COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN COURT OF AUDITORS, THE COUNCIL AND THE EUROPEAN PARLIAMENT Member States' replies to the Court of Auditors' 2016 Annual Report
Date: 2018-02-28
Institutions: Directorate-General for Budget, European Commission
Subjects: EU Member State, European Court of Auditors, activity report, budgetary resources, economic and social cohesion, financial management, general budget (EU), implementation of the budget, management audit, natural resources

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 28.2.2018  SWD(2018) 61 final  COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN COURT OF AUDITORS, THE COUNCIL AND THE EUROPEAN PARLIAMENT Member States' replies to the Court of Auditors' 2016 Annual Report {COM(2018) 117 final}  
 
 
Table of Contents 

1. 

2. 

3. 

4. 

INTRODUCTION ............................................................................................................ 3 

KEY  FEATURES  OF  THE  EUROPEAN  COURT  OF  AUDITORS'  ANNUAL  REPORT  FOR 
THE 2016 FINANCIAL YEAR .......................................................................................... 3 

KEY FEATURES OF THE MEMBER STATES' REPLIES ................................................... 5 

CONCLUSION ................................................................................................................ 6 

ANNEX  I  –  MEMBER  STATES'  REPLIES  TO  OBSERVATIONS  IN  THE  2016  ANNUAL  REPORT 
MADE BY THE EUROPEAN COURT OF AUDITORS REFERRING TO EACH PARTICULAR 
COUNTRY ...................................................................................................................... 7 

CHAPTER 2 – Budgetary and financial management ................................................... 7 

CHAPTER 3 – Getting results from the EU budget .................................................... 20 

CHAPTER 4 – Revenue ............................................................................................... 30 

CHAPTER 6 – Economic, social and territorial cohesion ........................................... 69 

CHAPTER 7 – Natural resources ................................................................................. 97 

CHAPTER 8 – Security and citizenship .................................................................... 118 

CHAPTER 10 – Administration ................................................................................ 129 

ANNEX II – TEMPLATE USED FOR THE MEMBER STATES QUESTIONNAIRE ...................... 130 

ANNEX III – MEMBER STATES' REPLIES TO PART B OF THE QUESTIONNAIRE ................. 135 

Austria ........................................................................................................................ 135 

Belgium ...................................................................................................................... 139 

Bulgaria ...................................................................................................................... 143 

Croatia ........................................................................................................................ 156 

Cyprus ........................................................................................................................ 161 

Czech Republic .......................................................................................................... 165 

Denmark ..................................................................................................................... 169 

Estonia ........................................................................................................................ 173 

Finland ........................................................................................................................ 176 

France ......................................................................................................................... 180 

Germany ..................................................................................................................... 185 

Greece ......................................................................................................................... 190 

 
 
 
Hungary ...................................................................................................................... 196 

Ireland ......................................................................................................................... 203 

Italy ............................................................................................................................. 208 

Latvia .......................................................................................................................... 212 

Lithuania ..................................................................................................................... 217 

Luxembourg ............................................................................................................... 222 

Malta ........................................................................................................................... 227 

Netherlands ................................................................................................................. 232 

Poland ......................................................................................................................... 235 

Portugal ...................................................................................................................... 246 

Romania ..................................................................................................................... 250 

Slovakia ...................................................................................................................... 260 

Slovenia ...................................................................................................................... 268 

Spain ........................................................................................................................... 273 

Sweden ....................................................................................................................... 280 

United Kingdom ......................................................................................................... 285 

ANNEX IV – MEMBER STATES' REPLIES TO PART B OF THE QUESTIONNAIRE ................. 291 

Austria ........................................................................................................................ 291 

Bulgaria ...................................................................................................................... 291 

Denmark ..................................................................................................................... 292 

Finland ........................................................................................................................ 292 

Poland ......................................................................................................................... 292 

 
 
 
 
1. 

INTRODUCTION 

The present Staff Working Document (SWD) accompanies the Report from the  Commission on 
the Member States' replies to the European Court of Auditors (the ECA)' 2016 Annual report1. 

The  Treaty  of  the  Functioning  of  the  European  Union  (TFEU)  requires  that  "the  Commission 
shall  implement  the  budget  in  cooperation  with  the  Member  States,  in  accordance  with  the 
provisions of the regulations made pursuant to Article 322, on its own responsibility and within 
the limits of the appropriations, having regard to the principles of sound financial management. 
Member States shall cooperate with the Commission to ensure that the appropriations are used in 
accordance with the principles of sound financial management"2. 

The  TFEU  also  requires  that  the  Court  of  Auditors  shall  carry  out  the  audit  of  the  European 
Union's  finances.  The  ECA  shall  provide  the  European  Parliament  and  the  Council  with  a 
statement of assurance as to the reliability of the accounts and the legality and regularity of the 
underlying  transactions,  which  is  a  central  part  of  the  ECA's  annual  report3.  The  ECA 
supplements this statement with specific assessments of each major area of EU activity. 

In accordance with Article 162(5) of the Financial Regulation4, the Commission shall inform the 
Member  States  concerned  of  the  details  of  the  ECA's  Annual  report,  which  relate  to  the 
management of funds for which they are responsible. This information was presented in the form 
of a letter and three annexes to be completed by each Member State, as well as the accompanying 
guidelines  on  the  preparation  and  presentation  of  replies  to  the  questionnaires.  Annex  I  was  a 
questionnaire  on  the  paragraphs  referring  to  the  individual  Member  States;  annex  II  was  a 
questionnaire  on  audit  findings  which  refer  to  each  Member  State  and  annex  III  was  a 
questionnaire inspired by topical findings related to DAS 2016. 

2. 

KEY  FEATURES  OF  THE  EUROPEAN  COURT  OF  AUDITORS'  ANNUAL  REPORT  FOR 
THE 2016 FINANCIAL YEAR 

The ECA issued a clean opinion on the reliability of the EU accounts5, as it has done since 2007. 
Revenue was free from material error. For expenditure, ECA found an estimated level of error for 
2016 payments of 3,1 %, which is lower than in 2015 (3,8 %), see Table 1. 

1 COM(2018)117 of 28.2.2018. 
2 Article 317 of the TFEU. 
3 Articles 285 to 287 of the TFEU. 
4 Article 162(5) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 
October  2012  on  the  financial  rules  applicable  to  the  general  budget  of  the  Union  and  repealing  Council 
Regulation  (EC,  Euratom)  No  1605/2002  (Financial  Regulation):  "As  soon  as  the  Court  of  Auditors  has 
transmitted  the  annual  report,  the  Commission  shall  immediately  inform  the  Member  States  concerned  of  the 
details  of  that  report  which  relate  to  management  of  the  funds  for  which  they  are  responsible  under  the 
applicable rules. Following receipt of such information, the Member States shall reply to the Commission within 
60 days. The Commission shall transmit a summary of that information to the Court of Auditors, the European 
Parliament and the Council by 28 February." 
5 Paragraph 1.6 of the ECA's annual report for the 2016 financial year. 

3 

 
 
 
 
                                                 
Table 1 – Estimated levels of error in the ECA's 2016 Annual report 

MFF heading 

Transactions subject to 
audit (billion EUR) 

Estimated level of 
error 2016 (%) 

Estimated level of 
error 2015 (%) 

1a. Competitiveness 

1b. Cohesion 

2. Natural resources 

3. Security and citizenship 

4. Global Europe 

5. Administration 

Other 

Total 

Revenue 

15,2 

35,7 

57,9 

2,4 

8,3 

9,4 

0,4 

129,3 

144,7 

4,1 

4,8 

2,5 

- 

2,1 

0,2 

- 

3,1 

0 

4,4 

5,2 

2,9  

- 

2,8 

0,6 

- 

3,8  

0 

Administrative expenditure had the lowest estimated level of error (0,2 %) while expenditure for 
almost  all  remaining  headings  was  affected  by  material  error  (above  2  %).  For  each  of  those 
headings,  the  estimated  levels  of  error  represented  a  decrease  as  compared  to  20156.  The  ECA 
stated that "in expenditure, we continue to find a material level of error, but it is not pervasive,"7 
Mr  Klaus-Heiner  Lehne,  the  President  of  the  ECA,  said  accordingly  that  "this  year's  qualified 
opinion reflects an important improvement in EU finances."8 

'Cohesion' was the biggest contributor to the overall error rate, followed by 'Natural Resources', 
'Competitiveness' and 'Global Europe'. This distribution is in line with the ECA's findings for the 
2015 financial year.9 The ECA mentioned that the errors for 'Competitiveness' essentially reflect 
different categories of ineligible cost, in particular personnel costs, other direct costs, and indirect 
costs.10 Ineligible costs in expenditure declarations and ineligible projects account for 70 % of the 
error  under  'Cohesion'.11  Regarding  'Natural  Resources',  the  European  Agriculture  Guarantee 
Fund (EAGF) accounts for more than three quarters of expenditure and is free from material error 
(1,7 %),  while  in  rural  development  there  continues  to  be  a  high  level  of  error  (4,9 %), 
particularly  for  reimbursement  expenditure.12  Missing  essential  supporting  documentation  and 
overstated Commission interim clearings account for two thirds of the error for 'Global Europe'.13 
The ECA highlighted that, overall, "eligibility errors in cost reimbursement schemes continue to 

6 Box 1.2 of the ECA's annual report for the 2016 financial year. 
7 Paragraph 1.8.(b) of the ECA's annual report for the 2016 financial year. 
8 Press Release European Court of Auditors, "EU accounts true and fair and share of irregular spending further 
reduced in 2016, say EU auditors," Luxembourg (28 September 2017). 
9 Box 1.5 and Paragraph 1.12 of the ECA's annual report for the 2016 financial year. 
10 Paragraph 1.13 of the ECA's annual report for the 2016 financial year. 
11 Paragraph 1.14 of the ECA's annual report for the 2016 financial year. 
12 Paragraph 1.15 of the ECA's annual report for the 2016 financial year. 
13 Paragraph 1.16 of the ECA's annual report for the 2016 financial year. 

4 

 
 
 
 
 
                                                 
be the main contributor to the estimated level of error", including ineligible costs included in cost 
claims and ineligible projects, activities and benificiaries.14 

The  ECA  found  that  its  estimated  level  of  error  in  various  areas  of  expenditure  shows  a  much 
stronger  correlation  with  the  basis  for  payment  (i.e.  reimbursement  or  entitlement)  than  it  does 
with  the  management  mode.  Thus,  the  ECA  continues  to  find  that  reimbursement  spending  is 
affected by much higher levels of errors then spending on an entitlement basis (the level of error 
for reimbursement is 4,8 % while 1,3% for entitlement).15  

The ECA acknowledged that, this year for the first time, all Commission DGs estimated a level of 
error  in  'relevant  expenditure'.  As  regards  legality  and  regularity  indicators,  it  stressed 
furthermore  that the figures disclosed in the Annual Activity Reports (AARs) for amounts at risk 
at payment are, in most cases, broadly in line with its own estimates of the level of error. Also, 
the ECA continues to take account of corrective measures applied by the Member States and the 
Commission  where  these  are  made  prior  to  its  examination.  These  measures  taken  by  the 
Commission and Member State authorities were, in view of the ECA, "instrumental in reducing 
the  overall  estimated  level  of  error."16  The  ECA  also  indicated  that  management  and  control 
systems  in  place  at  the  level  of  Member  States  and  the  Commission  produced  sufficient 
information to further prevent or detect and correct many errors. "This means there is no need for 
additional controls, but the existing controls must be enforced properly."17 

The ECA stressed that even though "the European Commission’s reporting on compliance with 
the rules is in line with their own results in most  cases", it should "focus more on performance 
and simplify its measurement tools in line with international good practice."18 

Concerning legality and regularity of 2016 payments, the ECA issued a qualified positive opinion 
for the first time since it began to provide an annual statement of assurance in 1994. As the ECA 
elaborated19:  "This  reflects  important  improvements  in  spending.  And,  if  these  prove  to  be 
sustainable in the future, this opinion might mark a milestone in the development of EU spending 
at a crucial time." 

3. 

KEY FEATURES OF THE MEMBER STATES' REPLIES 

The  Commission  informed  the  Member  States  concerned  of  the  details  of  the  ECA's  Annual 
report for the financial year of 2016. This information was presented in the form of a letter and 
three annexes to be completed by each Member State, as well as  accompanying guidelines on 
the preparation and presentation of replies to the questionnaires. The documents were transmitted 
to Member States electronically only for the first time this year. 

14 Paragraph 1.19 of the ECA's annual report for the 2016 financial year. 
15 Paragraph 1.20 of the ECA's annual report for the 2016 financial year. 
16 Presentation of the ECA’s 2016 annual report for the Council of the European Union (Economic and Financial  
Affairs), "Speech by Klaus-Heiner Lehne, President of the European Court of Auditors," Brussels (7 November  
2017). 
17 Press Release European Court of Auditors, "EU accounts true and fair and share of irregular spending further 
 reduced in 2016, say EU auditors," Luxembourg (28 September 2017). 
18 Press Release European Court of Auditors, "EU accounts true and fair and share of irregular spending further 
 reduced in 2016, say EU auditors," Luxembourg (28 September 2017). 
19 Presentation of the ECA’s 2016 annual report for the Council of the European Union (Economic and Financial 
 Affairs), "Speech by Klaus-Heiner Lehne, President of the European Court of Auditors," Brussels (7 November 
 2017). 

5 

 
 
 
                                                 
Annex I of the letter to the Member States was a questionnaire on the paragraphs referring to the 
individual  Member  State.  The  information  on  which  paragraph  refers  to  which  country  was 
provided by the ECA. Although the ECA highlighted paragraphs related to all policy areas, the 
Member States' replies focused mostly on the ECA's paragraphs concerning the policy areas of 
Revenues,  Common  Agricultural  Policy,  and  Economic,  social  and  territorial  cohesion.  The 
replies of the Member States were generally extensive and are enclosed in Annex I of the present 
SWD. 

Annex II of the letter to the Member States was a questionnaire on audit findings, which refer to 
each  Member  State.  These  findings  were  mostly  related  to  the  major  EU  spending  areas  of 
agriculture  and  cohesion  policy.  They  were  previously  provided  by  the  ECA  to  the  Member 
States in the  form of Statements of Preliminary Findings (SPFs).  The Member States were  not 
invited to reply to these findings and therefore Annex II is not enclosed in the present SWD.  

Annex III of the letter to Member States was a questionnaire focusing on three main themes: 

(1) compliance with rules and regulations, with a particular focus on error types and their relative 
importance in the major EU shared management spending areas (common agricultural policy and 
economic, social and territorial cohesion policy), and to what extent Member States have taken 
preventive measures to avoid such errors in the future; 

 (2)  the  performance  of  the  EU  budget,  highlighting  to  what  extent  Member  States  assess 
information  on  the  quality  of  performance  data  at  national  level  in  relation  to  the  major  EU 
shared  management  spending  areas  (common  agricultural  policy  and  economic,  social  and 
territorial cohesion policy); 

(3) Member States' follow-up of recommendations formulated by the ECA in its Special Reports. 

The  template  of  the  questionnaire  is  provided  in  Annex  II  of  the  present  SWD.  The  Member 
States' replies to part A of the questionnaire are available in Annex III and those concerning part 
B of the questionnaire are in Annex IV of the present SWD. 

4. 

CONCLUSION 

The  Commission  is  committed  to  continue  closely  working  with  the  Member  States  towards 
lower levels of error, improved financial management and value added of the EU budget. 

6 

 
 
 
 
 
ANNEX I – Member States' replies to observations in the 2016 Annual report made by the European Court of Auditors referring to each particular 
country 

CHAPTER 2 – Budgetary and financial management 

Paragraphs 

Observations in the ECA's 
2016 Annual Report 

Member States' replies 

Box 2.5 

EFSI funding per MS 

Austria:  Action taken: NO; Action completed: ; Completion date: 

EFSI programme is still ongoing. 

Belgium: Action taken: ; Action completed: ; Completion date: 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Croatia: Action taken: YES; Action completed: NO; Completion date: 

At its session of 24 September 2015, the Croatian Government adopted a Decision on the allocation of duties related to 
cooperation with the European Investment Bank and the European Investment Fund on implementation of the Investment 
Plan for Europe. In accordance with the above Decision, the Croatian Bank for Reconstruction and Development 
(HBOR) has been entrusted with the following duties: 

- cooperation on implementation of the Investment Plan for Europe at investment platform level, in individual projects 
and through direct contacts with EIB Group members; 

- functioning as the national access point for potential clients and stakeholders; 

- creating new financial products to meet the needs of the Croatian economy; 

- identifying economically and technically sustainable projects across the key sectors, particularly in innovative, 
environmentally aware and societal areas, which will be put forward for financing from the European Fund for Strategic 
Investments (EFSI); 

- attracting private investment in combination with public resources; 

- participating in the EFSI-based financing of infrastructure and SME projects through various programmes for 
encouraging economic growth; 

- establishing the Croatian Investment Project Portal comprising current and future investment projects in Croatia, in 
accordance with Regulation (EU) 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the 

7 

 
 
European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project 
Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013 — the European Fund for Strategic 
Investments; 

- functioning as a national contact point for cooperating with the European Investment Advisory Hub; and 

- establishing bilateral cooperation with other European national development banks with a view to implementing the 
Investment Plan for Europe, and carrying out any other tasks required for or related to implementation of the Regulation, 
the Investment Plan for Europe and all other existing and subsequent EU acts governing this matter. 

In implementing the Investment Plan for Europe, HBOR cooperates with the relevant state administration bodies, 
agencies and other legal entities with public powers through national coordinators for the Investment Plan for Europe. 

The ministry responsible for regional development and EU funds coordinates the work of the relevant state 
administration bodies, agencies and other legal persons through national coordinators for the Investment Plan for Europe, 
fosters cooperation between all these parties and HBOR, and reports, together with HBOR and the national coordinators, 
to the Croatian Government on activities undertaken and progress made. 

At its session of 28 September 2016, the Croatian Government adopted the First Report on Implementation of the 
Investment Plan for Europe in Croatia in the period 25.9.2015-31.7.2016. 

Croatia benefits from the ENFI SME agreement; the following two projects put forward by HBOR under the SME 
Window were approved in 2016:  

- Risk distribution in mid-cap companies and other priorities (worth €50 million) and 

- Portfolio guarantee under Horizon 2020. InnovFin SME Guarantee Facility for small and mid-cap companies and 
SMEs, worth €20 million. 

Under the EFSI Infrastructure and Innovation Window, a total of 14 potential investment projects (energy (5), tourism 
(3), transport (2), digital infrastructure (2), production industry (1), health (1)), all of which could be implemented over 
the next three years, were identified between the start of the Investment Plan for Europe and the end of 2016. The 
estimated value of the investments that these EFSI-backed projects could stimulate is in excess of €5 billion.  

Four Croatian projects, with a total of €1.5 billion of estimated investment, were published on the European Investment 
Project Portal by the end of 2016. 

Activities related to the EFSI are ongoing. 

Cyprus: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

8 

 
 
Not applicable; there are no specific findings. 

Denmark: Action taken: ; Action completed: ; Completion date: 

In our view, the figure merely depicts a factual situation, and any comments on whether action has been taken are 
therefore considered to be irrelevant.   

Estonia: Action taken:; Action completed:; Completion date: 

Finland: Action taken: ; Action completed: ; Completion date: 

No comments. 

France: Action taken: YES; Action completed: NO; Completion date: implementation under way 

France welcomes the deployment of EFSI throughout Europe and the success of this flagship programme in France. Its 
success proves that the EFSI meets a demand that traditional markets are not generally able to satisfy. The operations 
financed are in line with our expectations as regards this key instrument for investment in Europe. Thanks to the EFSI, 
the EIB expanded its action on new counterparts, with smaller amounts and sometimes substantially higher risk levels (at 
both aggregate and individual levels), using new financing instruments. Some of these projects were reproduced in the 
rest of Europe and they are in line with national and European priorities (energy transition, innovation, efficient use of 
resources thanks to the financial instruments, etc.).  

The measures taken included putting in place an interministerial focal point responsible for the EFSI at the French 
Commissariat-General for Investment (Laurent Ménard), which informed project leaders, directed them and where 
necessary exercised a facilitative role in bringing the most complex projects to a conclusion, in cooperation with the local 
and Luxembourg teams of the EIB. Another measure worth highlighting was the ad hoc support provided by the 
technical ministers for certain pan-European programmes, such as the Green Shipping instrument. 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: NO; Action completed: ; Completion date: 

Factual finding, no action required. 

Ireland: Action taken: NO; Action completed:; Completion date: 

No action required. 

Italy: Action taken: ; Action completed: ; Completion date: 

9 

 
 
Latvia: Action taken: YES; Action completed: NO; Completion date: 

Latvia is adopting several lines of approach for the receipt of financing from the European Fund for Strategic 
Investments (EFSI). Firstly, the Financial Institution for Latvian Development (ALTUM), in its role as the national 
contact point, provides consultations on attracting investment to large projects; secondly, ALTUM is mobilising EFSI 
resources to support small and medium-sized enterprises (SMEs) in Latvia; thirdly, ALTUM is encouraging economic 
growth in Latvia by organising information events aimed at actively promoting EFSI financing opportunities for business 
people and the public. 

On 13 October 2016 an agreement was signed with the European Investment Fund (EIF) on mobilising InnovFin 
programme financing for the ALTUM guarantee financial instrument. 

At the same time, an application has been submitted to the EIF and a COSME application has been approved for 
mobilising EFSI funds for ALTUM loans for business start-ups for up to five years. 

As the Latvian national contact point for European Investments, ALTUM provides consultations for project promoters 
and business people on preparing and submitting projects to the EIB in the framework of the EFSI. ALTUM has so far 
provided consultations on around 30 projects in the infrastructure, education, science, development and innovation, 
renewable energy and energy efficiency sectors. Project promoters received consultations in areas such as infrastructure, 
information technology and manufacturing development. 

With a view to informing the public and potential project implementers about the opportunities that exist in Latvia for 
using EFSI financing, ALTUM, in cooperation with the European Commission Representation in Latvia, regularly 
organises public events promoting the acquisition of available financing. 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

The information provided is descriptive in nature and does not require any action to be taken. 

Luxembourg: Action taken: ; Action completed: ; Completion date: 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

10 

 
 
Romania: Action taken: ; Action completed: ; Completion date: 

No reply needed. We have taken note. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text/graph conveys the state of play. 

Slovenia: Action taken: ; Action completed: ; Completion date: 

Reply of the Ministry of Infrastructure (MZI): DARS (Družba za avtoceste v Republiki Sloveniji - the Motorway 
Company of the Republic of Slovenia) entered talks with the EIB in November 2016 and prepared the documentation 
required to obtain loans and guarantees under EFSI. On this basis, in July 2017 the EIB granted a loan of EUR 51 million 
for the first major Slovenian infrastructure project with EFSI guarantees, which will finance the deployment of an 
electronic tolling system for heavy vehicles on Slovenian  motorways. The value of the investment is EUR 102 million. 
The project company 2TDK d.o.o. is holding talks with the EIB for an EFSI-backed loan for the second track of the 
Divača-Koper railway. The project company applied on this basis for a grant from the European Commission’s 
Connecting Europe Facility in July 2017. 

Spain: Action taken: YES; Action completed: ; Completion date: 

We agree with the Commission that it is too early to prejudge the capacity of the Member States concerned to absorb the 
funds foreseen for them. 

In Spain’s case, there was a significant reduction in public spending due to the major economic crisis that affected the 
country in 2014 and 2015 (years at the beginning of the new period). In addition, a caretaker government was in place 
throughout 2016, and new requirements came into effect during the new period, leading to management difficulties, all of 
which caused delays in implementing programmes in Spain. However, this does not mean that Spain has little capacity to 
absorb funds; once the crisis and the issues with the management system have been overcome, and in cooperation with 
the EU, Spain will be able to implement the allocated funds on time. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No issue to respond to. 

Box 2.6 

Outstanding  commitments  of 
ESI Funds at 31 December 2016 
as  a  percentage  of  2016  general 

Austria: Action taken: NO; Action completed: ; Completion date: 

The Eurostat figures are noted. 

