery of the irregular case can diverge. Member State 
must indicate the year and the quarter when the OWNRES case was first discovered 
or the duties were established. Member States are constantly adding new cases and 
updating existing cases related to previous years. The OWNRES information for this 
report was generated on 18 March 2016 (cut-off date)18. 

1.3.5.  Classification of cases as fraudulent or non-fraudulent 

The  distinction  in  OWNRES  between  cases  as  fraudulent  and  non-fraudulent  may 
not be fully comparable between different Member States. In their reports, Member 
States  may  make  this  distinction  on  subjective  grounds  and  before  any  court 
judgment  is  given.  Such  subjective  grounds  vary  between  national  administrations 
depending on their national practises and legislation. 

The  concepts  of  suspected/established 
irregularity  reported  as 
fraudulent/non-fraudulent  are  not  used  in  the  OWNRES  system.  It  should  also  be 
noted that the classification of a case as fraudulent or non-fraudulent is not static in 
OWNRES and can be changed by the Member State at any time during the national 
process. Only when a case is closed in the OWNRES system, does it obtain its final 
classification as a fraud case or an irregularity case. 

fraud  or 

1.3.6.  Monetary values - estimated, established and recovered amounts 

In the report, three monetary values are used to express the financial impact of cases 
of fraud and irregularities. Generally, the estimated and established amount is used in 

16 
17 

18  

See COM(2013)829 final of 27.11.2013. 
Case  C-392/02  of  15  November  2005.  These  cases  are  identified  on  the  basis  of  Articles  220(2)(b) 
(administrative errors which could not reasonably have been detected by the person liable for payment) and 
221(3) (time-barring resulting from Customs’ inactivity) of the Customs Code, Articles 869 and 889 of the 
Provisions for application of the Code, or on the basis of non-observance by the customs administration of 
Articles of the Customs Code giving rise to legitimate expectations on the part of an operator. 
OWNRES query plus updates of that day. 

10 

 
                                                 
the  analysis  in  order  to give  an  accurate  view of  Member  States’  efforts  to  combat 
fraud and  irregularities. This  monetary value is the sum of the  established  amounts 
where an establishment has been made, of the estimated amounts for cases where no 
establishment has yet been made and of the 'potential' amounts' for cases where no 
recovery is required because of destruction of the seized and confiscated goods and 
thus the extinction of the customs debt. 

The  second monetary  value  is  the  established  amount.  It indicates  the  total  amount 
that  national authorities have  established after all subsequent corrections have  been 
processed.  In  this  way  all  the  changes  to  the  established  amounts  are  taken  into 
account  in  this  report.  Lastly,  the  recovered  amount  is  defined  as  the  total  amount 
recovered from debtors19. 

1.3.7.  Categorisation of cases by amounts involved 

In  the  field  of  TOR,  a  refined  picture  of  Member  States’  activities  regarding 
establishment  and  recovery  actions  can  be  given  by  splitting  irregular  cases  into 
categories based on the established amounts. Two categories of amounts — amounts 
below and above EUR 50 000 — can then serve as a basis for the analysis and give a 
deeper insight into Member States’ activities in detecting irregular cases. 

1.3.8.  Recovery 

The recovery rate (RR) represents the percentage of the total amount recovered from 
a debtor of the total established amount. The amounts for which Member States are 
considered  financially  liable  because  of  weaknesses  observed  in  their  recovery 
actions  are  thus  not  taken  into  account.  This  recovery  rate  is  a  snapshot  of  the 
recovery situation at the moment of the query. 

The historical recovery rate (HRR) takes into account cases which are registered in 
OWNRES as closed cases. The HRR expresses the recovery result in both complex 
and  easy  cases.  Established  and  closed  cases  from  2012  onwards  are  therefore 
excluded, because these are predominantly easy cases (complex cases can generally 
not be closed within three years). The recovery rates do not take into account cases 
of  seized  and  confiscated  goods  (usually  cigarettes),  for  which  no  recovery  is 
required. 

19  

Cases of the seized and confiscated goods are excluded. 

11 

 
                                                 
2. 

DEFINITIONS AND INDICATORS 

For  the  purposes  of  this  document,  two  sets  of  definitions  are  used.  The  first  set 
refers  to  legal  definitions,  the  second  to  specific  indicators  used  throughout  the 
different chapters. 

2.1. 