11 

 
 
government expenditure by MS  Belgium: Action taken: ; Action completed: ; Completion date: 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Croatia: Action taken: YES; Action completed: NO; Completion date: 

At its session of 8 June 2016, the Croatian Government adopted the Priority National Action Plan for a more efficient use 
of European structural and investment (ESI) funds in 2016-2018, which lays down a renewed strategy for benefitting 
from ESI funds in accordance with the 2016 National Reform Programme. The Action Plan comprises 20 action points 
planned over short-term (6-12 months), mid-term (1-3 years) and long-term (3+ years) periods. Once implemented, the 
Action Plan is expected to increase the take-up of ESI funds in the 2014-2020 period by streamlining the conclusion of 
contracts, payments and certification. 

The Priority National Action Plan for a more efficient use of ESI funds in the 2016-2018 period has three objectives: 

  1. reducing the administrative burden; 

  2. providing for reliable management of resources; 

  3. ensuring a sufficient number of well-conceived projects. 

The Plan also comprises the following 20 action points aimed at stepping up the efficient use of ESI funds: 

  1. Simplifying and standardising procedures 

  2. Reducing the complexity of the management and control system 

  3. Facilitating employment in posts dealing with EU funds 

  4. Introducing help teams that provide assistance in drawing up and implementing projects 

  5. Identifying performance criteria (indicators) for specific objectives 

  6. Optimising sources of financing 

  7. Improving the model of ex-ante control of public procurement projects financed by EU funds 

  8. Strengthening cooperation between applicants/beneficiaries and bodies providing support 

  9. Systematic training programmes aimed at boosting administrative capacity at national and regional levels. 

10. Improving employee retention policy in relation to staff working on EU funding 

11. Introducing support teams with a view to ensuring compliance with general terms and conditions and identifying 
cases where administrative acts linked to EU projects should be issued as a matter of priority 

12 

 
 
12. Activation of financial instruments 

13. Securing additional sources for financing projects, particularly those involving key infrastructure and sectors with fast 
productivity growth (energy, transport, IT) 

14. Establishing a common methodology for evaluating the socio-economic impact of investment projects financed by 
EU funds 

15. Introducing e-applications and e-reporting for projects 

16. Introducing an information system for strategic management of EU funds 

17. Strengthening cooperation between the central and local levels on EU projects 

18. Systematic programme promotion 

19. Setting up a system for strategic planning and development management 

20. Systematic planning with regard to EU funded projects. 

Examples of activities undertaken with a view to simplifying procedures: 

- 

abolishing the requirement for project partners to deposit own funds as a guarantee prior to signing a contract; 

reducing the number of steps in the project evaluation and grant award procedure with a view to reducing the 

- 
time between the application and the signing of a contract from 160 to 100 days; 

simplifying the option of financing individual activities (reducing the volume of documentation needed to justify 

- 
the expenses); 

new public procurement procedures for entities not subject to the Public Procurement Act, i.e. new procedure for 

- 
publicising public procurement, adapted to the value of the public contract, with a view to simplifying the overall 
procedure; 

introducing general guidelines for applicants to reduce the number of cases where incomplete or unclear calls for 

- 
project proposals are published; 

- 

introducing vouchers for fast access (within 15 days) to support amounts of up to €10 000. 

Examples of activities undertaken with a view to ensuring good management of the funds and a sufficient number of 
well-conceived projects: 

amendments to the Budget Execution Act to giving the MA the power to decide on the re-allocation of up to 15% 

- 
of the amount available through national co-financing; 

13 

 
 
- 

establishing, within the CFCA, a unit for ex-ante control of public procurement for ESIF projects; 

establishing a network for managing irregularities, which facilitates the exchange of information on handling and 

- 
reporting irregularities in practice; 

- 

- 

- 

- 

creating financial instruments for SMEs; 

appointing regional coordinators to facilitate and step up the preparation of projects at local level; 

ensuring a uniform handling of complaints and irregularities; 

stepping up training and media campaigns. 

All bodies involved in the management and implementation of ESI funds in Croatia must comply with the 
abovementioned Action Plan. 

Activities are ongoing as planned. 

Cyprus: Action taken: YES; Action completed: NO; Completion date: 31/12/2017 

(a) MFF 2007-2013: Preparation of documents for closure of FP 2007-2013 and achievement of 100 % take-up. 

(b) MFF 2014-2020: The Managing Authority has carried out all the necessary steps at technical and political level to 
speed up the procedures for implementation and inclusion of projects in the Operational Programmes, with a view to 
fully meeting the annual take-up targets of the ESI Funds. 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Denmark: Action taken: YES; Action completed: YES; Completion date: 31/12/2017 

For the ERDF and the ESF, three payment claims were sent to the Commission in 2017. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: ; Action completed: ; Completion date: 

No comments. 

France: Action taken: YES; Action completed: NO; Completion date: 

According to the table above, the proportion of EFSI commitments remaining to be spent is minimal, being less than 1-
2%. It most probably corresponds to the balances of transactions carried out at a cost slightly lower than that estimated, 
and pre-financing balances which will be spent at a later stage. 

14 

 
 
The low percentage of unspent commitments shows there was no particular difficulty as regards fund absorption. 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: NO; Action completed: ; Completion date: 

Factual finding, no action required. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

Ireland’s ESIF allocation is a small percentage of its government expenditure; however, Ireland is making every effort to 
ensure timely drawdown of funds. 

Italy: Action taken: ; Action completed: ; Completion date: 

Latvia: Action taken: YES; Action completed: YES (for the 2007-2013 programming period)  / NO (for the 2007-2013 
programming period) ; Completion date: 30.03.2017 (for the 2007-2013 programming period) 

Closure documents covering the 2007–2013 programming period were submitted to the European Commission on 30 
March 2017, including a closure declaration by virtue of which Latvia receives 2007–2013 programming period 
financing in full. With regard to commitments made under the 2014–2020 programming period, Latvia is actively 
continuing to mobilise the financing allocated to it, by submitting payment applications to the European Commission. By 
30.09.2017 Latvia had submitted payment applications to the European Commission amounting to 9 % of total EU fund 
allocations for the 2014 2020 programming period, or 358 million euros. 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

Unused commitments of European Structural and Investment (ESI) Funds represented a significant proportion of general 
public-sector expenditure at the end of 2016, as ESI funds allocated to Lithuania comprise a relatively large proportion of 
all public-sector expenditure. Nevertheless, according to interim payment claims, an amount exceeding the eligible costs 
provided for in the 2007-2013 operational programmes under the European Union’s structural funds (European Regional 
Development Fund, Cohesion Fund and European Social Fund) was declared to the Commission. 

European Union structural fund commitments for 2014-2020 had not been used up by the end of 2016 for the following 
reasons: 

Protracted drawing up, harmonisation and approval of national strategic documents. After commencement of the 

1. 
2014-2020 programming period, there was a delay in approving the main national strategic documents. Implementation 
of the operational programme could not begin without these documents. Furthermore, structural reforms and 
reorganisations had been initiated in various sectors (higher education, social protection and employment, public 

15 

 
 
administration, healthcare, IT infrastructure) and fundamental changes made to existing policies, all of which constituted 
an essential precondition for the effective investment of EU funds. 

Increased attention paid to the quality of investments. More attention is being paid to the quality and 

2. 
effectiveness of investments during the 2014 2020 programming period, so it is taking longer to choose the most 
effective options to meet the targets of the operational programmes and implement specific projects. For infrastructure 
projects, requirements that investment projects provide arguments in support of the most effective project implementation 
option were introduced; these necessitated longer project preparation times. 

3. 
Delayed implementation of project activities. Delays in the implementation of project activities result mainly 
from public procurement procedures, which may last longer than planned (e.g. because of claims brought by suppliers 
participating in the tenders as a result of procedural infringements, etc.). 

Luxembourg: Action taken: ; Action completed: ; Completion date: 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Romania: Action taken: NO; Action completed: ; Completion date: 

The Managing Authorities have not planned any commitments to be taken into account by the European Commission in 
2016 or any amounts to be requested from the Commission in that year. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

Ministry of Finance Certifying Authority:  

2007-2013 programming period: 

Measures drawing on EU resources in the 2007-2013 programming period were taken in collaboration with the Task 
Force set up by the Commission in 2014. The results were periodically monitored at joint meetings between Slovakia and 
the Commission. In 2015 the last meeting was held at the end of December. In line with Government Decree No 
56/2014, managing authorities at risk were obliged to submit action plans to speed up spending and the implementation 

16 

 
 
of operational programmes every two months. The end of eligibility for the 2007-2013 programming period marked the 
end of the Task Force and the obligation to submit such action plans. 

2014-2020 programming period:  

For the 2014-2020 programming period, the Task Force set up for the 2007-2013 programming period was replaced by a 
Joint Working Programme set up by the Commission. Programmes at risk are also discussed at the quarterly monitoring 
meetings between the Commission and representatives of the national authorities. At national level the spending of EU 
funds is monitored by means of the binding programme plan in order to identify any delays in spending or achieving 
programmes’ objectives, analyse the reasons for problems in implementing programmes and taking appropriate measures 
to reduce to a minimum the risk that a programme’s objectives will not be achieved. 

Slovenia: Action taken: ; Action completed: ; Completion date: 

MZI reply: The reason for the delay in 2016 in awarding works the field of transport (railway infrastructure) was that 
drawing up the technical documentation and obtaining environmental protection consents took much longer than 
anticipated, as did harmonising the major-project technical solutions with the JASPERS technical assistance facility. This 
meant that no implementing works were awarded in 2016, with only motorway-related works going ahead. As a result, 
the Beneficiary made it a priority to adapt the technical documentation to the recommendations from JASPERS and to 
actively coordinate unresolved environmental issues with environmental authorities in Slovenia. 

Spain: Action taken: ; Action completed: ; Completion date: 

ERDF: In Spain’s case, outstanding commitments for ESI funds as of 31 December 2016 represent only 5 % of general 
government expenditure in 2016, which is significantly lower than countries such as Lithuania, Bulgaria, Latvia and 
Romania, where this percentage stands at over 20 %. 

ESF: In Spain’s case, outstanding commitments for EIF funds represent less than 5 % of general government expenditure 
in 2016. In any case, and as regards the ESF, we agree with the Commission that it is too soon in the 2014-2020 MFF to 
prejudge the capacity of the Member States to absorb the funds foreseen for them. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. ESIF Funds <1% of general spending so potential problem identified by ECA does not apply. 

Box 2.7 

EU funds as a proportion of MS' 
Gross Fixed Capital Formation 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Croatia: Action taken: ; Action completed: ; Completion date: 

17 

 
 
Cyprus: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: NO; Action completed: ; Completion date: 

Factual finding, no action required. 

Latvia: Action taken: YES; Action completed: NO; Completion date: 

A large part of investments in Latvia comes from EU funds, however, from a dynamic perspective, the proportion of 
funding is not increasing – it is in fact decreasing, and this was most markedly the case in 2016. The proportion of 
national investments is on the increase in the medium term, thereby gradually reducing the significance of EU funding in 
gross fixed capital formation. It is estimated that over the period 2017–2020, gross fixed capital formation expenditure in 
Latvia will grow by an average of between 12 and 13 % annually, while EU fund expenditure is expected to increase 
more rapidly only in 2017–2018. From 2019 EU fund expenditure will increase at a lower rate than total gross fixed 
capital formation expenditure, and as a result the proportion of EU funds will move more into line with the average EU 
level. 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

The information provided is descriptive in nature and does not require any action to be taken. 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Romania: Action taken: ; Action completed: ; Completion date: 

No reply needed. We have taken note. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text/graph conveys the state of play. 

18 

 
 
Box 2.8 

Entities 
involved 
implementation of EU policies 

instruments 
and 

and 
in 

financing 

Slovenia: Action taken: YES; Action completed: NO; Completion date: 

MZI Reply: EU funds represent a significant proportion of capital investment within the Slovenian state budget, ranging 
from 28 % in 2008 to 60 % in 2014. Slovenia was very effective in drawing down EU funds in the 2007-2013 Financial 
Perspective, with the trend subsequently declining slightly. Slovenia continues to work to plan investment revenues as 
realistically as possible when preparing the state budget, both from EU and domestic sources and to maintain a stable 
proportion of EU contributions to its capital investment, in line with the funds available.   

Spain: Action taken: ; Action completed: ; Completion date: 

We have nothing to add to the comments already made. 

Greece: Action taken: ; Action completed: ; Completion date: 

19 

 
 
 
 
 
CHAPTER 3 – Getting results from the EU budget 

Member States' replies 

France: Action taken: YES; Action completed: YES; Completion date: / 

N/A 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

ECA has reviewed UK performance information.  No further action necessary. 

France: Action taken: YES; Action completed: YES; Completion date: // 

The ‘mission indicators’ are the most representative indicators, more so than the ‘most important’ indicators. 

Paragraphs 

Observations in the ECA's 
2016 Annual Report 

Paragraph 
3.13.(iii) - 
footnote 15 

(15)  Governments:  Australia, 
Canada, 
the 
Netherlands,  the  UK  and  the 
USA. 

France, 

Paragraph 
3.16 

and 

In  France,  the  state  budget  is 
subdivided into ‘missions’. Each 
of the 31 missions in the budget 
comprises  several  programmes 
(118  in  2017).  Each  programme 
has  a  strategy,  objectives  and 
performance 
quantified 
indicators, 
the  most 
important 
indicators  are  also 
identified  as  mission  indicators. 
The  use  of  identical  indicators  
ensures 
between 
coherence 
missions  and  programmes.  The 
indicators 
both 
programme performance and the 
performance 
government 
of 
departments. 

cover 

Box 3.4 

OECD 
2016 
budgeting survey results 

Performance 

Austria: Action taken: NO; Action completed: ; Completion date: 

OECD data are noted. 

20 

 
 
 
Belgium: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Denmark: Action taken: ; Action completed: ; Completion date: 

In our view, the figure depicts a factual situation, and any comments on whether action has been taken are therefore 
considered to be irrelevant. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: ; Action completed: ; Completion date: 

No comments. 

France: Action taken: YES; Action completed: YES; Completion date: / 

N/A 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: NO; Action completed: YES; Completion date: 

National Coordination Authority 

Under the European Structural and Investment Funds, the performance of the Programmes of the 2014-2020 NSRF are 
monitored and assessed using common indicators of the individual Fund-specific Regulations and other special indicators 
that are created where necessary (e.g. where there is no suitable common indicator). Of particular importance for the 
assessment of the performance of the Programmes are the indicators that have been incorporated in the Programmes’ 
Performance Framework, which is linked to the allocation of the performance reserve. These indicators constitute a 
subset of the indicators of each Programme. During the preparation and formulation of the Programmes, the National 
Coordination Authority, which is responsible for coordinating the preparation of the Programmes and submitting them to 
the European Commission, instructed that use should be made primarily of the common indicators of the Regulations for 
both the monitoring and the evaluation of the performance of the Programmes and for the formulation of the Performance 
Framework of each Programme. In this way, a limited amount of comparable data is used by those responsible for taking 
decisions with regard to the performance and effectiveness of the use of the available resources, in particular in relation 
to the achievement of the goals of the Performance Framework and the allocation of the performance reserve. It should 
be noted, however, that sound financial management imposes the use of other means/tools for taking financial decisions 
when implementing the Programmes of the 2014-2020 NSRF. 

21 

 
 
Hungary: Action taken: NO; Action completed: ; Completion date: 

Factual finding, no action required. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

No action required. 

Italy: Action taken: YES; Action completed: YES; Completion date: 

The MA has a monitoring system to track the progress of the OP, covering the physical, financial and procedural 
progress of operations carried out by either the MA or the intermediate bodies. This allows the financial and physical 
indicators to be measured and their values to be compared with the OP’s objective targets. It is therefore possible to 
measure performance and provide an indication of the success of the operations and to identify points that need 
improvement. The MA also has a forecasting model (retroplanning) which is useful for estimating, for the MA and for 
each intermediate body, the spending capacity for individual priorities needed to obtain the performance reserve on 31 
December 2018. 

Latvia: Action taken: YES; Action completed: NO; Completion date: 

Latvia uses a system of performance indicators in the fields of both political (strategic institutional) planning and national 
budgetary management. Substantial changes have been made since 2016, integrating performance management and 
sectoral objectives into budgetary planning and implementation. The main systemic changes aimed at achieving results-
based budgetary formation are the following: 

The legal and practical introduction of annual expenditure reviews from 2016; The basic objective of the 

1) 
expenditure review system is to enhance the accountability of sectoral ministries in achieving political and operational 
results that correspond to their expenditure, and to endeavour to achieve the best results possible with the lowest possible 
level of investment (public expenditure). One of the tasks of the Finance Ministry is to draw up proposals regarding 
decisions to be adopted by the Government to deal with discrepancies in results achieved or where the achievement of 
results (objectives) is no longer relevant, in order to eliminate Latvia’s shortcomings relating to the absence of 
consequences, as shown in box 3.4. 

The performance and budget interconnection platform is based on the transfer of a large number of budgetary 

2) 
programmes (used in Latvia mainly as financial management tools) to political fields (sectors/ lines of action), drawing 
on the a 2015 transnational analytical assessment of public sector achievements in 36 countries carried out by the 
Netherlands. The platform has been named ‘Political and resource management maps’. It enables the meaningful and 
substantive matching of political objectives, political indicators, operational indicators and quality indicators with 
budgetary expenditure and other investment indicators. At the same time, by using this format sectoral ministries have 
significantly improved the quality of their result indicators, there are practically no formal indicators and all information 
stems from political or institutional strategic planning documents. 

22 

 
 
Completely new interactive public information tools have been introduced: an interactive budget (inspired by the 

3) 
interactive budgets used in the USA and Ireland) (http://www.fm.gov.lv/valstsbudzets/) and an interactive tool for 
reading explanations of sectoral budgets 
(http://www.fm.gov.lv/lv/sadalas/valsts_budzets/interaktivais_budzets/valsts_budzeta_vizualizacija/). The objective of 
the interactive budget is to demonstrate to any interested party the main areas of expenditure and the corresponding 
political results that will be achieved. The objective of the tool for reading budget explanations is to enhance public 
access to a broad range of analytical information to accompany the Law on the budget and to explain its contents. The 
newly designed Political and resource management maps form the structural basis for both of these interactive tools. 
Using eye-catching but simple infographics, including through social media and outdoor advertising (see these visual 
examples: http://www.fm.gov.lv/lv/aktualitates/infografikas/). 

From 2017 the procedure for assessing and approving priority budgetary measures has been renewed, with much 

4) 
greater emphasis being placed on linking planned new expenditure measures with political results, specific achievable 
goals and tasks defined in Government declarations, and also assessing the impact of new measures on the economy and 
the significance of structural reforms. 

Luxembourg: Action taken: ; Action completed: ; Completion date: 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text/graph conveys the state of play. 

Slovenia: Action taken: YES; Action completed: NO; Completion date: 

MZI Reply: Slovenia seeks primarily to enhance rational budget use by using tools such as programme budgeting and 
statements of expenditure, which has led to some progress, though not all objectives have yet been achieved (such as 
content development or use in decision-making). 

Spain: Action taken: YES; Action completed: ; Completion date: 

As regards the assessment of project performance, the Court notes in its report that it found projects without result 
indicators in 11 of the 14 Member States from which it sampled transactions; this occurred very frequently in Bulgaria, 
Spain and Italy for ERDF and Cohesion Fund projects, and in Ireland and Spain for ESF projects. According to the 

23 

 
 
Court, in those countries, more than half of the completed projects examined had no result indicators or the indicators 
were not consistent with the Operational Programme. 

Spain considers that, by their very nature, result indicators cannot be linked to a project. However, they can be used to 
give a more general indication, for example by measuring the impact of a given policy or government initiative, beyond 
the scope of the project itself. For 2014-2020, targets have been set at Specific Objective level for the result indicators, 
and a number of projects and initiatives are assessed in this way. If the outcome of a given project is to be assessed, 
productivity indicators should be used. It is this difference in criterion that caused the Court to find errors in 11 of the 14 
countries sampled. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. 

France: Action taken: YES; Action completed: YES; Completion date: // 

The Ministry of Economy and Finance has indeed undertaken a reduction in the number of objectives. 

the  French 
In  August  2001 
Parliament  passed 
legislation 
(21)  establishing  new  rules  for 
preparing  and  implementing  the 
state  budget.  Between  2014  and 
2017, this involved the Ministry 
and  Finance 
of  Economy 
of 
number 
the 
reducing 
objectives  and  indicators  by  20 
% and 24 % respectively. 

and 

2012 

2013, 
introduced 

the 
In 
Netherlands 
an 
‘accountable  budgeting’  reform 
which  set  stricter  conditions  for 
the  government’s  use  of  policy 
information 
(performance 
indicators  and  texts  explaining 
policy  objectives).  The  number 
in 
of  performance 
budget documents was halved. 

indicators 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

24 

Paragraph 
3.22.(i) 

Paragraph 
3.22.(ii) 

 
 
 
Box 3.5  

The EU has more objectives and 
indicators (per billion euro) than 
France or the Netherlands 

Paragraph 
3.28 

In 
the 
the  Netherlands, 
measurement  and  reporting  of 
indicators  is  subject  to  audit. 
reports 
Annual  ministerial 
contain  a  mandatory  feedback 
section  on 
the  reliability  of 
performance information. 

France: Action taken: YES; Action completed: YES; Completion date: // 

S.O. 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Paragraph 
3.33 

Good  practices  in  Australia,  in 
France  and  at  the  World  Bank 
are illustrated below. 

France: Action taken: YES; Action completed: YES; Completion date: 

The visual aids show the action taken in a more accessible way. 

Box 3.8 

France:  State  General  Budget 
results report uses pictures rather 
than text 

France: Action taken: YES; Action completed: YES; Completion date: 

The visual aids show the action taken in a more accessible way. 

Paragraph 
3.43.(iii) 

by 

is  part  of 

In  the  UK,  the  Accountability 
report  which 
the 
Annual  Report  and  Accounts 
departments 
presented 
the 
includes  a  statement  of 
accounting 
officer’s 
relevant 
responsibilities.  The 
paragraph of this statement reads 
as  follows:  ‘I  also  confirm  that 
this  annual  report  as  a  whole  is 
and 
balanced 
fair, 
understandable, 
take 
and 
personal  responsibility  for  the 

I 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. UK quoted as good practice in accountability statements. 

25 

 
 
 
judgments 

annual  report  and  accounts  and 
for 
the 
fair, 
determining 
balanced and understandable’. 

required 
is 

that 

it 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

UK quoted for good practice in tracking government services performance. 

Paragraph 
3.46 

Paragraph 
3.48 

In  the  Netherlands,  the  Ministry 
of  Finance  has  a  single  website 
that  carries  all  official  Dutch 
budget 
with 
documents 
information on the planning and 
achievement  of  results,  lessons 
from  evaluations  and  major 
policy  changes.  Documents  are 
sorted  by  type  and  year  (and 
other  relevant  sub-categories)  to 
help 
Brief 
navigation. 
descriptions give an overview of 
the  purpose  and  content  of  the 
various document types. 

The  UK  Government  tracks  the 
performance 
government 
of 
services  through  a  ‘performance 
platform’ 
(https://www.gov.uk/performanc
e).  The  platform  is  part  of  the 
central  government  website, 
which  also  includes  a  database 
of government publications. The 
database  has  a  user-friendly 
interface  and  several 
search 
useful  filters  (publication  type, 
policy  area,  department,  official 
document status, world location, 
and publication date). 

26 

 
 
Box 3.16 

Common  problems  identified  in 
the  environment, 
reports  on 
energy and climate change 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

The information provided is descriptive in nature and does not require any action to be taken. 

Slovakia: Action taken: NO; Action completed: NO; Completion date: 

Ministry of the Economy: 

The Ministry of the Economy is the central state authority for the energy sector, including nuclear fuel management and 
the storage of radioactive waste and energy efficiency. As coordinator (at Member State level) for the Bohunice 
programme, the Ministry’s remit extends to aid for decommissioning the V1 NPP under Council Regulation (Euramis) 
No 1368/2013. Under the Bohunice programme, about EUR 30 million in aid has been earmarked for decommissioning 
NPP V1 in the 2014-2020 programming period. The rules governing aid are laid down in Commission Implementing 
Decision C(2014) 5449 final of 7 August 2014. In follow-up to the ECA's recommendations (report 22/2016), talks have 
begun on updating all programmes’ (SK, LT and BG) rules on managing and monitoring the progress of 
decommissioning. If necessary, measures will be incorporated in the internal rules for the Bohunice programme. 
Preparations are under way for updating the timetable for decommissioning the V1 NPP. 

Lithuania: Action taken: YES; Action completed: NO; Completion date: 

Ignalina Nuclear Power Plant is being decommissioned in accordance with the final decommissioning plan for Ignalina 
Nuclear Power Plant approved by decision of the Minister for Energy (‘the Plan’). The Plan must be reviewed every five 
years. Currently in force is the Plan updated by Order No 1-230 of the Minister for Energy of 25 August 2014. Among 
other things, the date for completing the decommissioning of Ignalina Nuclear Power Plant has been revised from 2029 
to 2038. The following factors exerted the greatest influence on the decision to change the date: 

1. 
Delay (of 31 months) in the construction of an interim spent fuel storage facility (‘project B1’), caused by a 
dispute (partly relating to the nuclear safety of the project) which arose between VĮ Ignalinos atominės elektrinė (the 
sponsor) and the consortium between NUKEM Technologies GmbH and GNS (the contractor) with regard to the contract 
for the implementation of project B1 signed on 13 January 2005.  

In 2013, VĮ Ignalinos atominės elektrinė and the contractor resolved the substantive technical issues and agreed on an 
approach for the further implementation of project B1. Construction under project B1 was completed in 2015, and in 
2017 VĮ Ignalinos atominė elektrinė obtained a licence to operate the interim spent fuel storage facility. 

Delay in dismantling the reactor installations of the first and second generating units (63 months). This delay was 

2. 
influenced by the delay in construction of the interim spent nuclear fuel storage facility and a worldwide lack of 
experience in dismantling reactor installations. For these reasons, the sequencing of the tasks to be performed to 
dismantle the reactor installations and the time needed to plan and carry out the dismantling work were assessed 

27 

Paragraph 
3.57.(ii) 

were 

where 

delays 

Timeliness (SR 22/2016): nearly 
all  key  infrastructure  projects  in 
the three audited Member States 
had  experienced  delays.  The 
in 
longest 
Lithuania, 
the 
decommissioning  end-date  had 
been postponed by nine years to 
2038;  (SR  31/2016):  we  found 
that 
ambitious  work  was 
underway  to  reach  the  target  to 
spend  at  least  20  %  of  the  EU 
on 
budget 
climate-related  action,  but  there 
is  a  serious  risk  that  this  target 
will  not  be  met.  Overall,  the 
Commission  estimates  that  18,9 
%  would  be  spent  on  climate 
action,  thereby  falling  short  of 

2014-2020 

for 

 
 
the 20 % objective. 

incorrectly. 

Demolition and site remediation works on the second generating unit (14 months) which were not previously 

3. 
included in the Plan. It should be noted that more than 12 projects of various sizes were not included in the calculations 
for the previous version of the Plan. 

The management bodies of VĮ Ignalinos atominės elektrinė, which is responsible for decommissioning Ignalina Nuclear 
Power Plant, have taken the following measures to improve (streamline) the management of the company and the 
planning and monitoring of the projects it carries out: 

On 1 March 2013, changes to the undertaking’s upper management took effect (a new Director-General, Head of 

1) 
the Decommissioning Department, Head of the Finance Department and Head of the Prevention Division were 
appointed). 

2) 

In 2015 the earned value management method for checking project implementation began to be applied. 

In 2015 a project management office was established and further developed within the company. Units of the 

3) 
company involved in performing planning and control functions were structurally separated from implementation units.  

On 1 March 2015 a new performance-based salary system began operating. The new salary system enables an 

4) 
employee’s basic salary to be linked to the employee’s skills and the performance of his or her tasks; gives the 
administration of the company the possibility of promoting highly performing employees; enables the undertaking to 
manage its payroll more effectively and control future cost increases, i.e. ensure stability of the salary fund and the 
fairness and openness of the internal remuneration system; enables the undertaking to attract the most suitable specialists, 
be competitive on the labour market, and manage the company’s human resources more effectively. 

A procedure for assessing employee performance in the company was approved, with the aim of assessing work 

5) 
performed by the company’s employees against assessment criteria, providing employees with feedback on the work they 
do, identifying employees’ training and professional development needs, and discussing the atmosphere, administrative 
processes and working conditions in the structural unit and other issues associated with the duties of the employee or the 
organisation of work within the team. In 2016 the criteria and indicators for assessing employee performance were 
reviewed and the performance assessment procedure was improved by linking employees’ individual indicators for 
assessing the achievement of tasks/objectives with the objectives and targets of the company/structural unit and with a 
functional competences model.  

In 2016 two independent members were appointed to the company’s management and a permanent Audit and 

6) 
Risk Committee was established, subordinate to the management and accountable to it. The main functions of this 
Committee are to make the management of the company more effective by drawing up and submitting independent 
recommendations to company management in the areas of risk management, control and external and internal audit. 

7) 

In 2017 a balanced system of indicators has been devised and is being introduced in the undertaking. 

28 

 
 
COM reply 
to paragraph 
3.57.(ii) 

at 

that 

The 

level 

Timeliness  (SR  22/2016):  The 
the 
Commission  noted 
decommissioning  programmes 
are 
of 
different 
advancement and maturity in the 
three  Member  States.  The 
Bohunice  (SK)  and  Kozloduy 
(BG)  programmes  are  the  most 
advanced  and  scheduled 
for 
completion  in  2025  and  2030 
respectively. 
latter 
programme  was  shortened  by  5 
years  when  it  was  revised  in 
the 
2011.  In  Ignalina  (LT), 
the 
decommissioning 
of 
Chernobyl-type  reactors 
is  a 
first-of-a-kind  process  which 
the  greatest 
actually  entails 
challenges. 
were 
incurred in the past multi-annual 
financial  framework.  Controls 
and management structures have 
subsequently  been  reinforced  to 
mitigate  the  issues  encountered. 
the  progress 
Notwithstanding 
the 
already 
the 
Commission 
continuous 
need 
improvement 
the 
decommissioning programmes. 

recognised 

achieved, 

Delays 

for 

in 

8) 

9) 

By the end of 2017, the undertaking will have had to introduce a risk management system. 

Other measures are being taken as well. 

Bulgaria: Action taken: YES; Action completed: NO; Completion date: 31.12.2030 

Мinistry of Еnergy Steps have been taken both at institutional level and with the contractors on the ground to implement 
the scheduled projects and actions.  

Significant progress has been made on key projects linked to the decommissioning and the management of radioactive 
waste (RAW), as well as dismantling operations in the turbine hall.  

We would specifically highlight the progress made on three major projects: plasma melting facility for treating solid 
RAW with a high-volume reduction factor, construction of a compaction and decontamination shop and construction of a 
national radioactive waste repository. The first two projects will be completed and commissioned in the first half of 2018. 
Construction on the national radioactive waste repository started in August 2017 and is scheduled for completion in 
2021. The decommissioning plan has been revised. 

Lithuania: Action taken: YES; Action completed: NO; Completion date: 

Slovakia: Action taken: NO; Action completed: NO; Completion date: 

Ministry of the Economy: 

The Ministry of the Economy is the central state authority for the energy sector, including nuclear fuel management and 
the storage of radioactive waste and energy efficiency. As programme coordinator (at Member State level), its remit 
extends to aid for decommissioning the Bohunice V1 NPP under Council Regulation (Euramis) No 1368/2013. Under the 
Bohunice programme, about EUR 30 million in aid has been earmarked for decommissioning NPP V1 in the 2014-2020 
programming period. The rules governing aid are laid down in Commission Implementing Decision C(2014) 5449 final 
of 7 August 2014. In follow-up to the ECA's recommendations (report 22/2016), talks have begun on updating all 
programmes’ (SK, LT and BG) rules on managing and monitoring the progress of decommissioning. If necessary, 
measures will be incorporated in the internal rules for the Bohunice programme. Preparations are under way for updating 
the timetable for decommissioning the V1 NPP. 

29 

 
 
 
 
 
Paragraphs 

Observations in the ECA's 
2016 Annual Report 

Member States' replies 

CHAPTER 4 – Revenue 

Paragraph 
4.4 – footnote 
3  

Paragraph 
4.4 – footnote 
3 

into 

account 

Member 

The 
States’ 
contributions  were  recalculated 
taking 
the 
following:  —  A  reduced  VAT 
call  rate  of  0,15  %  applies  to 
Germany,  the  Netherlands,  and 
Sweden,  while  the  call  rate  for 
the other Member States remains 
0,3 %. 

into 

account 

Member 

The 
States’ 
contributions  were  recalculated 
the 
taking 
Lump-sum 
following:  — 
reductions 
GNI-based 
in 
payments were given to Austria, 
Denmark,  the  Netherlands  and 
Sweden. 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

Austria: Action taken: NO; Action completed: ; Completion date: 

Reduction of the GNI contribution is confirmed. 

Denmark: Action taken: YES; Action completed: YES; Completion date: 31/12/2016 

The amendments entailed by the entry into force of the new system of EU own resources were incorporated into the 
budgeting for Denmark’s contribution to the EU in 2016. 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

Box 4.3 

the  new  own-
Impact  of 
resources  decision  on  individual 
Member  States’  contributions  in 
2014 and 2015 

Austria: Action taken: NO; Action completed: ; Completion date: 

Information from the EU’s consolidated annual accounts. No remarks. 

Belgium: Action taken: ; Action completed: ; Completion date: 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

30 

 
 
Croatia: Action taken: YES; Action completed: YES; Completion date: 23.12.2016, 2.1.2017 

Further to the entry into force of Council Decision 2014/335/EU, Euratom on own resources, Croatia has fulfilled its 
obligations and made the payments to the EU budget on 23 December 2016 and 2 January 2017. 

Cyprus: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Denmark: Action taken: YES; Action completed: YES; Completion date: 31/12/2016 

The amendments entailed by the entry into force of the new system of EU own resources were incorporated into the 
budgeting for Denmark’s contribution to the EU in 2016. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: ; Action completed: ; Completion date: 

No comments. 

France: Action taken: YES; Action completed: YES; Completion date: // 

France had to pay an additional EUR 1.1 billion in 2016 under the new decision on the system of own resources on 
Member State contributions in 2014 and 2015. 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: YES; Action completed: YES; Completion date: Ongoing 

Hungary is paying its contribution to the EU budget in line with the new own resources decision. 

Ireland: Action taken: YES; Action completed: YES; Completion date: 30/12/2016 

Ireland made the ORD associated payment (for 2014 and 2015) in December 2016. 

Italy: Action taken: ; Action completed: ; Completion date: 

Latvia: Action taken: YES; Action completed: YES; Completion date: 30.12.2016 

The new Council Decision of 26 May 2014 on the system of own resources of the European Union affected Latvia’s 
payments in 2014 by EUR 2 420 460 and in 2015 by EUR 4 320 280 – a total of EUR 6 740 740. This retroactive figure, 

31 

 
 
representing the difference between the amounts Latvia would have paid under the 2014 Decision and the amounts it 
actually paid on the basis of Council Decision of 7 June 2007 on the system of the European Communities’ own 
resources, was transferred to the EU budget on 30 December 2016 as an advance payment. 

Lithuania: Action taken: YES; Action completed: YES; Completion date: 30/12/2016 

Contributions to the EU budget were paid on time. 

Luxembourg: Action taken: ; Action completed: ; Completion date: 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 7.10.2015 

The new Own Resources Decision (Decision 2014/335/EU, Euratom) entered into force on 1 October 2016, with 
retroactive effect from 1 January 2014, once its ratification by the 28 Member States was complete. In Portugal Decision 
2014/335/EU was approved by Resolution No 132/2015 of the Assembly of the Republic of 19 June 2015, ratified by 
Presidential Decree No 119/2015 of 7 October 2015. For Portugal the retroactive effect of the entry into force of the new 
Decision amounted to EUR 77 069 484 in the years 2014 and 2015. 

Romania: Action taken: YES; Action completed: YES; Completion date: 03/01/2017 

Following the entry into force of Decision 335/2014 on the system of own resources of the European Union, the general 
impact of the retroactive application for 2014 and 2015 was an increase in Romania’s contribution to the EU budget. The 
amount relating to this increase was made available to the Commission on 3 January 2017. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text/graph conveys the state of play. 

Slovenia: Action taken: YES; Action completed: YES; Completion date: 29 December 2016 

Reply of the Ministry of Finance (MF): On 29 December 2016, Slovenia made a one-off payment as a result of the 
retroactive effect of the entry into force of the new Decision on the system of own resources of the European Union. 

32 

 
 
Paragraph 
4.6.(d) 

Paragraph 
4.11 

Spain: Action taken: YES; Action completed: YES; Completion date: 

Reduction in the percentage of Traditional Own Resources (TOR) retained by the Member States to cover collection 
costs. This percentage now stands at 20 %. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. UK included in table of impact on MS contributions of ‘own resources’ decision. 

Belgium: Action taken: ; Action completed: ; Completion date: 

Bulgaria: Action taken: YES; Action completed: NO; Completion date: 

Customs Agency The Bulgarian customs authorities accept the ЕСA’s preliminary findings from the audit in respect of 
the DAS 2016. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

Applying the audit approach and 
methods set out in Annex 1.1, in 
2016 we examined the following 
for  revenue:  the  systems  for 
TOR 
including 
postclearance  audits,  in  three 
States 
selected 
Member 
and 
(Belgium, 
Sweden). 

accounting, 

Bulgaria 

We  compared 
forecast  with 
provisional  GNI  data  for  all 
Member  States.  The  differences 
were  not  generally  significant. 
However, 
reported 
Ireland’s 
GNI increased very significantly 
in  2015.  This  was  a  result  of 
multinational 
companies 
relocating  R&D  assets  to  the 
country (see Box 4.4). 

Ireland: Action taken: YES; Action completed: ; Completion date: 

The national accounts results published on 14 July 2017 included preliminary estimates for key recommendations made 
by the Economic Statistics Review Group (ESRG), convened by the Central Statistics Office (CSO) last autumn and 
which reported in December 2016. These were an indicator of the overall size or level of the economy (modified Gross 
National Income or 'GNI*') and a modified total domestic demand indicator that focuses on activity within the Irish 
economy. Both are designed to exclude significant globalisation effects that disproportionately affect the Irish economic 
results.  

In the annual results, the transition from a GDP level of €275.6 billion in 2016 to a modified GNI (or GNI*) level of 
€189.2 billion is shown. The time series is available from 1995 onwards.  

GNI* is defined as GNI less the effects of the profits of re-domiciled companies and the depreciation of intellectual 
property products and aircraft leasing companies. It is designed as a supplementary indicator of the level of the Irish 
economy for use in ratio analysis as an alternative to GDP. For instance, in 2016, the government debt to GDP ratio stood 
at 73%, while the result for the equivalent debt to GNI* ratio was 106%.    

Quarterly national accounts (QNA) releases now also include a modified Total Domestic Demand indicator. This time 

33 

 
 
Box 4.4 

Relocations  of  R&D  assets:  the 
impact  on 
Ireland’s  national 
accounts 

series, available from 1997, helps to give users an insight into underlying domestic demand.  

Modified Total Domestic Demand is defined as Total Domestic Demand less the effects of the trade in aircraft by aircraft 
leasing companies and the imports of intellectual property.   

It is designed to be more closely related to employment growth as it is focuses on the physical capital used to produce 
domestic output.  

The CSO plan to continue delivery of the remaining recommendations over the second half of 2017 and into 2018 and 
progress on this work will be reviewed by the group. 

Ireland: Action taken: YES; Action completed: ; Completion date: 

The national accounts results published on 14 July 2017 included preliminary estimates for key recommendations made 
by the Economic Statistics Review Group (ESRG), convened by the Central Statistics Office (CSO) last autumn and 
which reported in December 2016. These were an indicator of the overall size or level of the economy (modified Gross 
National Income or 'GNI*') and a modified total domestic demand indicator that focuses on activity within the Irish 
economy. Both are designed to exclude significant globalisation effects that disproportionately affect the Irish economic 
results.  

In the annual results, the transition from a GDP level of €275.6 billion in 2016 to a modified GNI (or GNI*) level of 
€189.2 billion is shown. The time series is available from 1995 onwards.  

GNI* is defined as GNI less the effects of the profits of re-domiciled companies and the depreciation of intellectual 
property products and aircraft leasing companies. It is designed as a supplementary indicator of the level of the Irish 
economy for use in ratio analysis as an alternative to GDP. For instance, in 2016, the government debt to GDP ratio stood 
at 73%, while the result for the equivalent debt to GNI* ratio was 106%.    

Quarterly national accounts (QNA) releases now also include a modified Total Domestic Demand indicator. This time 
series, available from 1997, helps to give users an insight into underlying domestic demand.  

Modified Total Domestic Demand is defined as Total Domestic Demand less the effects of the trade in aircraft by aircraft 
leasing companies and the imports of intellectual property.   

It is designed to be more closely related to employment growth as it is focuses on the physical capital used to produce 
domestic output.  

The CSO plan to continue delivery of the remaining recommendations over the second half of 2017 and into 2018 and 
progress on this work will be reviewed by the group. 

Paragraph 

Commission 

The 
reacted 
promptly to the increase in  GNI 

Ireland: Action taken: YES; Action completed: ; Completion date: 

34 

 
 
4.12 

Paragraph 
4.15 

States 

data  submitted  by  Ireland,  and 
verified  the  reasonableness  of 
for 
the  methodology  used 
compiling 
Ireland’s  national 
accounts.  The  Commission  also 
asked  Member 
to 
complete  a  questionnaire  on 
R&D and other issues relating to 
multinational 
activities.  The 
Member States’ replies indicated 
insufficient 
had 
that 
information  in  this  regard.  As  a 
result, the Commission had only 
limited  information  about  how 
these issues  had been  dealt with 
in the compilation of GNI. 

they 

focused 

collecting 

We  examined  the  collection  of 
TOR  in  Belgium,  Bulgaria  and 
our 
Sweden.  We 
analysis  on:  the  compilation  of 
the  A  accounts;  the  procedures 
for 
amounts 
registered in the B accounts; and 
post-clearance 
(see 
paragraph  4.6).  We  did  not 
identify 
significant 
problems  in  the  compilation  of 
the  A  accounts,  but  we  noted 
recurrent  shortcomings  in  the 

audits 

any 

the 

The national accounts results published on 14 July 2017 included preliminary estimates for key recommendations made 
by the Economic Statistics Review Group (ESRG), convened by the Central Statistics Office (CSO) last autumn and 
which reported in December 2016. These were an indicator of the overall size or level of the economy (modified Gross 
National Income or 'GNI*') and a modified total domestic demand indicator that focuses on activity within the Irish 
economy. Both are designed to exclude significant globalisation effects that disproportionately affect the Irish economic 
results.  

In the annual results, the transition from a GDP level of €275.6 billion in 2016 to a modified GNI (or GNI*) level of 
€189.2 billion is shown. The time series is available from 1995 onwards.  

GNI* is defined as GNI less the effects of the profits of re-domiciled companies and the depreciation of intellectual 
property products and aircraft leasing companies. It is designed as a supplementary indicator of the level of the Irish 
economy for use in ratio analysis as an alternative to GDP. For instance, in 2016, the government debt to GDP ratio stood 
at 73%, while the result for the equivalent debt to GNI* ratio was 106%. 

Quarterly national accounts (QNA) releases now also include a modified Total Domestic Demand indicator. This time 
series, available from 1997, helps to give users an insight into underlying domestic demand.  

Modified Total Domestic Demand is defined as Total Domestic Demand less the effects of the trade in aircraft by aircraft 
leasing companies and the imports of intellectual property.   

It is designed to be more closely related to employment growth as it is focuses on the physical capital used to produce 
domestic output.  

The CSO plan to continue delivery of the remaining recommendations over the second half of 2017 and into 2018 and 
progress on this work will be reviewed by the group. 

Belgium: Action taken: ; Action completed: ; Completion date: 

Reply from SPF Finances [the Federal Public Finance Service]: In 2014 Belgium introduced an automated system (debt 
database) for recording debts in the B account. This system provides for much more efficient monitoring of the debts 
registered. The system still needs to be complemented by an automated system for ongoing investigations in respect of 
traditional own resources. This is currently under development. The remarks on the B account concern mainly very old 
files. Furthermore, when assessing these files, the Commission adopts a stricter approach than the one taken at the 
moment of registration. 

Bulgaria: Action taken: YES; Action completed: NO; Completion date: 

Customs Agency The Bulgarian customs authorities accept the ЕСA’s preliminary findings from the audit in respect of 
the DAS 2016, specifically as regards the risk of error inherent in the manual compilation of the data from the integrated 
customs information system (BIMIS) for the B accounts. As part of the project to re-configure the national system for 

35 

 
 
management of the B accounts.  making declarations, one component of which is the module for managing customs debt and traditional own resources, 
consideration is being given to automating the process, in order to reduce manual operations and the risk of human error 
to a minimum. 

Paragraph 
4.17 

of 

framework 

As  in  previous  years,  we  found 
in  how  Member 
weaknesses 
identify 
select 
and 
States 
importers 
undergo 
to 
postclearance audits, and in how 
these  audits  are  carried  out. 
Sweden and Bulgaria had set out 
their 
post-
clearance controls in accordance 
with  the  Commission’s  customs 
in 
audit 
Belgium  post-clearance  controls 
the 
were  selected  based  on 
characteristics 
individual 
the  risk 
transactions,  not  on 
profiles  of  companies;  and  we 
observed 
that  post-clearance 
audits were not generally carried 
out. 

guide.  However, 

of 

Sweden: Action taken: YES; Action completed: YES; Completion date: 

The ECA’s observations are correct,  and the amounts have been made  available to the Commission (reporting periods 
201609 and 201701) 

Belgium: Action taken: ; Action completed: ; Completion date: 

Reply from SPF Finances [the Federal Public Finance Service]: In the 2017 NOP (as in the 2016 NDP) indicators are 
provided for carrying out ABC controls and follow-up audits, which are determined in accordance with the risk level of 
the operators concerned in the medium-sized operator category. (ABC and follow-up audits: indicators R.1.7.6.1, 
R.1.7.6.2, R.1.7.6.3 and R.1.7.6.4).  

ABC controls are also carried out on the basis of local risk analyses (indicators R.1.7.8.1 and R.1.7.8.2).  

Ex post checks are also carried out based on the risk level established for the consignment and the operator (CAP 
indicators: R.1.6.6.1, R.1.6.6.2, R.1.6.6.3 and R.1.6.6.4) 

Bulgaria: Action taken: YES; Action completed: YES; Completion date: 

Customs Agency In preparing, carrying out and reporting on the checks that form part of post-clearance control, the 
Bulgarian customs authorities apply the Methodological guide for customs checks in the framework of post-clearance 
control approved by the Director of the Customs Agency, which is in line with the Commission’s customs audit guide. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

Paragraph 
4.18 – 
footnote 17 

In  July  2016  the  Commission 
noted  that  six  Member  States 
either did not carry out any post-
clearance  audits  or  did  not 
provide  any  information  about 
these  audits.  These  Member 
States accounted for about 20 % 
of all customs duties collected in 
the  EU.  Belgium,  Estonia,  Italy, 

Belgium: Action taken: ; Action completed: ; Completion date: 

Reply from SPF Finances [the Federal Public Finance Service]: In the 2017 NOP (as in the 2016 NDP) indicators are 
provided for carrying out ABC controls and follow-up audits, which are determined in accordance with the risk level of 
the operators concerned in the medium-sized operator category. (ABC and follow-up audits: indicators R.1.7.6.1, 
R.1.7.6.2, R.1.7.6.3 and R.1.7.6.4).  