Legal definitions 

2.1.1. 

Irregularity 

Irregularity: means any infringement of a provision of European law resulting from 
an act or omission by an economic operator which has, or would have, the effect of 
prejudicing  the  general  budget  of  the  European  Union  or  budgets  managed  by  it, 
either by reducing or losing revenue accruing from own resources collected directly 
on behalf of the Union, or by an unjustified item of expenditure20. 

2.1.2.  Fraud 

Fraud: affecting the European Communities' financial interests shall consist of21: 

a) in respect of expenditure, any intentional act or omission relating to: 

–  the use or presentation of false, incorrect or incomplete statements or documents, 
which has as its effect the misappropriation or wrongful retention of funds from 
the  general  budget  of  the  European  Communities  or  budgets  managed  by,  or  on 
behalf of, the European Communities; 

–  non-disclosure of information in violation of a specific obligation, with the same 

effect; 

–  the  misapplication  of  such  funds  for  purposes  other  than  those  for  which  they 

were originally granted; 

b) in respect of revenue, any intentional act or omission relating to: 

–  the use or presentation of false, incorrect or incomplete statements or documents, 
which has as its effect the illegal diminution of the resources of the general budget 
of  the  European  Communities  or  budgets  managed  by,  or  on  behalf  of,  the 
European Communities; 

–  non-disclosure of information in violation of a specific obligation, with the same 

effect; 

–  misapplication of a legally obtained benefit, with the same effect. 

National  legislation  contains  several  provisions  that  describe  the  conduct  and  the 
related  penalties  and  sanctions.  Some  of  these  provisions  are  the  result  of  the 
implementation of the PIF Convention into national legal systems. 

The two definitions indicated above seem similar as both refer to 'acts or omissions'. 
In fact, the concept of irregularity is much wider than that of fraud. Fraud explicitly 
refers  to  'intentional'  act  or  omission.  In  this  respect,  the  concept  of  irregularity 
includes  that  of  fraud,  but  refers  also  to  a  whole  series  of  infringements  of  rules 
which do not imply a deliberate intent to violate or for which such intent is not clear 
(for  instance  a  breach  of  rules  due  to  the  misinterpretation  of  certain  provisions 
because of their complexity). 

20 
21 

Article 2 of Regulation (EC) No 2988/95. 
Article  1(1),  point  (a),  of  the  "Convention  on  the  Protection  of  the  European  Communities'  Financial 
Interests" (PIF Convention). 

12 

 
                                                 
Therefore, the distinction between irregularities and fraud is that fraud is a criminal 
act that can only be determined by the outcome of judicial proceedings. As such, it is 
only when the judicial procedure has come to an end that the actual amount of fraud 
can be determined. While awaiting these results, the Commission works on the basis 
of  the  information  supplied  by  Member  States  concerning  cases  of  irregularities, 
some of which, in the opinion of the reporting Member States, give rise to suspicions 
of  fraud.  The  Commission's  statistical  assessment  of,  and  ability  to  respond  to, 
irregularities are influenced by the accuracy and timeliness of the notifications made 
by the Member States. 

2.1.3. 

Suspected fraud 
Suspected  fraud22:  means  an 
initiation  of 
administrative  and/or  judicial  proceedings  at  national  level in  order  to  establish  the 
presence of intentional behaviour, in particular fraud, such as is referred to in Article 
1(1), point (a), of the PIF Convention. 

irregularity  giving  rise 

the 

to 

In their communications of irregularity to the Commission, Member States have been 
asked to indicate whether a reported irregularity can be regarded as 'suspected fraud'. 
This  was  introduced  in  order  to  provide  some  data  for  statistical  purposes  and  to 
avoid the need to wait until the end of criminal procedures for a final indictment. 

2.2. 

Definitions applied in the analysis 

However,  it  is  to  be  noted  that  for  greater  clarity,  only  two  broad  categories  of 
irregularity are applied in the analysis and in the indicators: 

'Irregularities  reported  as  fraudulent'  are  those  irregularities  for  which  the 
fraudulent  nature  is  suspected  or  established,  it  also  includes  those  irregularities 
which  Member  States  have  not  reported  as  fraudulent,  but  for  which  they  indicate 
that a criminal proceeding has been initiated. 

'Irregularities  not  reported  as  fraudulent'  are  any  other  type  of  reported 
irregularities, for which the fraudulent nature has not been ascertained.  