ABC controls are also carried out on the basis of local risk analyses (indicators R.1.7.8.1 and R.1.7.8.2).  

Ex post checks are also carried out based on the risk level established for the consignment and the operator (CAP 

36 

 
 
Portugal, Romania and Slovenia. 

indicators: R.1.6.6.1, R.1.6.6.2, R.1.6.6.3 and R.1.6.6.4) 

Estonia: Action taken: ; Action completed: ; Completion date: 

Italy: Action taken: YES; Action completed: YES; Completion date: 8/08/2017 

On 27 April 2017 the Customs Agency provided all the customs offices with clarification on the scope of application and 
the methodologies for post-clearance audits (PCA). Operational instructions for PCA were added on 18 August 2017. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Details are given below of Portugal’s control activities as contained in the annual report provided for in Article 17(5) 
of Regulation (EC,  Euratom) No  1150/2000 of 22 May 2000 for 2015 and 2016,  which  include the customs import 
declarations subject to post-clearance checks (number of items): 

2015 - CONTROL ACTIVITIES 

Control activities 

Total customs import declarations accepted under the normal procedure (number of 
SAD accepted) 
Total customs import declarations accepted under the normal procedure (number of 
items) 
Total customs import declarations accepted under the simplified procedure (number 
of items) 
Total customs import declarations subject to post-clearance checks (number of 
items) 
Total number of staff in customs departments at national level 

Total number of staff assigned to post-clearance checks at national level 

2016 - CONTROL ACTIVITIES 

Control activities 

Total customs import declarations accepted under the normal procedure (number of 
SAD accepted) 
Total customs import declarations accepted under the normal procedure (number of 
items) 
Total customs import declarations accepted under the simplified procedure (number 
of items) 

37 

Number 

285 378 

456 093 

741 471 

28 228 
901.1 

136.41 

Number 

308 454 

458 507 

12 859 

 
 
 
 
Number of customs import declarations subject to post-clearance checks 
(number of items) 
Total number of staff in customs departments at national level 

Total number of staff assigned to post-clearance checks at national level 

28 346 
860.1 

128.46 

Romania: Action taken: YES; Action completed: NO; Completion date: N/A 

In accordance with the definitions accepted at the European Commission, Romania carries out transaction-based ex-post 
checks in order to recover circumvented customs duties. The results of these checks are periodically reported to the 
Commission, as requested, as ‘other ex-post checks’.  

Concerning the amendment of the customs declarations on the basis of the audit of the system of the economic operator, 
this method of re-verifying customs declarations has never been applied in Romania, and at present the necessary 
legislation for implementing and carrying out these checks does not exist. 

However, in order to improve the quality and efficiency of the re-verifications of customs declarations submitted and 
accepted by the Romanian customs authorities, after monthly meetings to analyse the activities at national level, in the 
second half of 2016 training sessions were given in accordance with the schedules in the Annex. The training areas 
included the following: b. Development of ex-post check competences in accordance with the guide to customs audits 
drawn up by TAXUD in 2014 and the Commission’s Working Document of 4 July 2016. 

Moreover, after the publication in Brussels, on 11 March 2016, of the document TAXUD/B2/047/2011 – Rev.6, on 
GUIDANCE for the authorisation of AUTHORISED ECONOMIC OPERATORS (approved by CCC-GEN (subsection 
on AEO) on 11 March 2016), Order No 1486/2016 of 29 April 2016 was drawn up and implemented approving the 
Technical rules for granting authorised economic operator status. These rules regulate the pre-audit of applicants for 
AEO authorisations, which consists of verifying the system of the economic operators. If there are irregularities in the 
application of the customs legislation in the sample checked, the specific issues are verified in a subsequent transaction-
based customs check. 

We would point out that the specific national customs legislation is currently being updated. Should it be deemed 
necessary, this aspect will be analysed with a view to taking the necessary measures to apply best practices at EU level in 
subsequent customs checks. 

Slovenia: Action taken: YES; Action completed: NO; Completion date: / 

MF reply: Slovenia considers in this respect that it involves an error of European Commission, which submitted incorrect 
information to the EDF regarding post-clearance audits. Slovenia submitted the required reports to the Commission both 
as part of the 2015 Annual Report, which was submitted to the European Commission on 9 March 2016, as well as 
subsequently after a notice from the Commission at the meeting of the Advisory Committee on Own Resources (ACOR). 

38 

 
 
In its letter of 14 October 2016, Slovenia officially submitted the additional information regarding the number of staff in 
the customs authorities carrying out post-clearance audits. Slovenia also informed the Commission and the EDF of the 
error in the report at the Budget Committee meeting of 6 October 2017. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

The UK does not accept OLAF’s estimate of the evaded duty and is engaging with the Commission and OLAF on this 
issue. The relevant UK authorities are taking all necessary steps to respond to the threat of fraud. 

Paragraph 
4.20 

by 

corroborates 

The  information  provided in  the 
2016  annual  activity 
reports 
published  by  DG  Budget  and 
Eurostat 
our 
observations  and  conclusions. 
We  note  that  DG  Budget  had 
made  a  reservation  on  TOR  not 
collected 
the  United 
Kingdom. This was the result of 
an  OLAF  investigation  into  the 
valuation  of  imports  of  textiles 
and footwear from China; OLAF 
report  and 
issued 
final 
its 
recommendations 
in  March 
2017.  The  amount  of  TOR 
concerned  by  the  reservation  is 
yet 
to  be  confirmed  using 
information  to  be  supplied  by 
the United Kingdom. 

Annex 4.2 

Numbers  of  outstanding  GNI 
reservations,  VAT  reservations 
and for TOR open points by MS 
at 31.12.2016 

Austria: Action taken: YES; Action completed: NO; Completion date: 

Regarding VAT reservations:  

As at 31.12.2016 there were 10 VAT reservations (8 issued by the Commission, 2 by AT).  

A brief overview of these 10 reservations is given below. Some of the reservations have been lifted in the interim (see 
column ‘status as of October 2017’). As of 1 October 2017 there were only four reservations issued by the Commission 
left.  

39 

 
 
 
 
Heading & Subject 

Issued by 

Period 
covered  

Status as of 
October 2017 

Description 

R.1 Receipts 

(SI2.34083 & 
SI2.34084) 

SE Small firms 

(SI2.34085 & 
SI2.34086) 

XB.9 Buildings 

(SI2.34087 & 
SI2.34088) 

XB.10 Passenger 
transport 

(SI2.34089 & 
SI2.34090) 

OC.1 Other 
compensation 

(SI2.24058 & 
SI2.29497) 

OC.2 Other 
compensation 

Legal aspects 

(SI2.32336 & 

COM 

for 2013 - 
2014 

Lifted 

Revise the adjustment for unspecified 
tax payments and remove the 
adjustment for creditors 

COM 

2014 

Maintained 

Field covered by next control visit 

COM 

for 2013 - 
2014 

Maintained 

New method developed – field covered by 
next control visit  

COM 

2014 

Lifted 

Revision using latest available data 

COM 

AT 

AT 

for 2004 - 
2014 

for 2004 - 
2014 

Lifted 

for 2006 - 
2010 

Lifted 

COM 

for 2010 - 
2014 

Maintained 

40 

Sport and cultural services 

(Infringement No 2007/2453) 

Postal services 

(Infringement No 2010/2055) 

Travel agents 

(Infringement No 2012/2124) 

 
 
SI2.32337) 

Legal aspects 

(SI2.34001 & 
SI2.34002) 

Legal aspects 

(SI2.34003 & 
SI2.34004) 

Re open TOR issues:  

COM 

for 2012 - 
2014 

Maintained 

High-sea vessels 

(EU-pilot 2016/8323) 

COM 

for 2012 - 
2014 

Lifted 

Home-made distillates 

(EU-pilot 2016/8461) 

The various measures taken are set out in the letters to the European Commission (Ref. BMF-010313/0149-
IV/6/2017 and BMF-010313/0658-III/10/2017). 

Belgium: Action taken: YES; Action completed: NO; Completion date: 

Reply from the Paying Agency for Wallonia: Four reservations remain; the reservation in respect of flat-rate farmers has 
been lifted.  

Reservation 1: Correction for flat-rate farmers 

This reservation was lifted by the inspection report of 6 February 2017.  

Reservation 2: Exemption of consumption on board means of transport 

The underlying legal problem dates back to 2009 and was discussed with the Member States several times in a wider 
context (e.g. at the Fiscalis Workshop in Ankara in 2015), although the Commission has never clearly set out and 
adopted its final position. The Belgian tax administration will therefore urge the European Commission to provide 
definitive legal clarification of its position so that the file, which has been subject to a reservation in respect of own 
resources for years now, can finally be closed. 

In the meantime, for the purpose of calculating any potential compensation, previous forward studies have shown that the 
problem is confined to just one firm which operates under various legal personalities (Belgian and others). The firm in 
question has been contacted to obtain the information required to calculate any compensation due. The information 
requested has not yet been provided.  

Reservation 3: Exemption of company administrator activities (Infringement No 2014/4123) 

The European Commission's criticisms initially concerned the arrangements applicable to both natural and legal persons. 
Meanwhile, the arrangements applicable to legal persons have been adapted to meet the Commission’s requirements. For 

41 

 
 
natural persons, however, there was a difference of opinion between the Belgian government and the European 
Commission. Nevertheless, the two parties recently managed to reach a compromise, so that the infringement procedure 
is likely to be closed in the near future.  

Since there is no information in the VAT databases, a search will be carried out in the direct contributions data. It is 
unlikely that the information on company directors will be found in the actual tax returns, but it might well be available 
in the forms that have to be used to complete the tax returns. The question of how and to what extent this information is 
kept up to date in the Federal Ministry of Finance's databases remains uncertain. 

Reservation 4: VAT group (Cost-sharing associations) (EU-Pilot No 6781/14) 

We will look into the extent to which it is possible to identify these associations and their turnover. These associations 
have no longer been recorded as such in the Federal Ministry of Finance's databases since 2002. Following a legislative 
amendment, however, they will be required to register with the Tax Administration from 2016. 

Reply from SPF Finances [the Federal Public Finance Service]: As far as traditional own resources recorded in the B 
account are concerned, further to a new internal investigation, the objection to the payment of traditional own resources 
has been lifted and the financial liability accepted. A considerable number of these cases relate to files that are more than 
10, and sometimes even more than 20, years old. This re assessment is based primarily on the information now available 
to the Commission on the collection of traditional own resources. 

Bulgaria: Action taken: YES; Action completed: NO; Completion date: 

Customs Agency The table in Annex 4.2 shows four TOR open points as at 31.12.2016. The Bulgarian customs 
authorities would point out that there were only two open points as at 31.12.2016: points 3.1 and 3.3 (a) and (b) from 
Report No 14-26-1. The Bulgarian customs authorities submitted their comments on these points by letter to the Finance 
Ministry No 32-134410 dated 16 May 2016. 

The two closed points are points 3.1 and 3.2 from Report No 15-26-1, as per the Commission’s letter 
BUDG/B/03/TE(2016) 4057984 dated 2 August 2016. 

National Revenue Agency The Bulgarian authorities — National Revenue Agency, NSI and Finance Ministry — 
continue to take action to reduce the number of VAT reservations. As a result, on each inspection visit the Bulgarian 
authorities, in cooperation with the Commission representatives, enrich the sources of data used and improve the 
methodology and its description in the national VAT-base report for the purposes of the EU’s own resources.  

NSI Bulgaria submits to the Commission (Eurostat) on a regular basis (by 22 September each year), in the context of the 
national accounting procedures, figures for aggregate GNI and its components, and a report on the quality of the data in 
accordance with Article 2(2) of Council Regulation (EC, Euratom) No 1287/2003 of 15 July 2003 on the harmonisation 
of gross national income at market prices. Each year during the GNI Committee meeting in the autumn, Member States 
confirm the data submitted in September and the report on quality containing basic information on the data provided, any 

42 

 
 
changes in the sources and methods for compiling the data in the national accounts, and any changes in the data revision 
policy. 

In January of this year a mission was carried out in respect of the Report submitted in 2016 on the sources and methods 
for compiling data for GDP and GNI and the accompanying tables. After this mission, questions were sent to Bulgaria, 
and this bilateral process is still ongoing. A second EC mission is scheduled for December. 

At present Bulgaria has no reservations in respect of its GNI data. 

Croatia: Action taken: YES; Action completed: YES; Completion date: June 2016 

The Croatian Bureau of Statistics has performed additional calculations and corrected the calculations and procedures 
that were subject to reservations at the time of the control mission. 

Two corrections have been necessary, since the data concerned two years (2013 and 2014) and since all the matters 
subject to reservation needed to be addressed. 

The corrections comprised additional calculations, as requested, and correction of the weighted VAT rate. 

The following was carried out: 

• 

• 

• 

• 

• 

intermediate consumption of the missing industries in Sector 11; 

own-account investment in Sectors 11, 12. 13 and 15; 

investment in own housing construction in Sector 14; 

restriction of the right to deduct the cost of entertainment in all Sectors; 

restriction of the right to deduct the costs of cars, fuel and maintenance; 

correction of the calculation of deliveries and purchases of small entities, and the allocation of these values to the 

• 
categories household consumption and VAT-exempt activities. 

The final corrections for 2013 and 2014 were submitted in June 2016. The Commission stated that it had not been 
possible to verify the  improvements and work done on the measures, so this would be done during the next VAT control 
visit. 

Cyprus: Action taken: YES; Action completed: YES; Completion date: 10/10/2016 

Up to 31 December 2015 there were no reservations pending concerning VAT own resources.  

From 5 to 8 April 2016 a team of auditors from the European Commission’s Budget DG carried out an inspection of the 
VAT own resources bases for the years 2013-2014. During the inspection various points put by the European 
Commission inspectors were presented and explained, and the points of the VAT own resources bases statements in need 

43 

 
 
of improvement and/or further explanation were discussed. 

During the above visit, the European Commission (EC) issued one reservation, concerning vessels used for navigation on 
the high seas. The Commission launched a case against Cyprus under the EU-Pilot procedure on an exemption from 
VAT for vessels carrying fare-paying passengers or used for the purposes of commercial activity. The reservation was 
entered in the Audit Report for 2013 2014 dated 8 August 2016 (4205933). The Cypriot Authorities (Tax Department) 
gave their position on the matter in their Observations sent to the Commission on 10 October 2016. 

Please note that in the Draft Summary Report for 2013-2014 dated 26 October 2017 the Commission stated that it 
intended to remove this reservation as Cyprus has now made the necessary changes to deal with the infringement. The 
conclusions of the Draft Summary Report, the observations by Cyprus and the Commission’s Audit Report will be 
presented at the meeting of the Advisory Committee on Own Resources on 7 November 2017. 

Czech Republic: Action taken: YES; Action completed: NO; Completion date: 

As regards the findings of the 2016 report the Commission was satisfied with the measures and closed all three points of 
the report in September 2017. 

With regard to the individual points raised: 

Point 3.1: The modification of the system of customs declarations (specifically, the TARIC CZ calculation) will be 
launched no later than 31 December 2017.  

Point 3.2, sub-point A: The Czech Republic will consider the Commission’s recommendation only if warranted by 
specific circumstances when deploying the Surveillance 3 application under the UCC or the modernised (updated) 
national import system under the UCC. The Czech authorities accept sub-point B and the staff of the specialised 
department of the Customs Directorate-General have taken appropriate measures.  

Point 3.3: The new version of the Surveillance2 web application deployed on 24 November 2016 will allow unblocked 
items from customs declarations to be sent. Only blocked items referred to customs offices for verification (correction) 
will not be sent to DG TAXUD. As regards sending incorrect items to SURV2 with the label ‘R’, meaning that they are 
under review, the Commission accepted the reason given by the customs authorities as to why the proposed measure 
cannot be implemented. 

Open findings in the report for the year 2014, point 3.1: The customs authorities remain convinced that no error was 
made in implementing the DISCOUNT priority. They do agree, however, to the further action proposed by the 
Commission, namely to select 15 customs declarations hit by the risk profile with a view to establishing what control 
activities had been performed in respect of the customs value and what decisive reasons had led the customs authorities 
to terminate the verification and thus dispel the reasonable doubt.  

Open findings in the report for the year 2015, point 3.1: The customs authorities do not accept the Commission’s 
conclusions and they do not believe that they made any error in their decision-making. They also carried out the 

44 

 
 
requested national survey starting from 2012 and provided the Commission with all similar cases of debt cancellation 
including the required accounting information for the calculation of any default interest. 

Denmark: Action taken: YES; Action completed: NO; Completion date: 

VAT reservations:  

One reservation was open concerning business purchases of passenger cars, and two reservations concerning different 
aspects of passenger transport, one of which was entered by Denmark. Denmark sent material to the Commission 
concerning all three reservations, and this was discussed with the Commission during the audit visit in spring 2017. The 
audit cycle has not yet been completed, and the three reservations are still being dealt with.   

Audit report 11-1-1:  2 points 

Point 1 Information in relation to the local clearance 
procedure 

Answered on 4 May 2016 

Point 2 Risk management strategy 

Answered on 4 May 2016 

These points were unresolved at the time of the 2016 management declaration – 27.10.2017. 

Audit report 12-1-1: 4 points  

Point 1 Management of registration procedures 

Answered on 23 May 2016 

Point 2 RIF risk information 

Answered on 23 May 2016 

Point 3 Control standards. 

Answered on 7 October 2014 

45 

 
 
 
 
 
 
 
 
 
Point 4 Legal interpretation as regards entry in the 
accounts  

Answered on 7 October 2014 

These points were unresolved at the time of the 2016 management declaration – 27.10.2017. 

The report was completed by the European Commission on 6 September 2017. 

Audit report 13-1-1: 5 points  

Point 1 Amounts written off 

Answered on 21 March 2016 

Point 2 B Accounts 

Answered on 21 March 2016 

Point 3 Late payment 

Answered on 21 March 2016 

Point 4 Administrative error 

Answered on 21 March 2016 

Point 5 Repayment 

Answered on 21 March 2016 

These points were unresolved at the time of the 2016 management declaration – 27.10.2017. 

Audit report 14-1-1: 5 points  

Point 1 End-use authorisation 

Answered on 30 May 2016 

46 

 
 
 
 
 
 
 
 
 
 
Point 2 Audit 

Answered on 30 May 2016 

Point 3 IT systems.  

Answered on 30 May 2016 

Point 4 Financial responsibility  

Answered on 30 May 2016 

Point 5 Specific goods 

Answered on 30 May 2016 

These points were unresolved at the time of the 2016 management declaration – 27.10.2017. 

Audit report 15-1-1: 3 points  

Point 1 Risk profiles, etc. 

Answered on 28 November 2016 

Point 2 MA communications 

Answered on 28 November 2016 

Point 3 Sweeps 

Answered on 28 November 2016 

These points were unresolved at the time of the 2016 management declaration – 27.10.2017. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: YES; Action completed: NO; Completion date: 

Outstanding reservations are currently being processed.   

47 

 
 
 
 
 
 
 
 
 
 
France: Action taken: YES; Action completed: YES; Completion date: Measures are completed as and when, on the 
basis of exchanges between the French authorities and the Commission (DG Budget). Certain points are already closed, 
while others still require follow-up by both the French authorities and the Commission (where TOW are concerned). 

The number of outstanding VAT reservations for France does not seem correct. After the Commission’s inspection visit 
of December 2015, only three reservations on the VAT own resource statement remain: a 2012-2014 reservation on the 
‘XB.8 public water supply’ compensation relating to improvement of the method concerned, a 2008-2014 reservation 
relating to the 2011-2015 infringement (transport of goods between mainland France and Corsica), and a 2011-2014 
reservation relating to the 2015/4135 infringement 2015/4135 (services provided to individuals by not-for-profit 
assocations).  

As regards the number of open points concerning TOR at 31 December 2016:  

On the basis of DG Budget’s letters to the French authorities in 2016, at 31 December 2016 there were 27 open 

- 
points concerning TOR (against 38 at 1 January 2016). This figure is the result of the balance of closed points (15 in 
2016) and new points (4, in control report No 16-5-1). 

- 
At time of writing, the figure was down to 21 because 7 points were closed in 2017 (this calculation does not 
take account of partial closures which are additional to the quota of closures and show the dynamic of the exchanges 
between the Commission and France and the efforts of the French authorities to respond satisfactorily to the 
Commission’s recommendations and requests) while one new point appeared with report No 17-5-1. 

Moreover, as noted in 2015 and 2016 in response to the ECA’s comments in its annual reports on the implementation of 
the 2014 and 2015 budgets, many open points concern individual cases of amounts entered in or removed from the 
separate B account. They are closed as and when principle amounts due and any late-payment interest are made 
available, at the sole request of the Commission (DG Budget). 

No fewer than 6 reports were closed during 2016. 

The French authorities would emphasise that they monitor open points rigorously, in line with the deadlines set in the 
regulations, and that certain points remain open not because of any lack of diligence on their part but rather owing to the 
nature of the requests and recommendations made (requests for very broad national and multiannual studies; requests for 
the recasting of national rules in the light of a change in regulatory bases (expiry of the Community Customs Code — 
CCC — with the entry into force of the new Union Customs Code — UCC), etc.). 

As regards what measures have been taken: in the light of the foregoing the French authorities consider that they take the 
necessary measures on an ongoing basis, via the continuous monitoring of the open points; the continued reduction in the 
number of open points bears out this view. As regards the state of completion of the measures taken: since the measures 
are ongoing, there is no completion date as such; they are considered completed as and when they are implemented. 

Germany: Action taken: ; Action completed: ; Completion date: 

48 

 
 
NB: On 31.12.2016 there were 7 (not the 8 specified here) VAT reservations for Germany. 

Greece: Action taken: YES; Action completed: NO; Completion date: 

Hellenic Statistical Authority (ELSTAT) 

In cooperation with Eurostat 

Any other comment: In 2016 ELSTAT took specific action to lift the two reservations relating to GNI/GDP, namely 
reservation No 6 concerning the use of balance of payments data for ships and maritime transport, which needs to be re-
examined and the findings reassessed, where necessary (applicable to years from 2002 to 2010), and the reservation 
relating to FISIM (Financial Intermediation Services Indirectly Measured).  

1. 
To address reservation No 6, ELSTAT and the Bank of Greece are working together and each body drew up an 
action plan, based on which joint work will be carried out by the two bodies, as well as the exchange of know-how and 
information. The two action plans were sent to the European Commission (Eurostat) in September 2016 (30/09). Both 
action plans are aimed at establishing and maintaining a common statistical register of maritime companies and ships. 
The register will be updated regularly on the basis of harmonised procedures to be decided jointly by ELSTAT and the 
Bank of Greece at technical level with a view to meeting statistical needs as reflected in their annual work programme. 
An important element of the action plan of both bodies is the creation of a Joint Working Group bringing together 
ELSTAT and the Bank of Greece at senior level, the setting-up of which is compulsory under the agreement of 27 July 
2016 between the President of ELSTAT and the Governor of the Bank of Greece and a letter from the President of 
ELSTAT to the Governor of the Bank of Greece, which led to the settling of individual aspects of this cooperation. 

In response to the reservation concerning FISIM, ELSTAT worked in cooperation with Eurostat throughout 

2. 
2016. ELSTAT submitted the data requested by Eurostat. Eurostat is currently examining the data and communication is 
ongoing.  

MINISTRY OF FINANCE, Directorate for Indirect Taxation, Department A - VAT 

: During the audit to be carried out in Greece by officials (auditors) of the European Commission in December 2018 
concerning VAT, there is a possibility that the reservations may be reduced.   

Hungary: Action taken: YES; Action completed: ; Completion date: Ongoing 

The Hungarian authorities are cooperating with the relevant Commission departments in order to resolve the reservations. 

Ireland: Action taken: YES; Action completed: YES; Completion date: 31/08/2017 

See table below: 

Description 

Action Taken  

49 

 
 
Recording of 
“Research and training 
services”, “Teagasc”, 
“Other goods” and 
“Other overhead 
costs” 

This item is currently awaiting review/ acceptance  

Details were provided on the Recording of “Research and training services”, 
“Teagasc”, “Other goods” and “Other overhead costs with source data and 
breakdown of each expenditure item provided and included for the years 2010- 
2015.  A narrative also included in Ireland VAT-OR statement for the years 2010-
2015 to reflect this change.  

This item is currently awaiting review/ acceptance  

Calculation of input 
figures 

The source data for expenditure items and details of the breakdown/splits provided.  
Petrol/Diesel ratio for fuel consumption updated. Agriculture expenditure for 
marked gas oil directly linked to consumption estimates.  Other overhead cost 
broken down into each of the differed expenditure items.  

This item is currently awaiting review/ acceptance 

Calculation of the "on 
farm consumption" 

Figures were corrected and the use of year N data used for each of the years 
concerned (2013-2015). Personal on farm consumption of turf was removed for 
each of the relevant years.  

Taxation of local 
authorities’ services; 
expenditure on travel 
agents and tour 
operators in PCE; 
travel agents’ margin 
and IC of travel agents 
as non-deductible 
VAT; incorrect links; 
IC of other exempt 
sectors and cars; 
taxable entertainment 
services 

This item is currently awaiting review/ acceptance  

The outstanding points subsequent to the controlled inspection have been 
submitted for review. 

NPISHs, postal 
services, theatres, 

This item is currently awaiting review/ acceptance with the exception of NPISH 
which is expected towards the end of 2017. 

50 

 
 
heritage facilities and 
open farms and correct 
the WAR calculations 
in relation to these 
issues (for years 2013-
2015) 

Treatment of the 
transactions 
concerning the 
insemination services 
for animals and the 
presentational 
improvement 
concerning the 
expenditure on cars 
(for the year 2015) 

Provision of 
supporting document; 
evidence of 
competitive 
environment; update 
of WAR; removal of 
rounding and check 
RSI index used in 
2012 statement 

Link between 
supporting documents 
provided and 
calculations made 

Correction of errors in 
the calculation of the 
compensation; update 

WAR corrected for postal services, theatres, heritage facilities and open farms 
submitted for review. 

This item is currently awaiting review/ acceptance  

The treatment of artificial insemination services has been included in the WAR. 
Improvement concerning the expenditure on cars (for the year 2015) have been 
provided and included with the updated statements. 

This item is currently awaiting review/ acceptance  

Evidence of the competitive environment for SME provided and the application of 
the German method is consider as validated. The removal of rounding performed 
and the RSI index used in 2012 checked.  

This item is currently awaiting review/ acceptance  

The Link between the supporting documents and the calculations were provided 
for review. 

This item is currently awaiting review/ acceptance  

The Identified errors were corrected; the outdated ratio updated and the new ratio 
applied. Inclusion of government transport subsidise in the form of the Public 

51 

 
 
of old ratios; and 
possible impact of 
subsidies to 
transportation 
operators 

Provision of 
supporting documents; 
removal of all 
rounding and inclusion 
of formulas; 
estimation of certain 
shares, their 
justification and 
possible update; and 
removal of deduction 
for taxis 

Exemption of 
consumption on board 
ships or aircraft 

Exemption of fund 
management services 

service obligation payments were included for each of the years 2013-2015. 

This item is currently awaiting review/ acceptance  

The provision of supporting documents was provided; rounding issued and 
inclusion of formula were addressed. An updated templated providing the 
derivation was produced and submitted for review. 

This item is currently awaiting review/ acceptance  

A calculation providing an estimate for the total value of on-board consumption 
was submitted for each of the years 2007-2015 and is also included future 
statements from 2015. 

This item is currently awaiting review/ acceptance  

A calculation for the positive compensation estimate for the years 2010 to 2012 
relating to the treatment of funds managements has been submitted. 

NPISHs, postal services, theatres, heritage facilities and open farms and correct the WAR calculations in relation to these issues (for years 
2013-2015) 

At the time of the controlled  inspection it was not possible to address  the issue of NPISH as this required information 
which was not available  

For the first time, in July 2017 (NIE 2016 publication) NPISH has been separately identified in the National Accounts. 

52 

 
 
 
With the inception of a new survey which is aimed a collecting benefactor data in the state, it is hoped that Ireland will be 
in a position to estimate an expenditure breakdown for NPISH that is suitable for inclusion in the VAT-OR.  

Regarding the TOR open points, Revenue has noted the Court of Auditors’ observations in relation to the Traditional 
Own Resources. The items shown in Annex 4.2 refer to ‘open points’, and are not reservations. They are points of 
inspection reports which were open as of 31.12.2016 and form part of regular ongoing follow-up procedure of such 
reports. A number of these ‘open points’ have been dealt with since that date. 

Open points in relation to the 2011 EU inspection were addressed in correspondence with the Commission (DB Budget) 
on 01 December 2015. In relation to the 2013 open points, these were addressed in correspondence with the Commission 
on 20 January 2015 (points 3.2, 3.3 and 3.4). Point 3.6 was addressed in further correspondence sent to the Commission 
on 30 March 2015. All issues raised in the 2016 EU inspection report have been addressed. 

Italy: Action taken: YES; Action completed: YES; Completion date: 4/08/2017 

With regard to the special audit on VAT receipts carried out in September 2015, the Italian authorities have submitted to 
the European Commission the documentation required to enable the two long-standing reservations to be lifted. 
Confirmation of this result can be found in the European Commission’s summary document of 1 June 2016 (Ref. 
Ares(2016)2534376). 

An inspection of the 2014-2015 VAT receipts was carried out in December 2016. There were four reservations before 
that visit, one of them on the Italian side. During the audit, three of these reservations (all relating to Compensation XA.3 
‘Existing buildings and building land’) were lifted. The only remaining reservation, which was later extended to 2015, 
concerned the application of the VAT Directive, infringement case 2008/2010.  

Following this inspection, the Italian authorities received the intermediate report (Ref. Ares(2017)2424635 of 12 May 
2017) in which five reservations were indicated, including four new ones: two relating to the new data set used for 
Compensations XB.4 and XB.10, which may be validated during the next inspection visit and correction of a calculation 
error; one relating to the calculation method for 2014-2015 VAT receipts and the final one on the weighted average rate.  

Within the four weeks following the inspection, the Italian authorities submitted the information required to lift the 
reservation on the weighted average rate. Furthermore, in their replies to Commission observations submitted in August 
2017, the Italian authorities adjusted the calculation method for these receipts, as requested by the inspectors, and 
submitted the relevant adjusted calculations.  

It will only be possible to assess the outstanding 2017 reservations on receipt of the final inspection report due in 
November 2017. 

With regard to TOR open points, as the number of pending cases went from 12 in 2015 to 18 in 2016, the Customs 
authority sent a formal letter to the President of the Court of Auditors (letter ref.: 73420/ru of 28 June 2017), with a copy 
to DG BUDG, to express its disappointment in relation to some of the observations received at the end of the financial 

53 

 
 
audit carried out by the Court in December 2016. 

Latvia: Action taken: YES; Action completed: YES; Completion date: 09.12.2016(1st VAT reservation)/ 20.09.2017(2nd 
VAT reservation)/ 16.06.2017(1st TOR reservation)/ 22.05.2017(2nd TOR reservation) 

GNI reservations:  

According to the Commission’s letter ref. Ares(2016)7142012 of 22 December 2016, there are no longer any pending 
specific or transversal GNI reservations relating to Latvia. 

1st VAT reservation 

Within the framework of EU Pilot 6103/14/TAXU a question was raised regarding the compliance of the VAT 
exemption for management services for dwellings with Council Directive 2006/112/EC of 28 November 2006 on the 
common system of value added tax. 

The European Commission’s infringement proceedings No 2014/2233 were resolved through amendments to the Law on 
VAT of 30 November 2015, under which, as of 1 July 2016, the 21 % standard rate of value added tax is applicable to 
dwelling management services for residents.  

On 9 December 2016 information was received confirming that infringement proceedings No 2014/2233 have been 
terminated. 

2nd VAT reservation 

As a result of the European Commission’s request for information in EU Pilot 8518/16/TAXU relating to VAT 
exemption for cooperative societies, discrepancies were identified between Article 132(1)(f) or (l) of Council Directive 
2006/112/EC of 28 November 2006 on the common system of value added tax and the provisions of Article 52(1)(8) of 
the Law on VAT. 

The discrepancies were resolved through amendments to the Law on VAT of 20 April 2017, under which, as of 1 June 
2017, Article 52(1)(8) was deleted from the Law on VAT.  

On 20 September 2017 information was received confirming that EU Pilot EUP(2016)8518 has been closed 

1st TOR reservation 

With reference to paragraph 3.1 of report No 15-19-1 from the Commission, the Latvian authorities paid the requested 
interest of EUR 2 124.24 on 16 June 2017. Further to the European Commission’s letter BUDG/B/03/TE(2017)3971723 
of 9 August 2017 regarding follow-up measures relating to the Commission’s report No 15-19-1, there are no more 
unresolved issues and any further measures relating to this report are terminated. 

2nd TOR reservation 

54 

 
 
Paragraph 3.2.1.A of the inspection report states that, should the Latvian authorities be unable to demonstrate that the 
debt was established within a reasonable time (see ECJ ruling C-442/08 of 1 July 2010), they might be held financially 
liable for the loss of TOR if they fail to recover the customs debt and it has to be declared or deemed irrecoverable. In 
this regard, the European Commission’s letter Ares(2017)2380958 was received on 10 May 2017. The letter informs the 
Latvian authorities of the Commission’s view that the Latvian authorities had failed to provide evidence that they had 
conducted all necessary measures to ensure that the relevant amount is recovered and transferred to the Commission, and 
invites them to transfer the sum of EUR 681 567.50. This sum was transferred on 22 May 2017 along with the regular 
TOR payment. 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

According to the information provided, as at 31 December 2016 Lithuania has no outstanding GNI reservations, VAT 
reservations or TOR open points. 

Luxembourg: Action taken: YES; Action completed: YES; Completion date: 24/03/2017 (TOR Reservations),                         
not yet determined (VAT reservations) 

TOR reservations: Report 13-8-1 was definitively closed by the Commission on 24 March 2017. 

VAT reservations: We have sent DG BUDG the corrections, files and additional information relating to two reservations 
which it entered following the VAT own resources inspection in 2013 and seven reservations which it entered following 
the inspection in 2016. The summary document to be drawn up by DG BUDG, which will determine whether these 
reservations are lifted or maintained, has not yet been finalised at the time of writing. The tenth reservation, concerning 
an infringement of Community VAT legislation (case No 2011/2030), will certainly be maintained. At present no 
information is available regarding the financial impact of this infringement on the VAT own resources. 

Malta: Action taken: YES; Action completed: NO; Completion date: 

Legal action taken and the procedures are still ongoing 

Netherlands: Action taken: YES; Action completed: NO; Completion date: 

The Commission knows which parts of DG Budget's inspection reports the 46 open points relate to. For each of the open 
points the Netherlands has taken the necessary measures and is still in correspondence with the Commission on these 
matters. For 19 of the open points the Netherlands is still waiting for the follow-up reply from the Commission. In the 
case of the other points the onus is on the Netherlands to reply or provide further follow-up. 

Poland: Action taken: YES; Action completed: NO; Completion date: 

VAT 

Reservations may be made by Member States or the Commission in relation to the methodology or figures used in 
calculations of the VAT own resources base, and work on resolving the problems at issue in reservations and 

55 

 
 
subsequently having them lifted is an ongoing process based on close cooperation between the Member States’ 
authorities and the Commission. Accordingly, we believe that Annex 4.2 should contain the following information for 
Poland:  

Annex 4.2 – Numbers of outstanding GNI reservations, VAT reservations and TOR open points by Member State at 
31.12.2016 

Member State  VAT reservations (situation at 31.12.2016) 

Poland  5* 

* including one reservation made by the Polish authorities concerning the excessively broad scope of the VAT exemption 
for postal services 

TOR 

As regards the eight TOR ‘open points’ (situation at 31.12.2016): 

1) DG Budget inspection 08-22-1, point 3.2 

Action taken – yes 

Action completed – yes 

Completion date – 19 June 2017 

Other comments: sum made available 

2), 3) DG Budget inspection 14-22-1, points 3.1 and 3.2 

Action taken – yes 

Action completed – no 

Other comments: clarifications sent to the Commission on 22 September 2017 

4) DG Budget inspection 15-22-1, point 3.3 

Action taken – yes 

Action completed – no 

Other comments: clarifications sent to the Commission on 10 April 2017 

5)-8) DG Budget inspection 16-22-1, points 3.1-3.4 

Action taken – yes 

56 

 
 
Action completed – no 

Other comments: clarifications sent to the Commission on 14 April 2017 

Portugal: Action taken: ; Action completed: ; Completion date: 

POINTS OPEN IN THE REPORTS ON INSPECTIONS CARRIED OUT BY THE COMMISSION UNDER ARTICLE 
4 OF REGULATION (EU, EURATOM) NO 608/2014: 

• 

Report No 02-10-1 on the inspection visit carried out in Portugal from 3 to 7 June 2002 

Following this inspection the Commission asked the Portuguese authorities to send information to confirm that the 
conclusions of the two internal audit reports of the Inspectorate-General for Finance of 1999 and 2000 did not entail a 
financial impact on the Community budget.  

All the cases identified were sent to the Commission. 

A. 

Points open at 31.12.2016 

Point 3.7 of the report: Request for information on internal audit reports. 

Case 13/96 Aveiro customs office (point 3.2(c) of the 2013 report) 

This case concerns an amount of €23 198.34. 

The Commission did not agree with the Portuguese authorities that the amount in question should be corrected by the 
outstanding debt being time-barred; by letter No 2102912 of 20 May 2015 it requested payment of the amount in 
question, which was made available on 7 October 2015. 

The Commission, by letter No 2175247 of 10 May 2016, informed the Portuguese authorities that the resulting interest 
would be calculated in accordance with Article 12 of Regulation (EU, Euratom) No 609/2014 and this point would 
remain open until it was paid.  

Case 11/95 Peniche customs office (point 3.2(h) of the 2013 report, following up the 2002 report) 

The amount of €48 327.25 in this case was corrected on 17.9.1998 and the remaining €33 008.27 recorded as 
irrecoverable on 22.7.2004. Subsequently, on 5.5.2010, there was a further correction as the Leiria Administrative and 
Tax Court ruled that the outstanding debt was time-barred.  

By letter No 2175247 of 10 May 2016 the Commission requested payment of the amount in question and detailed 
information on the various recovery measures taken during the enforcement proceedings. 

We told the Commission that, in addition to the information requested by the Commission in that letter, the case would 
be followed up in the context of the report on the inspection of own resources which took place in 2013 (point 3.2), since 
it was one of the cases in the survey carried out by the Portuguese authorities, as requested by the Commission, to 

57 

 
 
identify all the amounts corrected since 2010 due to the impossibility of recovery as a result of time-barring. We also 
informed the Commission that conditional payment of the amount of €33 008.27 relating to this case was proposed to a 
higher authority (see reply to the Commission’s letter No 2309164 of 18 May 2016 concerning report No 13-10-1). 

Entry in the accounts No 900856/1995 from the former DRCCAL 

The €302 772.63 in this case was corrected because the outstanding debt was time-barred. 

The Portuguese authorities were asked in letter No 2102912 of 20 May 2015 to make available the amount concerned 
because it had been wrongly corrected. 

The amount in question was made available to the Commission on 7 October 2015. 

The Commission, by letter No 2175247 of 10 May 2016, informed the Portuguese authorities that the resulting interest 
would be calculated in accordance with Article 12 of Regulation (EU, Euratom) No 609/2014 and this point would 
remain open until it was paid. 

B. Current status 

Case 13/96 Aveiro customs office and entry in the accounts No 900856/1995 from the former-DRCCAL  

The amounts relating to these cases were made available on 7 October 2015. In its letter No 3734753 of 25 July 2017 the 
Commission expressed its satisfaction and requested payment of late-payment interest, something that we had already 
proposed to our superiors.  

Case 11/95 Peniche customs office  

We informed the Commission that the sum of €33 008.27 in this case, referred to in report No 13-10-1, had been made 
available. By letter No 1631658 of 27 March 2017 concerning the follow-up to report No 13-10-1 the Portuguese 
authorities were told that, given the amount was already available, the late payment interest would be calculated and 
notified. 

• 

Report No 08-10-1 on the inspection visit carried out in Portugal from 22 to 26 September 2008 

Points open at 31.12.2016  

Point 3.3: The customs debt could not be recovered because it was allowed to expire 

In this case (entry in the accounts of the Setúbal customs office No 900065/1996 of €170 919.69 that was corrected on 
28.5.2008) the time-limit in Portuguese law was exceeded. The Portuguese authorities were asked to make available the 
amount in question and to supply accounting information. 

However, we considered that the non-recovery of the own resources in question was not attributable to us; in July 2013 
we proposed making them available to the Commission conditionally and the amount was made available (conditionally) 

58 

 
 
in December 2013. 

We replied in August 2015 to the Commission's letter No 3030637 of 17 July 2015 requesting clarification of the legal 
principles underlying the financial liability of the Portuguese authorities for non-recovery of own resources. We are 
waiting for a reply. 

B. Current status 

Point 3.3 remains open pending the Commission’s reaction to the Portuguese authorities’ reply to letter No 3030637 of 
17 July 2015. 

In May 2017 we asked the Commission (via our Ministry’s Directorate-General for the Budget) what its position was on 
the clarifications requested by the Portuguese authorities.  

• 

Report No 11-10-1 on the inspection visit carried out in Portugal from 16 to 20 May 2011 

Points open at 31.12.2016  

Point 3.1: Papers relating to a write-off not available 

At the Marítima de Lisboa customs office a case was detected where an amount of €1 239.93 was deemed irrecoverable 
and removed from the B-account on 15.10.2009; the supporting documents were not available as part of the file. After 
examining the case, the Commission demanded payment of the amount because an optional guarantee was not asked for. 

We informed the Commission that, as requested, the amount in question was made available on 10.12.2013. 

The Commission requested confirmation of the date on which the €1 239.93 ought to have been deemed irrecoverable. 

In March 2015, in reply to letter No 2849987 of September 2014, we confirmed the Commission’s understanding of the 
date on which the amount should have been deemed irrecoverable. By letter No 2286310 of 17 May 2016, given that the 
amount in question was made available, the Commission told us that the amount of interest would be calculated and 
communicated in a separate letter; this point remains open until the amount is paid. 

Point 3.2 - Amount in the B-account written off and not made available where the debt arose prior to discharge of an 
economic customs procedure, and where a security was not held. 

At the Freixieiro customs office it was found that an established amount of €16 566.74 in the B-account was deemed 
irrecoverable on 14.9.2009 because the debt arose from the non-discharge of an inward processing suspension procedure. 

The Portuguese authorities have submitted additional information, as requested by the Commission. By letter No 
2286310 of 17 May 2016 the Commission requested additional information, which has already been sent. Case still open. 

Point 3.3: Cases not deemed irrecoverable in breach of Article 17(2) of Regulation (EC, Euratom) No 1150/2000. 

A number of cases were detected at the Freixieiro and Aveiro customs offices where the established amounts had 

59 

 
 
remained in the B-account for a period longer than five years without any administrative or legal appeal being lodged or 
partial payments being made; the Commission requested that these amounts be deemed irrecoverable and removed from 
the B-account. 

Additional information on these cases was requested by letter No 2286310 of 17 May 2016. The information requested 
has already been sent to the Commission. 

The Commission also requested a review of all cases that had remained in the B-account for longer than five years in 
order to check whether the non-recovery of the amounts involved was due to a lack of diligence on the part of the 
Portuguese authorities; we have already informed the Commission that the review of those cases is complete. 

Point 3.4: Delays in sending cases to the Commission and in recovery procedures 

Delays were encountered in reporting of all amounts declared/deemed irrecoverable in 2009; it was requested that the 
time limits be complied with, in accordance with Article 13 of Regulation (EU, Euratom) No 609/2014. By letter No 
2286310 of 17 May 2016 we informed the Commission that all cases involving amounts of more than €50 000 
declared/deemed irrecoverable had been notified to the Commission in accordance with the Regulation. This case is 
therefore now closed. 

There was also a long delay in the recovery procedure in a case at the Freixieiro customs office involving €20 276.43 
deemed irrecoverable in September 2009; the Commission requested further information on this case and this has already 
been sent. Case still open. 

B. 

Current status 

Four points remain open: 

Point 3.1  

Awaiting the Commission’s letter with the calculation of late-payment interest. 

Point 3.2 

The missing information requested by the Commission has been sent. 

Point 3.3  

The missing information in the Freixieiro case has been sent. 

As regards the assessment of all cases which had remained in the B-account for a period longer than five years and the 
possible liability of the Portuguese state for non-recovery of the amounts involved, the Commission asked in the above-
mentioned letter for the results of the investigation to be sent. It has been sent detailed information on the cases in 
question. 

60 

 
 
Point 3.4  

Concerning the case at the Freixieiro customs office, and in reply to the request in the Commission's last letter, we have 
sent the missing information to show that the non-recovery of the debt was not our fault. 

• 

Report No 12-10-1 on the inspection visit carried out in Portugal from 21 to 25 May 2012 

Points open at 31.12.2015  

Point 3.2: Information sought regarding an amount written-off in the B-account. 

A case was found in Alverca where entry in the accounts No 9000304/2007 of €8 578.26 was deemed irrecoverable on 
14.9.2009, and it was not clear to the Commission why. 

The Commission requested additional information, including the various steps taken to recover the debt up to the date 
when it was removed from the B account, which information has been provided. 

By letter No 2102841 of May 2015 the Commission asked for the amount owed to be paid and it was made available to 
the Commission on 7 October 2015. 

By letter No 5435317 of 19 September 2016 the Commission requested payment of €7 754.45 in late-payment interest; 
we sent our superiors a proposal in October 2016 that payment be made and, according to a notification from this 
Ministry’s Directorate-General for the Budget on 28.12.2016, the amount was made available on 27 December 2016. 

B. Current status 

By letter No 2039195 of 20 April 2017 the Commission informed the Portuguese authorities that, since the late-payment 
interest had been paid, point 3.2 was closed and, as it was the only one remaining open, the report was closed in its 
entirety. 

• 

Report No 13-10-1 on the inspection visit carried out in Portugal from 15 to 19 July 2013 

Points open at 31.12.2016   

Point 3.2: Shortcomings in the treatment of write-offs from the B account 

(a) The Portuguese authorities were questioned as to whether the non-recovery of the amounts in some cases detected at 
the Aveiro customs office was attributable to them. 

There were two cases where the Viseu Administrative and Tax Court ruled that the debts were time-barred and an appeal 
was made against that decision before the Central Administrative Court. 

In March 2015, in reply to the Commission’s letter No 3152071 of September 2014, we indicated that we were waiting 
for the court’s decision. 

61 

 
 
Subsequently, in reply to letter No 2309164 of May 2016, we told the Commission that the judgment of the 
Administrative and Tax Court (North) on the appeal in the two cases in question had been notified to the Portuguese 
authorities in March 2015. Following this, on 1 June 2015, these two cases were notified to the Commission via WOMIS. 
Case still open. 

(b) Concerning two cases at the Aveiro customs office (€94 560.89 and €69 776.08) the Commission did not agree with 
the Portuguese authorities that the amounts in question should be corrected by the time-barring of the outstanding debts 
(Cases 11/96 and 12/96 in the 2002 report).  

In March 2015 the Commission was informed that instructions would be drawn up for amounts corrected by the time-
barring of outstanding debts (instructions set out in Circular No 15383 of 15 July 2015), and that after the entry into force 
of those instructions we would propose to the higher authority that conditional payment be made of the amounts 
identified so as to avoid the accumulation of late-payment interest. 