2.3. 

Indicators 

2.3.1.  Fraud Detection Rate and Irregularity Detection Rate 

Equation 1: Fraud Detection Rate (FDR) 

22 

This  definition  has  been  introduced  for  the  first  time  Commission  Regulation  (EC)  No  2035/2005.  It 
has been reaffirmed in Regulation (EC) No 1828/2006 for the cohesion policy and in Regulation (EC) 
No  1848/2006  for  the  agriculture  sector  for  the  Programming  Period  2007-2013  and,  for  the 
Programming  Period  2014-2020  in  Article  2(a)  in  all  four  Delegated  Acts  applicable  to  shared 
management:  Regulation  2015/1970  concerning  the  European  Regional  Development  Fund,  the 
European Social Fund, the Cohesion Fund, and the European Maritime and Fisheries Fund; Regulation 
2015/1971 concerning the European Agricultural Guarantee Fund and the European Agricultural Fund 
for  Rural  Development;  Regulation  2015/1972  concerning  the  Fund  for  European  Aid  to  the  Most 
Deprived;  Regulation  2015/1973  concerning  the  Asylum,  Migration  and  Integration  Fund  and  the 
instrument  for  financial  support  for  police  cooperation,  preventing  and  combating  crime,  and  crisis 
management 

13 

 
 
 
                                                 
The  Fraud  Detection  Rate  (FDR)  can  be  calculated  either  on  the  basis  of  total 
expenditure  or  the  relative  expenditure.  Relative  expenditure  means  that  for  the 
calculation, only  payments  above  EUR 10,000,  if available, are taken into  account. 
This  is  the  case  in  the  area  of  shared  management,  where  the  same  threshold  is 
applied  for  the  reporting.  For  centralised  management,  where  there  is  no  threshold 
for  the  reporting  of  irregularities,  total  expenditure  is  used.  With  the  latter,  the 
calculation of the Fraud Detection Rate becomes more accurate. 

Equation 2: Irregularity Detection Rate (IDR) 

In  the  same  way,  the Irregularity  Rate  can  also  be  calculated  on  the  basis  of  either 
total expenditure or relative expenditure. 

Both  the  FDR  and  IDR  can  be  calculated  by  financial  year  (as  in  the  case  of  the 
Agriculture sector and Direct Management) or on the entire Programming Period (as 
in the case of Structural Funds) and by Member State. The FDR is calculated using 
amounts linked to cases of irregularities reported as fraudulent 23. 

2.3.2.  Fraud Frequency Level and Fraud Amounts Level 

The  Fraud  Frequency  Level  (FFL)  represents  the  percentage  of  cases  qualified  as 
suspected  fraud  and  established  fraud  in  relation  to  the  total  number  of  reported 
irregularities, and is calculated using Equation 4 below. 

Equation 3: Fraud Frequency Level 

The  Fraud  Amounts  Level  (FAL)  represents  the  percentage  of  financial  amounts 
involved in cases qualified as suspected fraud and established fraud in realtion to the 
total  reported  financial  amounts  affected  by  irregularities  and  it  is  calculated  using 
Equation 5 below. 

Equation 4: Fraud Amounts Level 

FFL and FAL can be calculated by financial year (as in the case of the Agriculture 
sector) or on an entire Programming Period (as in the case of Structural Funds) and 
by Member State. 

23 

These  rates  were  introduced  in  the  2008  Report  and  Commission  Staff  Working  Paper  'Statistical 
Evaluation  of  Irregularities'  with  similar  names.  This  year’s  Commission  Staff  Working  Paper 
'Statistical Evaluation of Irregularities' defines precisely these concepts in order to use them in years to 
come and to emphasise that, more than the level of fraud in a given country, they identify the level of 
detection/performance of anti-fraud controls in a Member State.  

14 

 
 
 
 
 
                                                 
2.3.3.  Detection Efficiency 

This  is  a  new  concept  to  measure  how  quickly  an  irregularity  is  discovered.  It 
calculates the time between the date of committing the irregularity and the date of its 
detection.  

The Detection Efficiency (DetE) is calculated in months, derived from the number of 
days between the date upon which the irregularity was initiated (as communicated by 
the  competent  authority)  and  the  date  of  the  primary  administrative  or  judicial 
finding (PACA)24 divided by 30 as showed in Equation 5 below. 

Equation 5: Detection Efficiency 

The  average  Detection  Efficiency  (DetE)  can  be  calculated  per  country  and/or  per 
sector according to Equation 6 below. 

Equation 6: Average Detection Efficiency 

∑

Only  irregularities  containing  the  necessary  information  are  used  to  calculate  the 
average. 

2.3.4.  Reporting Efficiency 

This  is  a  new  concept  to  measure  how  quickly  an  irregularity  is  reported  after  its 
discovery.  It  calculates  the  time  between  the  date  of  the  PACA  and  the  date  of  its 
reporting to the Commission.  

The Reporting Efficiency (RepE) is calculated in months derived from the number of 
days  between  the  date  of  (PACA)  and  the  date  of  the  initial  communication  of  the 
irregularity to the Commission, divided by 30 as showed in Equation 7 below. 

Equation 7: Reporting Efficiency 

The  average  Reporting  Efficiency  (RepE)  can  be  calculated  per  country  and/or  per 
sector according to Equation 6 below. 

Equation 8: Average Reporting Efficiency 

∑

24 

For  the  definition  of  PACA,  see  article  2§3  of  Regulation  (EC)  No  1848/2006  for  the  Agricultural 
policy;  article  27(b)  of  Regulation  (EC)  No  1828/2006  for  the  Cohesion  Policy;  and  article  54(b)  of 
Regulation No 498/2007 for the Fishery Policy which are applicable for the programming period 2007-
2013. For the Programming Period 2014-2020 see article 2(b) in all four Delegated Acts applicable to 
shared management: Regulation 2015/1970 concerning the European Regional Development Fund, the 
European Social Fund, the Cohesion Fund, and the European Maritime and Fisheries Fund; Regulation 
2015/1971 concerning the European Agricultural Guarantee Fund and the European Agricultural Fund 
for  Rural  Development;  Regulation  2015/1972  concerning  the  Fund  for  European  Aid  to  the  Most 
Deprived;  Regulation  2015/1973  concerning  the  Asylum,  Migration  and  Integration  Fund  and  the 
instrument  for  financial  support  for  police  cooperation,  preventing  and  combating  crime,  and  crisis 
management. 

15 

Date of PACA - Date of initiation of irregularity (in days)30=Detection Efficiency (DetE)Date of initial communication - Date of PACA (in days)30Reporting Efficiency (RepE)= 
 
              
     
 
   
 
 
 
              
     
 
   
 
 
                                                 
Only  irregularities  containing  the  necessary  information  are  used  to  calculate  the 
average. 

2.3.5.  Ratio of Established Fraud 

The Ratio of Established Fraud (REF) is a new concept and allows to determine, on a 
given period of time (five years in the present report: 2008-2012) the percentage of 
irregularities reported as fraudulent for which fraud has been effectively established. 
It is calculated by dividing the number of cases for which Member States indicated 
that fraud was establised by the total number of irregularities reported as fraudulent, 
as showed in Equation 9 below. 

Equation 9: Ratio of Established Fraud 

It can be calculated by Member State or at EU level and by sector. 

2.3.6.  Error Rate 

The  Residual  Error  Rate  (RER)  indicates  the  risk  of  error  which  remains  after  the 
responsible  authority  has  performed  all  of  its  controls  (administrative  and  on-the-
spot)  and  has  corrected  the  errors  detected.  It  is  an  extrapolation  of  the  error  rate 
resulting from the population checked on-the-spot, where available, in relation to the 
entire  population.  However,  the  precise  methodology  may  differ  from  sector  to 
sector. 

This  extrapolation  is  estimated  by  the  Audit  Authorities  and  is  revised  by  the 
competent Commission services. 

Data published in the Commission Staff Working Document 'Statistical evaluation of 
irregularities'  are  extracted  from  the  Annual  Activity  Reports  of  the  Directorates 
General  of  the  Commisssion  responsible  for  the  different  areas  of  shared 
management. 

2.4. 