(c) In another case recorded at the Aveiro customs office the amount was corrected and removed from the B-account on 
account of the time-barring of the debt; according to the Commission, the non-recovery of this debt was attributable to 
the Portuguese authorities. We informed the Commission that execution was suspended pursuant to Article 255(5) of the 
Tax Procedure Code by virtue of its being opposed and security provided. The outstanding amount was made available 
on 7 October 2015 in connection with inspection No 02-10-1. 

(d) In a case at the Aveiro customs office €34 859.99 was corrected following a court decision that the debt was time-
barred, and the Portuguese authorities were requested to make available the amount in question. We informed the 
Commission in March 2015 that we would draw up instructions for amounts corrected by the time-barring of the 
outstanding debt (instructions contained in Circular No 15383 of 15 July 2015). 

Concerning these three cases, on 31 December 2016 the situation was as follows:  

In reply to the Commission’s letter No 2309164 of 18 May 2016, we explained that in all the cases corrected following 
time-barring (between 1 January 2010 and 15 July 2015) we had sent our superiors a proposal that the total amount of the 
cases referred to in (b), (c) and (d) be made provisionally available to the European Union. 

(g) 19 entries were identified in the B-account which concerned the same operator and for which a total of €116 819.06 
had been declared irrecoverable; the Portuguese authorities were requested to consider making available the amount in 
question. We were also told that these cases should have been treated as a single case for the purpose of communication 
to the Commission under Article 13 of Regulation (EU, Euratom) No 609/2014. 

In reply to the Commission’s letter No 2309164 we sent our superiors a proposal that the amount in question, €116 
819.06, be made available to the Commission on a provisional basis until the Portuguese authorities or the Commission 
adopt their final position on the matter.  

B. Current status  

62 

 
 
Point 3.2(a) 

 This point is closed, according to the Commission’s letter No 1631658 of 27 March 2017. 

According to that letter, the following points are still open: 

Points 3.2(b), (c) and (d) 

The amounts in these cases were made available conditionally. By letter No 1631658 of 27 March 2017 the Commission 
informed the Portuguese authorities that it would calculate and communicate the late-payment interest due and these sub-
points would remain open until receipt of the corresponding payment. 

In reply to that letter, we informed the Commission that, as soon as analysis of the recovery procedures relating to those 
cases was complete, we would report on the results. 

Point 3.2(g)  

Since the amount of €116 819.06 was made available conditionally, the Commission said in letter No 1631658 of 27 
March 2017 that it would calculate and communicate the late-payment interest due and that this sub-point would remain 
open until receipt of the corresponding payment. 

In reply, we informed the Commission that, if the necessary conditions were met, the relevant cases would be submitted 
via WOMIS. 

• 

Report No 14-10-1 on the inspection visit carried out in Portugal from 19 to 23 May 2014 

Points open at 31.12.2016  

Point 3.2: Shortcomings in the treatment of write-offs from the B account 

In the case of an amount of €68 270.53 at the Marítima de Lisboa customs office, which was the subject of an enforced 
payment procedure, the debt was deemed time-barred by the Tax Office concerned. The amount in question was then 
corrected in the B-account on 30.6.2011. The Commission did not agree with the Portuguese authorities that the amount 
concerned should be corrected because of the time-barring of the outstanding debt. We have already drawn up new 
instructions – Circular No 15383 of 15 July 2015 – according to which amounts must be declared irrecoverable when the 
debt is declared to be time-barred. 

In reply to the Commission’s letter No 486543 of 29 January 2016 we told it that this case fell within the scope of the 
review conducted in connection with report No 13-10-1. 

B. Current status  

Point 3.2  

Since the amount in this case had already been made available in the follow-up to report 13-10-1, the Commission stated 

63 

 
 
in letter No 2585908 of 22 May 2017 that the report as a whole was now closed. 

• 

Report No 15-10-1 on the inspection visit carried out in Portugal from 5 to 9 October 2015 

Points open at 31.12.2016  

Point 3.1: Delays in making available recovered amounts of TOR 

The authorised agents carrying out the inspection found that the amounts of own resources resulting from the enforced 
recoveries carried out by the tax authorities were notified to the customs authorities with great time-lags, resulting in 
delays in making resources available. The Portuguese authorities were asked to set up a system that effectively 
eliminated delays.  

In reply to the Commission’s letter No 81245 of 7 January 2016, we told the Commission that, in follow-up to the audit 
of the European Court of Auditors concerning the statement of assurance DAS 2007, it would be informed of the results 
of the survey carried out among customs offices concerning the amounts of own resources recovered, the dates of 
recovery and their entry in the accounts for the purpose of making them available, and that efforts were being made to 
reduce the delays in making resources available. Case still open. 

Point 3.2: Deficiencies in the system to assess the responsibility of national authorities for the non-recovery of TOR. 

Two cases of enforced recovery – one at the Leixões customs office for a total of €66.30 and another at the Sines local 
customs office for €15 925.48 – revealed some weaknesses in communication between the customs and tax authorities. 

In reply to the Commission’s letter No 81245 of 7 January 2016, we sent our superiors a proposal to make available the 
€66.30 in the Leixões case. 

As regards the situation in the Sines customs office, in the same letter we explained that the €15 925.48 had been 
recovered by voluntary payment on 12.11.2015 and made available in February 2016. 

B. Current status 

Point 3.1  

This point is still open. By letter No 3910523 of 2017 the Commission again asked the Portuguese authorities to set up a 
system that would effectively eliminate delays and we replied that measures had been taken in the form of IT software to 
reduce delays in making resources available. 

Point 3.2  

Given that the amount in the Leixões case was a mere €66.30 that had been made available, the Commission said in its 
last letter that the accrued interest was negligible. Case closed. 

Regarding the case detected in the Sines local customs office, the Commission in the abovementioned letter asked us to 

64 

 
 
confirm that the €15 925.4 had actually been made available, and we confirmed that the sum had been made available to 
the Commission in February 2016. 

We are awaiting the Commission’s reply to letter No 3910523. 

• 

Report No 16-10-1 on the inspection visit carried out in Portugal from 4 to 8 April 2016 

Point 3.4 – Shortcomings in the B accounts  

Some remarks were made about two entries in the B-account of the Marítima de Lisboa customs office for amounts of 
€101 493.24 and €50 858.65, namely that there may be financial responsibility for their non-recovery. 

In reply to letter No 2468575 of 27 May 2016 we indicated that in both cases the conditions for the amounts to be 
declared irrecoverable under Article 13 of Regulation (EU, Euratom) No 609/2014 were not met. 

B. Current status 

By letter No 352422 of 23 January 2017 the Commission requested additional information on these two cases, which has 
already been sent. We are waiting for a reply. 

SUMMARY OF THE REVIEW OF THE REMAINING OPEN POINTS IN THE REPORTS DRAWN UP BY THE 
COMMISSION UNDER ARTICLE 4 OF REGULATION (EU, EURATOM) NO 608/2014 

New instructions on the accounting treatment of debts that are deemed time-barred have been drawn up – see 

• 
Circular No 15383 of 15 July 2015. According to these instructions amounts should be declared irrecoverable when the 
debt is declared time-barred; the review of cases where the amounts were corrected owing to time-barring has been 
completed and the amounts in question made available.  

The Commission has requested additional information about a number of points, and those points are therefore 

• 
still open. 

There are also a number of cases that are now being finalised, as the amounts in question have already been made 
• 
available to the Commission; in some of these cases we are waiting to receive the request for payment of the interest due. 

Romania: Action taken: YES; Action completed: YES; Completion date: 31/12/2015 

The GNI reservations were resolved by INS Romania and lifted by the Commission (Eurostat). 

As regards VAT own resources, according to the final conclusions of the COM Ref. Ares (2016)6425154 of 15 
November 2016 only the COM — RO general joint reservation on motor vehicle compensation remains in force. 
UCRBUE + INS 

As regards traditional own resources, 16 points in the European Commission’s inspection reports drawn up during the 
period 2011-2016 need to be resolved, as shown in the table above. DGV + UCRBUE 

65 

 
 
Slovakia: Action taken: YES; Action completed: NO; Completion date: 

Finance Directorate:  

The open points concerning traditional own resources (TOR) at 31 December 2016 concern TOR inspections by the 
Commission’s DG BUDG in 2013 and 2014. Just one point remained open from the 2014 inspection. It is the subject of 
ongoing discussions between the Finance Directorate and DG BUDG. All points from the 2013 inspection had been 
closed by 14 November 2016. 

Slovenia: Action taken: YES; Action completed: NO; Completion date: / 

MF reply: 

-23.9.2015 received EC report on TOR inspection;  

-30.11.2015 submitted reply (within legal deadline): the reply gave information / reported on measures taken in the light 
of the requirements of individual points of the Commission communication (set out in the attachment “Reply to EC reply 
to EC report 15-24-1”)  

-20.6.2016 material for the July 2016 ACOR meeting “Brief summary of the position of the Commission services on the 
findings relating to 14 traditional own resources inspections” published on the CIRCA website (03-ACOR-TOR-2016-7-
agenda-03-EN-consolidated document), which indicates that the EC will close points 3.1, 3.2a, 3.2b in 3.3, with further 
information required for points 3.2c and 3.4. 

- 6.7.2016 MF sent letter No 0600-4/2015-23 “Information related to the open points of European Commission Report 
No 15-24-1 on the inspection of traditional own resources”, which provides the additional information required for points 
3.2c and 3.4. 

There has been no calls or activities from the Commission since that date. 

- 14.10.2016 the MF sent the Commission documentation with additional information (e-mail “Additional information 
from General Financial Office…”). 

We consider that there are 4 points relating to TOR that are still unresolved, in the light of ACOR material for the July 
2016 which had incorrect or not updated data in a table. 

The measures adopted for all four points are given in the reply to the report (30.11.2015) and the measures adopted for 
the open points 3.2c and 3.4 relating to the ACOR meeting of 7.7.2016 are set out in the letter “Information relating to 
open points of the TOR inspection (6.7.2016).  

Slovenia has provided the Commission with information and reported on measures relating to both points. 

Spain: Action taken: YES; Action completed: ; Completion date: 

66 

 
 
VAT RESERVATIONS: As of 31 December 2016, the Commission’s only reservation regarding VAT relates to Spain’s 
exempting certain services sold thorough gift boxes for the years 2011 to 2015 (Infringement No 2015/4105). Spain does 
not accept this reservation for the year 2011 (Spanish position set out at the meeting of the Advisory Committee on Own 
Resources-VAT on 8 November 2016) as it was notified in the final Spanish-language version of the VAT inspection 
report for 2012-2013, dated 27 August 2015, by which point the time limit for the 2011 financial year had already 
expired.  

 Following the publication in the Official Journal of the European Union on 1 July 2016 of Council Directive (EU) 
2016/1065 of 27 June 2016 as regards the treatment of vouchers, Spain has been able to assess and correctly calculate 
compensation in view of the new VAT treatment of vouchers; this calculation was given to the Commission during its 
control visit to Spain on 12-16 June 2017. A few aspects still need to be reviewed in the calculations at the Commission’s 
request, but it is hoped that the Commission will be able to lift this reservation in the coming months. Furthermore, Spain 
amended its administrative practice for these transactions in accordance with the new taxation rules set out in the 
Directive by means of the binding decision of the Directorate-General for Taxation of 26 October 2016. 

TRADITIONAL OWN RESOURCES RESERVATIONS: Open points resulting from checks on traditional own 
resources are followed up by the European Commission (DG Budget) with the Member State concerned. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: YES; Action completed: NO; Completion date: 

The UK continues to cooperate and engage with the Commission to address the outstanding reservations. The European 
Commission is in the process of verifying and validating all Member States' methods and sources underpinning their 
estimates of GNI on the basis of the European System of Accounts 2010 (ESA 2010).  The UK continues to cooperate 
proactively and engage on a regular basis with the European Commission to address the GNI Actions already agreed and 
have ensured this is treated with top priority.  At present, the UK do not have any ESA 2010 based GNI Reservations. 
The UK has also made good progress with the Commission during the last two VAT OR inspections in 2015 and 2017. 

Greece: Action taken: YES; Action completed: NO; Completion date: 

Completion date: In cooperation with Eurostat  

Any other comment: ELSTAT cooperates with Eurostat on the implementation of measures to continuously improve the 
preparation of its annual and quarterly national accounts. These measures are part of the Joint Overall Statistical Greek 
Action Plan (JOSGAP), which was drawn up in 2010 by the Commission and the Greek authorities. Pillar B of the action 
plan contains a series of measures to strengthen the national accounts.  

The measures include the implementation of programmes to upgrade the annual national accounts, upgrade the regional 

67 

Annex 4.3 

Follow-up 
previous 
of 
recommendations  for  revenue: 
the  Commission  should  put  in 
place  and  closely  monitor  a 
detailed  action  plan  with  clear 
milestones 
the 
problems  in  the  compilation  of 
Greece's national accounts 

address 

to 

 
 
and quarterly national accounts and improve sector accounts. To achieve this goal, a series of visits of experts have 
taken/are taking place to provide technical support with regard to annual and quarterly national accounts. The continuous 
support and training of ELSTAT staff responsible for drawing up the national accounts is also an important factor 
contributing to the improvement in the quality of production. 

68 

 
 
 
 
 
Paragraphs 

Observations in the ECA's 
2016 Annual Report 

Member States' replies 

CHAPTER 6 – Economic, social and territorial cohesion 

Paragraph 
6.2 – footnote 
2 

For  both  the  2007-2013  and 
2014-2020 
programming 
periods,  the  CF  is  of  relevance 
to Bulgaria, the Czech Republic, 
Croatia, 
Greece, 
Estonia, 
Lithuania, 
Cyprus, 
Latvia, 
Hungary,  Malta, 
Poland, 
Portugal, Romania, Slovenia and 
Slovakia. Spain was also eligible 
during  2007-2013,  but  only  for 
transitional support. 

Bulgaria: Action taken: NO; Action completed: ; Completion date: 

Ministry of Labour and Social Policy OP HRD comes under the ESF and not the CF, for which disparities are noted. 

Croatia: Action taken: YES; Action completed: ; Completion date: 

2007-2013 period Approximately €858.2 million was available to Croatia in the ESI funds. The majority of the funds 
were used in four operational programmes: 

Regional Competitiveness - investment from the European Regional Development Fund and the Cohesion Fund 

- 
(€187.7 million); 

- 

- 

- 

HR Development - investment from the European Social Fund (€152.4 million); 

Transport - investment from the European Regional Development Fund (€236.9 million); 

Environment - investment from the Cohesion Fund (€281 million); 

2014-2020 period Approximately €10.74 billion is available to Croatia in the ESI funds. The majority of the funds are 
being used in four operational programmes: 

Competitiveness and Cohesion 2014-2020 - Investment from the European Regional Development Fund and the 

- 
Cohesion Fund (€6.881 billion); 

- 

Efficient HR - investment from the European Social Fund (€1.58 billion); 

Rural Development Programme of Croatia - investment from the European Agricultural Fund for Rural 

- 
Development (€2 billion); 

- 

Maritime and Fisheries - investment from the European Maritime and Fisheries Fund (€235 million). 

In addition, Croatia also participates in another 13 European territorial cooperation programmes with both Member States 
and third countries.   

Like most other Member States, Croatia only began effectively implementing the 2014-2020 programme in 2015 by 
launching grant procedures aimed at SMEs and rural development, and by carrying out a handful of direct award 
procedures for larger projects of known, pre-selected applicants.   

69 

 
 
Besides awarding grants to applicants, Croatia has also been using ESI funds through the following two implementation 
mechanisms since 2016: 

Financial instruments (FI) - following two ex-ante analyses, which showed a need to introduce FIs in certain 

- 
areas, HAMAG-BICRO and HBOR (both of which have signed financing agreements) were put in charge of 
implementing six FIs for SMEs; this marked the first stage in the development of a system for implementing FIs in the 
area of energy efficiency;   

Integrated territorial investment for urban development projects in 7 large pre-selected cities/towns. In addition, 

- 
pilot implementation of another territorial mechanism began at the end of 2016, concerning selected deprived areas 
affected by issues typical of post-war recovery. 

Cyprus: Action taken: YES; Action completed: NO; Completion date: 31/12/2023 

Both the funds of FP 2007-2013 and those of FP 2014-2020 are distributed according to National Strategic Planning, 
which records and analyses the needs and the strategic goals of Cyprus with the objective of ‘achieving sustainable 
economic growth in the context of social cohesion’. As a result, measures implemented through the Operational 
Programmes co-financed by the EU Cohesion Policy Funds, including European Territorial Cooperation Programmes, 
help both to improve the competitiveness of the Cypriot economy and create upgraded infrastructure that will serve to 
narrow the gap with the other EU Member States, and also develop interregional cooperation. 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Estonia: Action taken: ; Action completed: ; Completion date:: 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: ; Action completed: NO; Completion date: 

Factual finding, no action required. 

Latvia: Action taken: YES; Action completed: NO; Completion date: 

Environmental and transport measures have been initiated in the framework of the EU Structural and Cohesion Fund 
2014–2010 programming period operational programme ‘Growth and Employment’ (approved on 11 November 2014 by 
Commission Decision C(2014)8505, through the launch of projects covering specific support objectives under priority 
axis 5 ‘Environmental protection and efficient use of resources’ and priority axis 6 ‘A sustainable transport system’ 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

The information provided is descriptive in nature and does not require any action to be taken. 

70 

 
 
Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Romania: Action taken: ; Action completed: ; Completion date: 

No reply needed (MDRAPFE) 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text conveys the state of play. 

Slovenia: Action taken: YES; Action completed: NO; Completion date: 

Reply of the Government Office for Development and European Cohesion Policy (SVRK): Slovenia is eligible for 
funding from the Cohesion Fund under FP 2007-2013 and FP 2014-2020. Detailed measures for drawing down from this 
fund (for transport, environment and energy infrastructure) for 2007-2013 are listed in the “Operational Programme of 
Environmental and Transport Infrastructure Development (OP ETID), while for the current programming period there are 
listed in the 2014 2020 OP ETID. Measures to deploy CF funding for 2007-2013 have been completed, while measures 
to deploy CF funding under the current programming period are in the implementation phase. 

Spain: Action taken: NO; Action completed: ; Completion date: 

In 2007-2013, Spain received transitional support through this Fund, which explains why it did not participate in the 
2014-2020 programming period. 

Bulgaria: Action taken: NO; Action completed: ; Completion date: 

Ministry of Labour and Social Policy OP HRD comes under the ESF, on which no observations were made. 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: NO; Action completed: ; Completion date: 

71 

Paragraph 
6.5.(a) – 
footnote 5 

A sample of 180 transactions, in 
line  with  paragraph  7  of  Annex 
1.1. The sample was designed to 
the  full 
be  representative  of 
range  of  spending  under  this 
MFF  heading.  It  consisted  of 
transactions  from  14  Member 
one 
States, 
European 
Territorial 
Cooperation  (ETC)  programme; 

included 

and 

 
 
Bulgaria,  the  Czech  Republic, 
Germany, 
Ireland,  Greece, 
Spain,  Italy,  Hungary,  Malta, 
Poland,  Portugal,  Romania, 
Slovakia,  the  United  Kingdom 
and the Greece-Bulgaria ETC. 

National Coordination Authority 

Observation 2 concerns essentially the description of the scope and approach of the audit and therefore it does not call for 
an answer relating to action taken. In 2016 an audit was indeed carried out on four (4) projects of the 2007-2013 ‘Greece-
Bulgaria’ European Territorial Cooperation (ETC) Programme. 

Hungary: Action taken: NO; Action completed: ; Completion date: 

Factual finding, no action required. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

No action required. 

Italy: Action taken: ; Action completed: ; Completion date: 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Romania: Action taken: YES; Action completed: NO; Completion date: 

With regard to POSDRU 2007-2013, in 2016 the European Court of Auditors carried out two audit inspections which 
verified the legality and regularity of the expenses declared and reimbursed from the European Social Fund on 9 March 
2016 (AP 43) and 27 June 2016 (AP 44). For these two audit inspections, 8 operations financed under the operational 
programme were selected at random.  

To investigate the observations in the 6 audit findings in DAS 2016 (PF7861 – 2 observations and PF 7865 – 4 
observations), the Managing Authority and the intermediary bodies managing the projects audited have taken steps 
wherever necessary to establish and recover the non-eligible expenses, pursuant to the applicable national legislation.  

The status of the 6 audit findings drawn up following verification of the 8 operations financed under POSDRU 2007-
2013 is as follows:  

- 

- 

- 

for 2 findings, the establishment and recovery of the non-eligible expenses has been finalised; 

for 1 finding, the matters identified in the 2014-2020 programming period have been remedied; 

for 1 finding, the establishment of the non-eligible expenses has been finalised and the debt is currently being 

72 

 
 
recovered;  

- 

for 2 findings, the observations made are being investigated. 

With regard to POR 2017-2013, the European Court of Auditors has carried out two audit inspections to verify the 
legality and regularity of the expenses declared and reimbursed from the ERDF in the period 21-28 November 2016 (PF-
7836) and 9-19 January 2017 (PF-7837), for which the preliminary audit reports have been received. During each audit 
inspection, 4 operations (projects) financed under the Regional Operational Programme were selected at random.  

For the findings in the 2 preliminary audit reports, the information and documents requested held by the Managing 
Authority and intermediary bodies managing the projects audited were sent, and information was given on the state of 
play of the steps taken with regard to the audit findings drawn up following verification of the 8 operations. 

With regard to AM POS CCE 2007-2013, in 2016 a single audit inspection was carried out by the European Court of 
Auditors (ECA), which endorsed the regularity and legality of the expenses declared by the European Commission in the 
declaration of expenditure of 27 April 2016 for the amount of €90 128 144.64.  

The reply to the findings and recommendations in the report was sent by letter No 911/ RP/ 8 May 2017.   

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text conveys the state of play. 

Spain: Action taken: YES; Action completed: YES; Completion date: 30/6/2017 

The Member State has cooperated with the auditors from the Court of Auditors in accordance with procedures. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. ECA examined various FI and activity reports, including UK. 

Bulgaria: Action taken: NO; Action completed: ; Completion date: 

Ministry of Labour and Social Policy OP HRD comes under the ESF, on which no observations were made. 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: NO; Action completed: ; Completion date: 

National Coordination Authority 

Observation 2 concerns essentially the description of the scope and approach of the audit and therefore it does not call for 
an answer relating to action taken. In 2016 an audit was indeed carried out on four (4) projects of the 2007-2013 ‘Greece-

73 

Paragraph 
6.5.(b) – 
footnote 6 

sample  of  12 
under 

financial 
A 
instruments 
shared 
management,  in  eight  Member 
States.  Bulgaria,  Germany, 
Greece,  Italy,  Poland,  Portugal, 
Slovakia 
the  United 
Kingdom. 

and 

 
 
Paragraph 
6.17 – 
footnote 14 

The  Member  States  that  had 
enacted  all  three  directives  by 
that date are the Czech Republic, 
Denmark,  Germany,  Greece, 
France,  Italy,  Ireland,  Hungary, 
Cyprus,  Latvia,  Malta, 
the 
Netherlands,  Poland,  Romania, 
Slovakia,  Sweden 
the 
United Kingdom. 

and 

Bulgaria’ European Territorial Cooperation (ETC) Programme. 

Italy: Action taken: ; Action completed: ; Completion date: 

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text conveys the state of play. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. ECA examined various FI and activity reports, including UK. 

Cyprus: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Denmark: Action taken: YES; Action completed: YES; Completion date: 

The three Directives have been implemented in Denmark and therefore no further action has been taken. 