Assumptions and hypothesis 

It has been affirmed that the IMS system is now fully deployed and the data quality 
is  sufficient.  The  irregularity  reporting  of  countries  has  been  improving  over  the 
years,  therefore,  it  can  be  said  that  reporting  (both  technically  and  in  substance) 
cannot  be  the  reason  for  non-communication  of  irregularities,  or  for  the  relatively 
low  number  of  irregularities  reported  especially  in  contrast  with  the  EU  funding 
recieved.  As  a  consequence,  a  renewed  methodology  regarding  the  analysis  of  the 
irregularities  was  developed  in  relation  to  the  expenditure  part  of  the  'Statistical 
evaluation of irregularities' staff working document. The renewed methodology is in 
use  since  the  2013  report  and  is  based  on  the  assumption  that  the  reporting  effort 
equals  the  detection  effort  of  a  country.  This  suggests  that  the  number  of  irregular 
cases  reported  by  a  country  (especially  irregularities  of  fraudulent  nature),  will  be 
interpreted as the level of its detection capabilities. There are 4 hypothesis that derive 
from  this  basic  assumption,  especially  when  no  irregular  cases  (or  too  few)  are 
reported by a country: 

– 

– 

– 

– 

H1) 

H2) 

H3) 

There is zero fraud happening in the country 

The country is unable to detect fraud 

The country is unwilling to detect fraud 

H4)  A combination of H2) and H3) 

16 

number of established fraud casestotal number of irregularities reported as fraudulentRatio of Established Fraud (REF)= 
 
Subsequently,  the  renewed  methodology  provides  for  revised  indicators  to  measure 
the reporting of irregularities from the point of view of the detection effort.  

17 

 
 
 
3. 

READING GUIDE TO THE COUNTRY FACTSHEETS 

The  Commission  Staff  Commission  Document  “Statistical  evaluation  of 
irregularities  reported  for  2015  –  Own  Resources,  Natural  Resources,  Cohesion 
Policy,  Pre-accession  and  Direct  expenditure”  contains  28  factsheets  summarising 
for each Member State some of the elements highlighted in the analyses developed in 
the various chapters of the document.  

This  reading  guide  is  meant  to  help  you  understanding  the  data  and  indicators 
captured in the factsheet. 

3.1. 

Traditional own resources 

The table above lists for each Member State: 

A.  The  number  of  cases  of  irregularities  reported  as  fraudulent  in  Reporting 

Year N; 

B.  The established and estimated amounts related to cases under A; 

C.  The number of cases of irregularities not reported as fraudulent in Reporting 

Year N; 

D.  The established and estimated amounts related to cases under C; 

E.  The  percentage  that  B+D  represent  on  the  total  TOR  collected  by  the 

Member State 

3.2. 

Natural resources 

3.2.1.  Financial and audit information 

The table above indicates: 

A.  Detailed by Fund, and in the case of EAGF also by intervention measures, the 
total  amount  of  expenditure  expressed  in  EUR  for  Reporting  Year  N  as 
showed  in  the  Annual  Activity  Reports  of  the  competent  Commission 
services (DG AGRI and DG MARE); 

B.  Detailed by Fund, and in the case of EAGF also by intervention measures, the 
‘adjusted error rate’25 (expressed as % of the expenditure) for Reporting Year 

25  

In order to compensate for reliability and completeness issues with the statistics, DG AGRI carries out a 
thorough validation and evaluation of the data and takes into account all available relevant information 
notably the results of its own audit findings. This allows DG AGRI to make adjustments on a case-by-
case basis at the appropriate level in order to arrive at its best estimate, using its profession judgement, 
of the "real" level of error in each case – the adjusted error rate. 

18 

OWNRES / gross TORNEURNEUR%Established and estimatedABCDE1. Traditional Own ResourcesReporting Year NIrregularities reported as fraudulentIrregularities not reported as fraudulentPaymentsResidual error rateEUR%EAGFagricultural marketsABEAGFdirect aidsABEAFRDrural developmentABEFFfisheriesABABFundArea(Residual) amount at riskEURC2. Natural ResourcesCCCTOTALC 
 
 
                                                 
 
N  expenditure  as  showed  in  the  Annual  Activity  Reports  of  the  competent 
Commission services (DG AGRI and DG MARE); 

C.  Detailed by Fund, and in the case of EAGF also by intervention measures, the 
‘residual amount at risk’ (expressed in EUR) for Reporting Year N as showed 
in  the  Annual  Activity  Reports  of  the  competent  Commission  services  (DG 
AGRI and DG MARE). The term ‘Residual’ is indicated in brackets as it is 
specific  to  DG  AGRI  methodology  to  calculate  the  amount  at  risk,  which 
takes into account the corrective capacity of the systems. 