France: Action taken: YES; Action completed: YES; Completion date: 2016 

The transposition of directives in France was carried out by the deadlines set by the Commission:  

Directive 2014/23/EU was transposed in full by the publication of the following: Decree No 2014-1341 of 6 November 
2014 amending Decree No 2010-406 of 26 April 2010 on public works concession contracts and laying down various 
provisions relating to public procurement (Décret n° 2014-1341 du 6 novembre 2014 modifiant le décret n° 2010-406 du 
26 avril 2010 relatif aux contrats de concession de travaux publics et portant diverses dispositions en matière de 
commande publique); Order No 2016-65 of 29 January 2016 on concession contracts (Ordonnance n° 2016-65 du 29 
janvier 2016 relative aux contrats de concession); Law No 2015-990 of 6 August 2015 on growth, activity and equal 
economic opportunities (Article 209) (Loi n° 2015-990 du 6 août 2015 pour la croissance, l’activité et l’égalité des 
chances économiques); Decree No 2016-86 of 1 February 2016 on concession contracts (Décret n° 2016-86 du 1er 
février 2016 relatif aux contrats de concession); Decree of 21 March 2016 establishing the model notice for the award of 
concession contracts (Arrêté du 21 mars 2016 fixant le modèle d’avis pour la passation des contrats de concession); 
Opinion on the procedural thresholds and the list of central public authorities under public procurement law (Avis relatif 
aux seuils de procédure et à la liste des autorités publiques centrales en droit de la commande publique); Opinion on the 

74 

 
 
list of activities that are works under public procurement law (Avis relatif à la liste des activités qui sont des travaux en 
droit de la commande publique); Opinion on public procurement contracts for social services and other specific services 
(Avis relatif aux contrats de la commande publique ayant pour objet des services sociaux et autres services spécifiques). 

Directive 2014/24/EU  and Directive 2014/25/EU were transposed in full by the publication of the following: Order No 
2015-899 of 23 July 2015 on public procurement (Ordonnance n° 2015-899 du 23 juillet 2015 relative aux marchés 
publics);  Law No 2014-1545 of 20 December 2014 on the simplification of business practices and laying down various 
provisions simplifying and clarifying the law and administrative procedures (Article 42) (Loi n° 2014-1545 du 20 
décembre 2014 relative à la simplification de la vie des entreprises et portant diverses dispositions de simplification et de 
clarification du droit et des procédures administratives); Decree No 2016-360 of 25 March 2016 on public procurement 
(Décret n° 2016-360 du 25 mars 2016 relatif aux marchés publics); Decree No 2016-361 of 25 March 2016 on public 
procurement in the field of defence or security (Décret n° 2016-361 du 25 mars 2016 relatif aux marchés publics de 
défense ou de sécurité); Decree of 29 March 2016 setting out the list of information and documents which can be 
requested from candidates for public contracts (Arrêté du 29 mars 2016 fixant la liste des renseignements et des 
documents pouvant être demandés aux candidats aux marchés publics);  Opinion on the list of international provisions on 
environmental, social and labour law on the basis of which a bid can be rejected as abnormally low in public procurement 
(Avis relatif à la liste des dispositions internationales en matière de droit environnemental, social et du travail permettant 
de rejeter une offre comme anormalement basse en matière de marchés publics); Opinion on the nature and content of 
technical specifications in public procurement (Avis relatif à la nature et au contenu des spécifications techniques dans 
les marchés publics); Opinion on the procedural thresholds and the list of central public authorities under public 
procurement law (Avis relatif aux seuils de procédure et à la liste des autorités publiques centrales en droit de la 
commande publique); Opinion on the list of activities that are works under public procurement law (Avis relatif à la liste 
des activités qui sont des travaux en droit de la commande publique); Opinion on public procurement contracts for social 
services and other specific services (Avis relatif aux contrats de la commande publique ayant pour objet des services 
sociaux et autres services spécifiques). 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: ; Action completed: YES; Completion date: 08/08/2016 

National Coordination Authority  

Law 4412/2016 (GG I 147) on public contracts (award and execution of public works contracts, public supply contracts 
and public service contracts) and Law 4413/2016 (GG I 148) on concessions (award and execution of concessions), 
which transpose into Greek law three EU directives on the award of public contracts (2014/24/EU, 2014/25/EU and 
2014/23/EU), have been adopted and in force since 8 August 2016. 

Hungary: Action taken: YES; Action completed: YES; Completion date: 01/11/2015 

75 

 
 
One of the most important measures and significant outcomes in the public procurement field in 2015 was the adoption 
of the new Public Procurement Act CXLIII of 2015 and its entry into force on 1 November 2015. Hungary was the first 
EU Member State to transpose all three new Public Procurement Directives, by adopting the new Public Procurement Act 
and its implementing decrees, following extensive public consultation. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

Ireland has undertaken the necessary requirements, therefore no action required. 

Italy: Action taken: ; Action completed: ; Completion date: 

Latvia: Action taken: YES; Action completed: YES; Completion date: 01.05.2017. 

Amendments have been made to the following laws with the aim of transposing the most important provisions of 
European Parliament and Council directives into the Latvian legal framework: the Law on procurement for public service 
providers (adopted 12.05.2016, entered into force: 20.05.2016,) and the Law on public procurement (adopted: 
12.05.2016, entered into force: 20.05.2016). 

In order to fully transpose the three directives in the field of public procurement adopted by the Council and the 
Parliament in 2014, Latvia adopted a new Law on public procurement (adopted 15.12.2016, entered into 
force:01.03.2017) and a new Law on procurement for public service providers (adopted 02.02.2017, entered into force: 
01.04.2017.), and amended the Law on public and private partnerships (adopted 20.04.2017, entered into force: 
01.05.2017) 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Romania: Action taken: ; Action completed: ; Completion date: 

MDRAPFE: No reply needed - Romania transposed the European directives on public procurement in May 2016 
through: 

1) 

2) 

Law 98/2016 on public procurement, transposing Directive 2014/24/EU; 

Law 99/2016 on sector-specific procurement, transposing Directive 2014/25/EU; 

76 

 
 
Paragraph 
6.24 

6.4 

presents 

Box 
the 
disbursement  rates  as  at  31 
December  2015  for  financial 
instruments  in  Cohesion.  The 
rates  in  four  Member  States 
(Spain,  Italy,  the  Netherlands, 
and Slovakia) were significantly 
below the EU average of 75 %. 

3) 

Law 100/2016 on works and services concessions, transposing Directive 2014/23/EU; 

Law No 101/2016 on remedies and means of redress in relation to the award of public procurement contracts, 

4) 
sector-specific procurement contracts and concession contracts for works and services, and on the organisation and 
functioning of the National Complaint Resolution Council, transposing Directive 89/665/EEC and Directive 92/13/EEC. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text conveys the state of play. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary.  UK reported among MSs which transposed directives in good time. 

Italy: Action taken: ; Action completed: ; Completion date: 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Slovakia: Action taken: YES; Action completed: YES; Completion date: Years 2016, 2017 

Ministry of Finance, Ministry of Education, Science, Research and Sport: 

As implementation of the financial engineering instruments (FEI) could not begin on time in Slovakia and payments 
under the instruments in the subsequent period were markedly below the EU average (running at 75 %), the following 
measures have been taken to speed up spending under the FEI: 

- 

- 

- 

- 

- 

- 

- 

- 

optimisation of parameters and conditions for the FLPG/PRSL financial instruments, 

change of manager for the holding fund, 

pro-active communication by the new manager of the holding fund with financial intermediaries, 

increased promotion of products by the financial intermediaries, 

regular monthly monitoring of spending, 

extension of the period of eligibility for implementation of the FEI at supranational and national level, 

reallocation of funds between financial instruments according to forecast absorption by financial intermediaries, 

allocation of funding to a programme aimed at enhancing absorption of the remaining funding, relating to the 

77 

 
 
integration of the OP Competitiveness and Economic Growth with the JESSICA initiative, 

pro-active management by the Managing Authority for the Regional Operational Programme (ROP)/Operational 
- 
Programme Bratislava Region (OP BK) and the State Fund for Housing Development (SFRB) as lender since the signing 
of a financing agreement on 22 April 2013, 

- 
setting-up of an effective and simple implementation system for JESSICA, the ROP and the OP BK on the basis 
of the State Fund for Housing Development’s experience (allocation for operational programmes transferred directly to a 
separate block of finance at the State Fund for Housing Development as lender). 

These measures speeded up FEI spending from the OP Competitiveness and Economic Growth in 2015 and 2016. Under 
the OP Competitiveness and Economic Growth, 13.23 % of the programme’s allocation was spent in the form of 
reimbursable aid, which also accounts for 91 % of the allocation initially earmarked for FEI. As the FEI were 
implemented on a pilot basis in Slovakia during the 2007-2013 programming period, their use so far is considered a 
success, and experience from implementing the FEI will be used when designing the system for implementing the 
financial instruments in the 2014-2020 programming period. 

These measures speeded up FEI spending from the OP Research and Development, OP BK and ROP in 2015 and 2016. 
By the end of the eligibility period on 31 October 2016, spending of the funds initially allocated stood at 79.29 % for the 
FEI, 91.20 % for the OP BK and 100 % for the ROP. In the view of the managing bodies for the OP Research and 
Development, OP BK and the ROP, the funding provided via the financial instruments has been vital and effective. This 
is borne out by the annexes to 15 reports on these operational programmes, which clearly assess the results achieved 
through the financial instruments, jobs created, investments made, etc. 

Payments from the financial instruments in Slovakia totalled 91 % at 31 March 2017, as stated in the report on progress 
made in financing and implementing the financial instruments for the programming period 2007-2013 programming 
period published by the Commission on 20 September 2017. 

In July 2016 the ECA published Special Report No 19/2016, entitled ‘Implementing the EU budget through financial 
instruments – lessons to be learnt from the 2007-2013 programme period’. The auditors examined whether, in the EU 
Member States, financial instruments in the fields of social, transport, and energy policy represented an effective means 
of implementing the EU budget in the 2007-2013 programming period. The report identified no findings concerning OP 
Competitiveness and Economic Growth, OP Research and Development, OP BK or the ROP that would have warranted 
corrective measures. The report’s recommendations will be used in the 2014-2020 programming period. 

Spain: Action taken: YES; Action completed: ; Completion date: 

ERDF: A plan was drawn up focusing on the instruments with the lowest levels of implementation; this included an 
assessment of the main problems hindering their entry into the market and proposals to improve absorption of the funds 
by focusing on new areas and dissemination and management methods allowed under the Regulations. Particular 
attention was paid to the instruments under the Technology Fund Operational Programme, which had a lower 

78 

 
 
implementation rate. Absorption improved significantly for instruments under the Fund, one of which achieved an 
absorption rate of 85 %, while the other two achieved a rate of around 70 %, which is a significant improvement given 
the effect of the financial crisis on businesses, particularly in certain geographical areas of the Member State.   

The overall disbursement rate for the financial instruments has risen from 37 % (as shown on the map in the report) to 68 
%. 

Furthermore, and generally speaking, the requirements in place for financial instruments have been similar to those for 
aid. This has caused problems in terms of absorption of the funds, since potential beneficiaries have preferred to 
useprivate funding sources. 

ESF: In Spain’s case, as regards the ESF, the financial instruments are due to be used in two operational programmes 
under the 2014-2020 MFF. In 2015, 2016 and 2017, managers and technical staff from the managing and certifying 
authorities attended a number of events organised by the European Commission to undergo further training in relation to 
these instruments. 

Box 6.4 

Disbursement 
financial 
instruments  in  Cohesion  at  31 
December 2015 

of 

Austria: Action taken: YES; Action completed: YES; Completion date: 

The final balances for both financial instruments were settled in Austria at programme closure on 31.3.2017. The 
managing authorities made optimal use of the financial instruments wherever possible. 

Belgium: Action taken: ; Action completed: ; Completion date: 

Bulgaria: Action taken: NO; Action completed: ; Completion date: 

Ministry of Labour and Social Policy OP HRD 2007-2013 achieved a 100 % disbursement rate. 

Croatia: Action taken: YES; Action completed: YES; Completion date: 31.12.2016 

No financial instruments have been created under the Competitiveness and Cohesion operational programme. As part of 
thematic objective No 3, i.e. priority axis 3 (business competitiveness), specific objective 3a1 (improved access to 
financing for SMEs) the programme’s MA decided in June 2016 to allocate €150 million for the following financial 
instruments: ESIF Capped portfolio guarantee, ESIF Individual guarantee, with or without an interest rate subsidy, ESIF 
micro loans, ESIF small loans. In September 2017, an additional €110 million were allocated for the Loans and Growth 
ESIF financial instrument under the same priority axis. To sum up, six financial instruments were launched in 2016 and 
by the of that year a total of €37 million (25% of the allocation) were paid for five of them. 

Cyprus: Action taken: YES; Action completed: YES; Completion date: 31/12/2015 

The only financial instrument used in FP 2007-2013 was the JEREMIE Trust. The Managing Authority carried out all the 
necessary steps to speed up the procedures, and achieved disbursement to final recipients of 99.5 % at 31 December 
2015, while for the Trust itself the take-up was 100 %. 

79 

 
 
Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Denmark: Action taken: YES; Action completed: YES; Completion date: 31/12/2017 

The financial instruments under the ERDF and the ESF for the programming period 2007-2013 have been closed and 
paid. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: YES; Action completed: YES; Completion date: 31/03/2017 

The measures established for the 2007-2013 programming period have been completed and the closure documents sent to 
the Commission by 31 March 2017. 

France: Action taken: YES; Action completed: YES; Completion date: // 

Disbursements to final beneficiaries continued until the end of the eligibility period (31 December 2015). The 
information communicated by the managing authorities to the Commission on closure (30 March 2017) is the 
responsibility of the management authorities, not the national authorities. Each managing authority can take measures for 
the repayment of unspent appropriations. 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: YES; Action completed: YES; Completion date: 

Fiscal Control Committee (EDEL) 

EDEL agrees with ECA’s view: ‘No action was taken because, as stated in the text of the Annual Report of the Court of 
Auditors for 2016, “the Slovak OP and the ETC OP for Greece-Bulgaria were the only two programmes in which project 
and OP output and result objectives were interlinked”. Therefore, the ‘not’ indicated in footnote 48 above is clearly an 
error and should be deleted’. 

National Coordination Authority 

Greece set up a system for the continuous and detailed monitoring of progress made in implementing the 2007-2013 
funding instruments. On the basis of this system and the predictive models applied, resources committed for use by the 
funding instruments were able to be released and absorbed  in a timely fashion by other ROP projects. As a result, a rate 
of use close to 100 % was achieved for the funding instruments of the 2007-2013 FP. 

Hungary: Action taken: NO; Action completed: ; Completion date: 

80 

 
 
Factual finding, no action required. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

It should be noted that Ireland examined the potential for using FIs in the current ERDF programmes (including a 
feasibility study conducted by the EIB) and found that there was no scope for using FIs at present. While it has not been 
possible to use Financial Instruments (FIs) in Ireland’s Cohesion Policy Programmes to date, Ireland recognises the 
potential for use of such instruments alongside more traditional grant funding. Ireland is examining possibilities to 
introduce FIs in the current round, within EAFRD and EMFF, and will continue to look at this for the post 2020 period.    

Italy: Action taken: ; Action completed: ; Completion date: 

Latvia: Action taken: YES; Action completed: YES; Completion date: 30.03.2017 

According to the closure documents for the 2007–2013 programming period, submitted on 30.03.2017, 100 % of 
financing has been obtained for financial instrument activities. 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

By 31 December 2015, all EU and co-financing funds for financial instruments (JEREMIE and JESSICA holding funds) 
had been used for management fees, payments to final beneficiaries and payments into project accounts (in the case of 
the JESSICA holding fund, EU and co-financing funds transferred to the project accounts were paid out to final 
beneficiaries by 31 October 2016). 

Luxembourg: Action taken: ; Action completed: ; Completion date: 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Romania: Action taken: YES; Action completed: NO; Completion date: 

From quarter IV 2016, payments were made by AMPOC to the fund of funds and for the financial instruments (EC 
reimbursement not requested). 

The payments as of 31 December 2016 amounted to €52.15 million ERDF and €9.8 million BS, representing 3.91% of 

81 

 
 
the total allocation, i.e. 9.38% of the value of the contracts concluded. 

With regard to AM POI IMM, the initiative for SMEs, payments have been requested and made to the EIF for the 
amount of €93.09 million. 

Slovakia: Action taken: YES; Action completed: YES; Completion date: Years 2016, 2017 

Ministry of Finance: 

See answer to observation 4 with regard to financial instruments. 

Slovenia: Action taken: YES; Action completed: NO; Completion date: 

SVRK Reply: Slovenia has allocated all funds envisaged for financial instruments in the 2007-2013 period.   

Spain: Action taken: YES; Action completed: ; Completion date: 

ERDF: A plan was drawn up focusing on the instruments with the lowest levels of implementation; this included an 
assessment of the main problems hindering their entry into the market and proposals to improve absorption of the funds 
by focusing on new areas and dissemination and management methods allowed under the Regulations. Particular 
attention was paid to the instruments under the Technology Fund Operational Programme, which had a lower 
implementation rate. Absorption improved significantly for instruments under the Fund, one of which achieved an 
absorption rate of 85 %, while the other two achieved a rate of around 70 %, which is a significant improvement given 
the effect of the financial crisis on businesses, particularly in certain geographical areas of the Member State.   

The overall disbursement rate for the financial instruments has risen from 37 % (as shown on the map in the report) to 68 
%. 

Furthermore, and generally speaking, the requirements in place for financial instruments have been similar to those for 
aid. This has caused problems in terms of absorption of the funds, since potential beneficiaries have preferred to use 
private funding sources. 

ESF: In Spain’s case, as regards the ESF, the financial instruments are due to be used in two operational programmes 
under the 2014-2020 MFF. In 2015, 2016 and 2017, managers and technical staff from the managing and certifying 
authorities attended a number of events organised by the European Commission to undergo further training in relation to 
these instruments. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary.  UK is above EU average and the Commission points out that these rates will rise with final year 

82 

 
 
Paragraph 
6.28 – 
footnote 26 

Except  for  Croatia,  which  has 
until 31 March 2018. 

Paragraph 
6.48 – 
footnote 47 

Paragraph 
6.50  

For  the  four  remaining  cases  (2 
%),  the  authorities  did  not  have 
a  performance  system  defining 
and  measuring  outputs  and 
results  at  project  level.  In  these 
four  cases  we  could  not  assess 
project  performance.  These  four 
projects were in Ireland. 

We found projects without result 
the  14 
in  11  of 
indicators 
Member  States  from  which  we 
sampled  transactions.  However, 
they  were  most  common 
in 
Bulgaria, Spain and Italy for the 
ERDF/CF,  and  in  Ireland  and 
Spain  for  the  ESF.  In  these 

figures. 

Croatia: Action taken:; Action completed:; Completion date: 

In mid-2016, the MA of the Regional Competitiveness 2007-2013 operational programme established a working group 
for the closure of the abovementioned programme.  On 22 September 2016 the working group, composed of 
representatives from the MA, all IBs and the CA, adopted an action plan for the closure of the programme, setting out the 
activities leading up to the closure, and their deadlines. The activities set out in the action plan are being implemented as 
planned, except for the last request for interim payment addressed to the European Commission, which, according to the 
action plan, was due on 30 April 2017 (or 30 June at the latest) and which has caused the delay in finalising the Final 
Report on the implementation of the operational programme. The delay is due to the (audit) findings of the European 
Commission, the AA, the CA and the MA concerning the projects carried out under the Regional Competitiveness 2007-
2013 operational programme, according to which an irregularity has been identified on a specific population of contracts. 
As a consequence, the IB 2 has set out to analyse all the contracts in order to identify a suitable financial correction that 
would allow for the last interim payment request to be submitted to the European Commission.  

The MA has drawn up a draft final report on the implementation of the operational programme (which will be updated 
following the final interim payment request), which has been consolidated with the IBs. After the draft has been finalised 
with the CA and the AA (ongoing), it will be submitted to the Commission for unofficial consultation. It is expected that 
the supervisory board will approve the final implementation report by the end of 2017.     

Ireland: Action taken: NO; Action completed: ; Completion date: 

IE response of 31/03/2017 confirmed that the Human Capital Investment Operational Programme (HCIOP) version of 
02/03/2012 stipulated that Performance Framework indicators were to be reported at Priority, and not Project, level. 

Bulgaria: Action taken: NO; Action completed: ; Completion date: 

Ministry of Labour and Social Policy The ECA’s report does not identify OP HRD projects without result indicators. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

IE response of 31/03/2017 confirmed that the Human Capital Investment Operational Programme (HCIOP) version of 
02/03/2012 stipulated that Performance Framework indicators were to be reported at Priority, and not Project, level. 

83 

 
 
 
countries,  more  than  half  of  the 
completed projects we examined 
had  no  result  indicators,  or  the 
indicators  were  not  consistent 
with the OP. 

Paragraph 
6.50 – 
footnote 48 

The  Slovakian  OP  and  the  ETC 
OP for Greece/Bulgaria were the 
only  two  programmes  in  which 
project and OP output and result 
objectives 
mutually 
were 
consistent. 

Paragraph 
6.53 

Another  45  projects  (50  %) 
partially  achieved  their  output 
and  result  objectives.  Of  these, 
seven  were  ultimately  phased 
over 
two  programming 
periods  (2007-2013  and  2014-
2020).  These  projects  were  in 
three  OPs 
three  Member 
States  (Hungary,  Poland  and 

the 

in 

Italy: Action taken: ; Action completed: ; Completion date: 

Spain: Action taken: YES; Action completed: ; Completion date: 

ERDF: The European Court of Auditors’ observations on the indicators have been analysed and forwarded to the 
Assessment and Planning Units in order for them to evaluate the level of adaptation necessary for the new 2014-2020 
programming period in light of the observations made. Some of the recommendations have already been taken into 
account in the current framework (i.e. suitable indicators for research activities, infrastructure, etc.) and improvements 
have been made in this area. 

Meanwhile, the data on the results indicators for the 2007-2013 OPs have been analysed and completed as part of the 
closure work, and these have been included in the Final Implementation Reports. 

ESF: In the new 2014-2020 MFF, and in line with a results-based approach, all operations must contribute to the 
achievement of a specific objective, as determined by the value achieved by the indicators. Each operation selected must 
comply with the indicators set out in Annex I to Regulation (EU) 1304/2013; this means that it will be possible to 
measure the achievement of the expected values and the progress made following the completion of each operation. 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Greece: Action taken: NO; Action completed: ; Completion date: 

National Coordination Authority 

No action was taken because, as stated in the text of the Annual Report of the Court of Auditors for 2016, “the Slovak 
OP and the ETC OP for Greece Bulgaria were the only two programmes in which project and OP output and result 
objectives were interlinked”. Therefore, the ‘not’ indicated in footnote 48 above is clearly an error and should be deleted. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text conveys the state of play. 

Hungary: Action taken: YES; Action completed: ; Completion date: 

The institutional framework for aid takes the necessary measures whenever the objectives are not achieved or there is a 
risk that will happen. The following procedural options are available for the 2014-2020 period: 

Proportional reduction of aid, amendment of the grant agreement 

Section 88(1) of Government Decree No 272/2014 of 5 November 2014 on the system for using aid from certain 
European Union funds during the 2014-2020 programming period allows beneficiaries to reduce an indicator target only 
if there is a proportional reduction of aid. If an indicator is less than 75% of the target set for the project under the grant 
agreement, Section 88(2) of the Government Decree requires the aid to be reduced and the beneficiary to repay (except in 

84 

 
 
Romania). 

the case of force majeure) the proportional amount of aid according to the formula laid down in the Decree. In that case, 
the grant agreement – or in the case of financial instruments the agreement concluded with the final beneficiary – will be 
amended. 

Termination of aid relationship 

Sections 90 and 91 of the Government Decree set the conditions for terminating the aid relationship or imposing other 
sanctions. The managing authority may, for example, withdraw from the grant agreement or initiate termination of the 
agreement if the supported activity fails to be implemented, encounters persistent obstacles, or suffers lengthy delays 
compared with the schedule laid down in the grant agreement. 

The Decree specifies those projects selected in the territorial selection procedure where, in the event of withdrawal from 
the project’s grant agreement putting the objectives and indicator commitments of another project at risk, the managing 
authority may also withdraw from the at-risk project’s grant agreement. 

The managing authority may suspend taking a decision and concluding the grant agreement on the beneficiary’s further 
claims until a decision has been taken on the termination of the grant agreement. 