3.2.2.  Data about reported irregularities 

The table above contains the following information: 

D.  The number of cases of irregularities reported as fraudulent in Reporting Year 

N; 

E.  The financial amounts related to cases under D; 

F.  The number of cases of irregularities not reported as fraudulent in Reporting 

Year N; 

G.  The financial amounts related to cases under F; 

H.  The Fraud Detection Rate (FDR), as defined in paragraph 2.3.1; 

I.  The Irregularity Detection Rate (IDR), as defined in paragraph 2.3.1. 

3.2.3.  Anti-fraud activities indicators 

The data used to calculate the values showed in the table come from the irregularities 
reported as fraudulent between Reporting Year N-4 and Reporting Year N. The table 
above contains the following information: 

J.  Detection  efficiency,  as  defined  in  paragraph  2.3.3,  expressed  in  average 

months; 

K.  Reporting  efficiency,  as  defined  in  paragraph  2.3.4,  expressed  in  average 

months; 

L.  Detection + Reporting efficiency is the sum of the values indicated under J. 

and K. 

M. Usable sample is the percentage of the data population which could be used 

for the calculations 

19 

FDRIDRNEURNEUR%%EAGFDEFGHIEAFRDDEFGHIEAGF/EAFRDDEFGHIEFFDEFGHITOTALDEFGHIFundIrregularities reported as fraudulentIrregularities not reported as fraudulentDetERepEDetE + RepEUsable samplemonths/averagemonths/averagemonths/average%JKLMDetection - Reporting EfficiencyReporting period: between Year N-4 and Year NSuspected fraudEstablished fraudTOTALREFNNN%NOPQRatio of established fraudIrregularities reported as fraudulent between Reporting Year N-6 and Year N-2 
 
 
 
The data used to calculate the values showed in the table come from the irregularities 
reported  as  fraudulent  between  Reporting  Year  N-6  and  Reporting  Year  N-2.  The 
choice  of  the  reporting  period  is  based  on  the  specific  nature  of  statistics  on 
established fraud cases. Criminal proceedings leading to a conviction for fraud may 
take several years. Therefore, in order to be able to make comparisons, information 
published in previous years is used instead of data from Reporting Year N which in 
itself would not be meaningful. The table above contains the following information: 

N.  Number of cases of suspected fraud reported in the reference period; 

O.  Number of cases of established fraud reported in the reference period; 

P.  Sum of values of M and N. 

Q.  Ratio of established fraud (REF) calculated as indicated in paragraph 2.3.5. 

3.3. 

Cohesion policy 

Data and information presented in this section refer exclusively to the programming 
period 2007-13. 

3.3.1.  Financial and audit data 

The table above indicates: 

A.  Detailed  by  Fund  (the  table  also  includes  data  for  the  Cohesion  Fund, 

whenever relevant), the total amount committed for Reporting Year N; 

B.  Detailed  by  Fund  (the  table  also  includes  data  for  the  Cohesion  Fund, 

whenever relevant), the total amount paid in Reporting Year N; 

C.  Detailed  by  Fund  (the  table  also  includes  data  for  the  Cohesion  Fund, 
whenever  relevant),  the  total  amount  committed  until  the  end  of  Reporting 
Year N in relation to the programming period 2007-13; 

D.  Detailed  by  Fund  (the  table  also  includes  data  for  the  Cohesion  Fund, 
whenever relevant), the total amount paid until the end of Reporting Year N 
in relation to the programming period 2007-13; 

E.  The ‘average risk rate’ for the Reporting Year N expenditure as showed in the 

Annual Activity Reports of DG REGIO and DG MARE; 

F.  The ‘cumulative residual risk’ for the 2007-13 related expenditure as showed 
in the Annual Activity Reports in Reporting Year N of DG REGIO and DG 
MARE. 

20 

CommitmentsPaymentsCommitmentsPaymentsEUREUREUREUR%%ERDFABCDEFESFABCDEFTOTALABCDFundAppropriations Year NCumulative PP2007-2013Average risk rate Year Ncumulative residual risk3. Cohesion Policy 
 
3.3.2.  Data about reported irregularities 

G.  The number of cases of irregularities reported as fraudulent in Reporting Year 

N and cumulatively for the whole period 2007-13; 

H.  The financial amounts related to cases under D; 

I.  The number of cases of irregularities not reported as fraudulent in Reporting 

Year N and cumulatively for the whole period 2007-13; 

J.  The financial amounts related to cases under F; 

K.  The Fraud Detection Rate (FDR), as defined in paragraph 2.3.1; 

L.  The Irregularity Detection Rate (IDR), as defined in paragraph 2.3.1. 

3.3.3.  Anti-fraud activities indicators 

The data used to calculate the values showed in the table come from the irregularities 
reported as fraudulent between Reporting Year N-4 and Reporting Year N. The table 
above contains the following information: 

M. Detection  efficiency,  as  defined  in  paragraph  2.3.3,  expressed  in  average 

months; 

N.  Reporting  efficiency,  as  defined  in  paragraph  2.3.4,  expressed  in  average 

months; 

O.  Detection + Reporting efficiency is the sum of the values indicated under M 

and N. 

P.  Usable sample is the percentage of the data population which could be used 

for the calculations 

The data used to calculate the values showed in the table come from the irregularities 
reported  as  fraudulent  between  Reporting  Year  N-6  and  Reporting  Year  N-2.  The 
choice  of  the  reporting  period  is  based  on  the  specific  nature  of  statistics  on 
established fraud cases. Criminal proceedings leading to a conviction for fraud may 
take several years. Therefore, in order to be able to make comparisons, information 
published in previous years is used instead of data from Reporting Year N which in 
itself would not be meaningful. The table above contains the following information: 

Q.  Number of cases of suspected fraud reported in the reference period; 

21 

FDRIDRNEURNEUR%%Programming Period 2007-13 - Reporting Year NGHIJKLERDFGHIJKLESFGHIJKLProgramming Period 2007-13 - cumulativeGHIJKLERDFGHIJKLESFGHIJKLPeriod / FundIrregularities reported as fraudulentIrregularities not reported as fraudulentDetERepEDetE + RepEUsable samplemonths/averagemonths/averagemonths/average%MNOPDetection - Reporting EfficiencyReporting period: between Year N-4 and Year NSuspected fraudEstablished fraudTOTALREFNNN%QRSTIrregularities reported as fraudulent between Reporting Year N-6 and Year N-2Ratio of established fraud 
 
 
 
R.  Number of cases of established fraud reported in the reference period; 

S.  Sum of values of P and Q; 

T.  Ratio of established fraud (REF) calculated as indicated in paragraph 2.3.5. 

4. 

ABAC RECOVERY CONTEXT FOR DIRECT MANAGEMENT 

Analysis  of  the  irregularities  is  based  on  ABAC  data  recorded  in  the  Recovery 
Context. In order to give a comprehensive picture, additionally, data on payments are 
also used for the analysis. These data are downloaded each year in the first week of 
March. All figures presented in the Statistical Annex are based on own calculation. 

Payments  statistics  take  into  account  only  the  operational  payments  effectively 
disbursed under the direct management mode, excluding administrative expenditure. 

In  order  to  be able to  determine  the number of  irregularities, recovery context  data 
are used. The number of irregularities corresponds to the number of 'Recover Context 
Keys'  (later  referred  to  as  'recovery  items')  as  in  the  ABAC  system.  The  so-called 
'irregularities reported as fraudulent' are the recovery items qualified as '040 – OLAF 
Notified' cases.  Other 'irregularities not  reported as  fraudulent' are  those, which  are 
qualified as '030 – Irregularity'. It is to be noted that several recovery items may be 
encoded for one recovery order issued. 

In  2015,  there  was  a  revision  of  the  ABAC  Recovery  Context  that  led  to  the 
clarification and the reduction of the number of the 'error codes' (irregularity types) 
used in the system. All data on the irregularity types were updated also retroactively. 
As a consequence, already the results of the analysis provided in the 2015 Statistical 
Annex are based on the updated system. Both qualifications '030 – Irregularity' and 
'040  –  OLAF  Notified'  have  the  same  list  of  irregularity  types:  'Beneficiary  '; 
'Amount 
/  non-
performance';  'Documents  missing';  'Public  procurement  rules  not  respected'.  Since 
the revision exercise, 'Calculation error' is the only type of '020 – Error' and hence it 
is removed from the list of irregularities. 

'Under-performance 

ineligible'; 

funding'; 

'Double 

'Profit'; 

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