Project supervisor 

For projects facing administrative or managerial problems – especially those that are particularly important in economic 
or absorption terms – where there is a risk of a lengthy delay in implementation or of the project encountering persistent 
obstacles or even failure, the managing authority may designate a project supervisor at the same time as initiating an 
amendment of the grant agreement, in order to prevent withdrawal from the agreement. (Section 91(1)(a)) 

Restricting access to funds 

To ensure successful implementation of the project, the managing authority may restrict the beneficiary’s access to 
further aid funds managed by it, by suspending the entry into force of the decision on the aid claim or of the new grant 
agreement and grant document until the problems reported have been resolved. (Section 91(3)) 

Change in technical content 

The Decree allows for the indicators and the other requirements laid down in the grant agreement to be changed. Any 
change to the indicators and other targets laid down in the grant agreement or to the start of implementation of the 
project, the deadline for implementation, or to the timeframes for milestones or their content qualifies as a change in 
project content. (Section 64(2) 

Indicators and other targets may not be changed in the case of grants combined with financial instruments, however. 
(Section 64(4)) 

Where the indicator or other contractual commitment forms part of the technical content, the Decree details the procedure 

85 

 
 
to be followed in the event of a reduction in the target set under the grant agreement. (Section 65(4)(c)) 

On-the-spot checks 

On-the-spot checks cover fulfilment of the indicators undertaken under the project and the milestones set at project level. 
(Section 146(1)(k)) 

Monthly reporting 

The central monitoring unit monitors fulfilment of the performance indicators on a monthly basis by cooperating with the 
managing authorities, and compares progress at absorption and indicator level so as to be able to intervene there and then 
and to take decisions in order to achieve EU objectives. 

General and specific measures 

The legal framework to the above is provided by the ‘Monitoring Decree’. Section 3(2) of Government Decree No 
60/2014 of 6 March 2014 on the monitoring and recording of funded developments requires the Government to monitor 
fulfilment of performance indicators and absorption objectives. The Government takes or initiates general and specific 
measures aimed at achieving the necessary progress and fulfilling the objectives.  

Corrective measures 

Section 5(1)(e) of the Monitoring Decree requires the minister responsible for the use of EU funds to continuously 
monitor the progress achieved by programmes implemented using development funds granted under the Partnership 
Agreement, to check that their objectives have been fulfilled, with particular regard to their performance indicators and 
absorption objectives, and to initiate corrective measures where necessary. 

Providing the Government and managing authorities with information 

The managing authorities’ monitoring officer monitors progress in fulfilling the financial and physical indicators of the 
performance framework and keeps a close eye on the application of common indicators. The officer informs the head of 
the relevant managing authorities and the Government in the event of failure to fulfil priority-level payment and indicator 
targets. (Section 25(2)(d) and (g)) 

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Romania: Action taken: YES; Action completed: NO; Completion date: 

AM POIM  

The decision on the phasing of projects financed under the Sectoral Operational Programme for the Environment and the 
Sectoral Operational Programme for Transport was taken on the basis of Articles 39-41 of Council Regulation (EC) 

86 

 
 
1083/2006 and Commission Decision C(2015) 2771 of 30 April 2015 amending Commission Decision C(2013) 1573 of 
20 March 2013 on the approval of the guidelines on the closure of operational programmes adopted for assistance from 
the European Regional Development Fund, the European Social Fund and the Cohesion Fund (2007-2013). Commission 
Decision C(2015) 2771 of 30 April 2015 lays down the specific conditions for phasing of projects and the fact that the 
operationality of investments must be ensured at the end of the second programming period (Article 3(3)). 83 phased 
projects (32 transport and 51 environment) for the value of €3.37 billion were included in the financing of the Large 
Infrastructure Operational Programme 2014-2020 to carry out Phase II of the investment projects. 

To date, 73 phased projects (26 transport and 47 environmental) have been submitted for financing from the LIOP, of 
which 68 have been contracted (26 transport and 42 environmental) for a total eligible value of €2.6 billion. It will be 
possible to quantify the performance indicators for these investment projects once phase II has been carried out. 

Managing Authority for the Competitiveness Operational Programme  

Priority Axis 1 - Following the calls for projects launched in 2015, 158 projects were contracted in 2016 with a value of 
non-reimbursable financing of €570.50 million. Also, Phase II of the project Extreme Light Infrastructure – Nuclear 
Physics (ELI-NP) was contracted for a value of €174.58 million, of which €140.69 million were funded from the ERDF. 

Priority Axis 2 - In 2016, 2 calls for projects were launched under Action 2.3.1: one call was launched for phased non-
major projects and another for the Big Data Section. 3 projects were submitted and contracted as a result of these calls for 
projects:  

• 

2 phased non-major projects for €5.73 million, of which €4.8 million were funded from the ERDF; 

1 project for the Big Data Section for €31.37 million, of which €26.4 million were funded from the ERDF. In 

• 
2017 a new project was submitted for this Section (beneficiary: National Trade Register Office), with requested financing 
of €6.86 million.  

Under Action 2.1.1, Phase II of the project ‘Development of broadband infrastructure in areas not covered, through use 
of funds’ (RONet) was contracted with a value of €53.85 million, of which €45.77 million were from the ERDF. 

Following the call launched in 2015, 212 projects were submitted under Action 2.2.1 with a non-reimbursable financing 
request of €116 million. Specialised external expertise was contracted to analyse the innovative nature of the projects and 
assess their technical and economic aspects. To date, 140 projects have been selected for a ERDF value of €65 million, 
and are currently being contracted. The 140 projects are leading to the creation of an estimated 140 innovative products.  

In 2016, numerous meetings were held with the Ministry of Culture with a view to launching calls for projects for the e-
Culture Section under Action 2.3.3. In 2017 these meetings gave rise to the launching of the call for projects for the 
Culture Section. 

Annex 6.2 

Overview  of 

the 

results  of  Austria: Action taken: NO; Action completed: ; Completion date: 

87 

 
 
transaction testing for each MS 

As indicated, no transactions were examined. 

Belgium: Action taken: ; Action completed: ; Completion date: 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Ministry of Labour and Social Policy The ECA’s 2016 annual report makes one finding in respect of OP HRD 2007-
2013, which has no financial impact and does not contribute to the error in transaction value. 

Croatia: Action taken: NO; Action completed: ; Completion date: 

No transaction concerning economic, social and territorial cohesion in Croatia in 2016 has been examined. Therefore, no 
measures needed to be undertaken. However, as part of the Common National Rules No 3 for the Competitiveness and 
Cohesion 2014-2020 operational programme, which apply as of 9 June 2017, additional checks by the MA have been 
introduced (to complement the MA’s existing system level checks, i.e. administrative and on-the spot checks of IBs) 
before a payment request is submitted to the European Commission. The aim of system-level checks is to inspect the 
correctness and legality of expenditure to be reported to the European Commission. As an extra feature, the CA checks 
any expenditure to be reported to the European Commission, before the deadline for submitting the declaration of 
expenditure. These checks comprise cost verification, reimbursements and irregularities. In a given financial year, the CA 
also conducts inspections in one of the following areas: financial instruments, where they have not been checked at 
priority level, selection of operations and State aid. 

Cyprus: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Denmark: Action taken: NO; Action completed: NO; Completion date: 

Denmark was not covered by the above transaction testing, as no random samples were taken. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: ; Action completed: ; Completion date: 

No comments. 

France: Action taken: NO; Action completed: NO; Completion date: / 

N/A 

No operation was tested for France in 2016. 

Germany: Action taken: ; Action completed: ; Completion date: 

88 

 
 
For information purposes only; no answer required. 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: NO; Action completed: ; Completion date: 

The three quantifiable errors involving Hungary in the figure above relate to audits that have not been closed yet. As we 
are still waiting for the Court of Auditors’ closing letter and the Commission’s follow-up letter, no action has been 
ordered. 

Ireland: Action taken: YES; Action completed: YES; Completion date: 31/03/2017 

As a prudent measure, the Irish authorities removed the expenditure held to be ineligible (€606.73) from the final HCIOP 
claim. 

Italy: Action taken: ; Action completed: ; Completion date: 

Latvia: Action taken: ; Action completed: ; Completion date: 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

According to the information provided, no transactions were audited by the ECA in Lithuania in 2016. 

Luxembourg: Action taken: ; Action completed: ; Completion date: 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: ; Action completed: ; Completion date: 

Romania: Action taken: YES; Action completed: NO; Completion date: 

Improvement and clarification of the guide for applicants, the legal framework for eligibility and public procurement, 
working procedures and the legal framework on irregularities. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text/graph conveys the state of play. 

89 

 
 
Slovenia: Action taken: NO; Action completed: ; Completion date: 

SVRK Reply: In this section we can confirm what follows from the EDF report, i.e. that in 2016 (unlike in the previous 
two years) the EDF did not examine any payments or transactions submitted by Slovenia within the Cohesion Fund or 
Objective 1. 

Spain: Action taken: YES; Action completed: ; Completion date: 

In the footnote to the diagram in Annex 6.2, the ECA itself notes that its overview of transactions does not provide 
information on the relative frequency of error in the Member States included in the sample. As regards the ESF in Spain, 
following the latest financial corrections made before the end of the 2007-2013 MFF, applied by the managing and 
certifying authorities in cooperation with the audit authorities and the Commission, all operational programmes were 
closed with residual error rates of under 2 %, and with unqualified opinions from the respective auditing authorities. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. 

Spain: Action taken: YES; Action completed: NO; Completion date: 

The declared expenditure covered by the audit was already subject to a previous flat-rate correction, which affected not 
only the expenditure of the beneficiary referred to in the Court’s report, but also all the expenditure of the intermediate 
body. The correction was made as a result of shortcomings in the system of checks detected by the national authorities 
(auditing authority) and by the European Commission. We therefore consider that the expenditure audited by the Court 
had already been corrected by the national authorities when the check was carried out, as it was covered by the flat-rate 
correction referred to above. 

In any case, the European Commission is responsible for following up the recommendations in the Commission’s report. 
Therefore, despite our view that the expenditure had already been corrected at the time of the Court’s visit, it is not 
possible to confirm that the matter is closed until we receive its opinion. 

Annex 6.3 – 
example 1 

several  EU 

The  beneficiary  for  an  ERDF-
funded research project in Spain 
infringed 
and 
national  eligibility  rules:  direct 
costs  were  incorrectly  included 
in  the  calculation  of  indirect 
costs, and recoverable VAT and 
an erroneous salary amount were 
co-
wrongly 
declared 
some 
financing.  Moreover, 
not 
expenditure 
supporting 
by 
substantiated 
documents.  We  found  similar 
cases (quantified up to or above 
20  %)  in  three  other  ERDF 
projects in Spain. 

was 

for 

Annex 6.3 – 

In  Poland,  a 

local  authority  Poland: Action taken: YES; Action completed: NO; Completion date: (trwa procedura kontradyktoryjna) 

90 

 
 
 
Example 2 

Annex 6.3 – 
example 3 

Annex 6.3 – 
example 4 

receiving  CF funding for a tram 
project declared VAT as eligible 
expenditure.  However,  the  VAT 
paid on new infrastructure which 
the public will be charged to use 
is  in  fact  recoverable  and  thus 
ineligible for co-financing. 

With regard to the findings of ECA audit DAS 2016 PF-7858, the beneficiary – the Municipality of Gdańsk – applied to 
the Director of the National Revenue Information Service (KIS) for an individual interpretation of the Municipality’s 
right to reduce the VAT due by the amount of input VAT associated with the expenditure incurred on work to build and 
redevelop supporting infrastructure for the construction of tram infrastructure. In its interpretation, the KIS stated that the 
position of the applicant as set out in the application was correct. This position was sent to the Commission on 4 
September 2017. 

The audit authority examined project POIS.07.03.00-00-030/13, to which the ECA’s finding relates, but did not find any 
grounds to draw up a finding in the area described by the ECA in mission PF 7858. Poland is awaiting the Commission’s 
final position on this ECA finding. 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Ministry of Regional Development and Public Works Action has been taken on finding 16.R.SON.2203-02 and the 
ineligible expenditure has been offset by the Managing Authority for the Greece-Bulgaria ЕТС programme. 

Ministry of Regional Development and Public Works Action still needs to be taken on finding 16.R.SON.2203-03 given 
that the final report confirming the findings on ineligible expenditure was received by the Managing Authority for the 
Greece-Bulgaria ЕТС programme in October 2017. 

funding 

beneficiary 
A 
Bulgarian 
received  ERDF 
to 
purchase the equipment which it 
used  for  educational  purposes. 
When  calculating  the  amount  of 
eligible 
the 
beneficiary  did  not  take  account 
of revenue generated by services 
provided to the general public at 
these  facilities.  It  also  declared 
some  amounts  of  recoverable 
VAT. 

expenditure, 

Malta: Action taken: YES; Action completed: NO; Completion date: 

The procedure adopted by Malta was agreed upon and accepted by the European Commission. Contrary to what is stated 
in the observation above, all expenditure incurred under the project is subject to audit - even that expenditure which is not 
eligible. Ineligible expenditure is subject to audit because this forms part of the same contract which includes both the 
eligible and the illegible expenditure. At this stage, the final decision has not, as yet, been taken by the European Court of 
Auditors (ECA); in other words the Management Authority is waiting for the final position of the ECA. In the meantime, 
however, the Managing Authority insists that the procedure adopted is regular and in accordance with the rules. 

As a result of our audit for 2014, 
the Commission imposed a 25 % 
financial  correction  on  a  CF 
project 
in  Malta.  However, 
instead  of  first  certifying  all 
eligible  expenditure  and  then 
the 
applying 
Member 
authorities 
State 
certified expenditure up to 75 % 
of the project’s initial budget. As 
a  consequence,  the  non-certified 
part  of  the  project  expenditure, 
relating  to  costs  not  concerned 

the  correction, 

91 

 
 
Annex 6.3 – 
example 5 

by  the  financial  correction,  will, 
in  principle,  not  be  subject  to 
audit. 

The  beneficiary  for  an  ESF 
project 
to  deliver 
in  Ireland 
job-
training  for  unemployed 
seekers  was  unable  to  provide 
evidence in support of the hours 
charged  for  participants’  work 
placements,  as  required  by  the 
In 
national  eligibility 
connection  with 
same 
project, 
the  Member  State 
the 
paid 
authorities 
performance-related  share  of  a 
contractor’s  fee  for  a  training 
course  even  though  the  work-
placement result was below the 

rules. 
the 

out 

agreed 
found 
target.  We 
examples  of  errors  of  ineligible 
expenditure (quantified up to 20 
%) 
the  Czech  Republic, 
Spain, Hungary and Romania as 
well  as 
the  Greece-Bulgaria 
ETC OP. 

in 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: YES; Action completed: YES; Completion date: 09/08/2017 

National Coordination Body:  

In the Methodological guidelines for the eligibility of expenditure and the reporting of such expenditure in the 2014-2020 
programming period, conditions were laid down under which expenditure on personnel costs was eligible and the types 
of documents acceptable for evidencing eligibility. According to the Methodological guidelines, regarding the 
performance of administrative checks by the managing authorities for the 2014-2020 programming period, rules have 
been laid down for the implementation of administrative and on-the-spot checks. 

Ministry of Labour and Social Affairs 

Apart from cases directly referred to in the general regulation and the ESF Regulation, the rules on eligibility of 
expenditure are laid down at national level. The OPE uses indirect costs or unit costs in almost all calls in order to reduce 
the administrative burden involved with the declaration of expenditure. Experience with the OP HRE was brought to bear 
when adjusting indirect costs for the OPE (transfer of all administrative positions to NN and increasing the use of lump-
sums). The use of unit costs is encouraged; units for child groups were pilot tested in the OP HRE. However, besides 
eligibility rules, rules in other areas have an impact on eligibility of expenditure (in particular public procurement etc.) 
Failure to comply with the legal and procedural requirements normally follows from the excessive amount of law to be 
applied and the complexity thereof. Another issue is the combination of (incompatible) rules at EU and national level. 

Greece: Action taken: YES; Action completed: YES; Completion date: 31/12/2017 

Fiscal Control Committee (EDEL) 

The ECA carried out an audit of the legality and regularity of the payments in the area of Cohesion (ERDF) for the ETC 
OP 2007CB163PO059 ‘GREECE BULGARIA 2007-2013’, with reference  PF – 7829 (date of audit 15-22 July 2016). 
The audit sample included four random sampling operations in the following projects: ENERGEIA – MIS 900104, 
ACCESSNET- MIS 900064, DRAINAGE - MIS 900121 and AGROLESS – MIS 900117. The audit identified ineligible 
expenditure in projects MIS 900064 and MIS 900121 of EUR 19 450.51 and EUR 142 786.33 respectively. Regarding 
the ineligible expenditure of the MIS900064 project amounting to EUR 19 450.51: the Special Management Service of 
the OP ‘GREECE-BULGARIA 2007-2013’ informed the Certifying Authority, by means of letter ref. 
301770/ΥΔ6390/30.12.2016, that it had registered correction sheet No 9313/6 on 23 September 2016. The correction 
sheet was submitted to the European Commission together with the request for payment of 31 October 2016, which 

92 

 
 
resulted in a reduction in the eligible expenditure of the OP at issue. 

Regarding the ineligible expenditure of the MIS 900121 project amounting to EUR 142 786.33: during the procedure for 
objections and before the issuing of ECA’s final report, the Certifying Authority, by means of letter ref. 
96887/ΑΠ5121/11.09.2017 addressed to the Special Management Service, agreed with the deduction of the above 
amount from the final expenditure declared under this OP In a letter with reference 301721/ΜΑ3338/12.09.2017, the 
Special Management Service then informed the Commission (DG Regional Policy) of the above action. 

In a letter to the President of the Greek Court of Auditors, the ECA stated that the audit was deemed to be closed. 

In the ETC Programme ‘Greece-Bulgaria’, the finding identified involved expenditure for VAT that was considered non-
recoverable, amounting to 0.10 % of total expenditure for the OP. The Certifying Authority has initiated a procedure to 
recover the amount from the partner established in Bulgaria Please note, however, that Example 5 above concerns 
‘traineeship hours that were not registered and undue payments to the contractor’, in other words findings that are not 
related to the ETC Programme ‘Greece-Bulgaria’.  

For the error detected in the ETC OP Greece - Bulgaria in audit ref. PF-7826, the European Commission requested that 
the amount be deducted when calculating the final clearance. By deducting the ineligible amount from the expenditure of 
the final statement of the OP, the unduly paid amount is returned to the EU budget. The final report was received on 10 
October 2017 and the Certifying Authority has initiated the procedures to recover the amount from the partner. 

Hungary: Action taken: NO; Action completed: NO; Completion date: 

The Court of Auditors’ audit in Hungary did not find any instance of ‘Work-placement hours not documented and 
unjustified payment of the performance-related share of a contractor’s fee’ listed in example 5. We therefore consider the 
reference to Hungary in the second paragraph under example 5 as a finding that bears no relation to that example. Since 
the Member State has not yet received the Court of Auditors’ closing letter or the Commission’s financial follow-up 
letter on the above cases, there is no need for the managing authorities to take any further action at this point. 

Ireland: Action taken: YES; Action completed: YES; Completion date: 31/03/2017 

While the Irish authorities consider the expenditure (€606.73) to be valid, with the hours charged being certified by the 
training instructor in line with the eligibility rules and the performance-related share of the contractor’s fee being paid in 
line with approved national procedures, the expenditure was removed from the final HCIOP claim as a prudent measure 
despite the Irish authorities. 

Romania: Action taken: YES; Action completed: NO; Completion date: 2018 

In order to avoid the above situation, in Romania, for the 2014-2020 programming period for the ‘Human Capital’ 
Operational Programme the unit standard costs mechanism will be used in the field of vocational training. 

Spain: Action taken:; Action completed: ; Completion date: 

93 

 
 
Annex 6.3 – 
example 6 

Annex 6.3 – 
example 7  

Annex 6.3 – 
example 8 

The  beneficiary  for  an  ERDF 
project  in  Spain  did  not  comply 
with  the  requirement  in  the  call 
for  proposals 
the 
the 
cofinanced  equipment 
region  for  the  agreed  period. 
This  made 
equipment 
ineligible for co-financing. 

retain 
in 

the 

to 

The  call  for  proposals  for  an 
the  Czech 
in 
ERDF  project 
Republic  specified 
that  only 
SMEs  were  eligible.  When 
verifying  compliance  with  this 
the  managing 
requirement, 
authority  based  its  decision  on 
the beneficiary’s declaration and 
the 
its 
monitoring  system.  This  was 
insufficient  to  ensure  the  proper 
status  of 
the  beneficiary.  It 
resulted  in  funding  going  to  a 
that  was  not  an 
beneficiary 
SME. 

information 

from 

Priority Axis 3 of an ESF OP in 
Spain,  which  aims  at  increasing 
human capital, has three specific 
objectives. 
relevant 
objective for a project examined 
the 
within 
development  of human potential 
in  the  field  of  research  and 

this  OP  was 

The 

We have nothing further to add to the Commission’s observations. 

Spain: Action taken: NO; Action completed: ; Completion date: 

The European Commission is responsible for following up the recommendations in the Commission’s report. Until we 
receive its opinion, no relevant action can be taken. 

In any case, the co-financed equipment that was invested in was a portable measuring device designed to be used off the 
company’s premises wherever business was taking place. As a result, the only way to keep the equipment (in the region) 
would be to carry out the production activity (processing the data gathered using the measuring device) at the company's 
headquarters located in the relevant region. If there is found to be any non-compliance with the national rules governing 
the funding, the consequences and impact on the co-financed expenditure will need to be determined in accordance with 
those rules. 

Czech Republic: Action taken: YES; Action completed: YES; Completion date: 9/07/2014 

In the context of applications for aid in the 2014-2020 programming period, the applicants themselves must provide 
information on the size of the enterprise, turnover and number of employees for State aid to be assessed. Public registers 
such as the business register are used for the checks. 

Spain: Action taken: NO; Action completed: ; Completion date: 

Both at the time the statements were made in the ECA’s draft report, and when defending the case at the tripartite 
meeting of the ECA, the Commission and the Member State, the Spanish authorities and the Commission maintained and 
demonstrated, by putting forward arguments and sufficient data, that the training of health-service professionals through 
the ‘EIR’ (Resident Interns in Specialisation) postgraduate programme was eligible for funding under Priority Axis 3 
‘Increase and improvement of human capital’, as it contributes to the achievement of its objectives. 

94 

 
 
to 

innovation.  The  Member  State 
authorities retroactively declared 
for co-financing the salaries paid 
to  medical  professionals  during 
specialised 
residential 
internships in 2014. While these 
internships  had  some  ties  to 
research  activities,  their  main 
objective  was 
prepare 
specialised  medical  staff  for  the 
is 
Spanish  health  system.  It 
therefore  disproportionate 
to 
consider  the  whole  project  as 
primarily  a  research  activity. 
Moreover,  this  training  scheme 
for 
is 
medical 
under 
specialists 
Spanish  law.  Part  of  the  project 
was  consequently  ineligible  and 
should  not  have  been  declared 
for  co-financing.  We  found  a 
similar  case 
in  another  ESF 
project in Spain. 

compulsory 

anyway 

Annex 6.3 – 
example 9 

The  beneficiary  for  an  ERDF 
project  in  the  United  Kingdom 
to  erect  a  footbridge  used  a 
framework contract to award the 
works. The procedure chosen by 
the beneficiary for the secondary 
competition  did  not  allow  for 
identification 
the  most 
of 
advantageous 
economically 
offer. 
the 
beneficiary  incorrectly  applied 
discount rates during negotiation 

addition, 

In 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

We  do  not  have  enough  information  about  the  project.  Can  the  ECA  be  more  specific  about  where  the  ERDF  project 
was?  If it can confirm that it was an England project and the location, we will investigate and provide details of what 
further action was taken by the relevant ERDF Delivery Team. 

95 

 
 
 
 
with the contractor and awarded 
additional  works  directly  to  the 
same  contractor.  The  procedure 
therefore infringed the principles 
of  equal  treatment  and  non-
discrimination 
departed 
from  the  procedure  described  in 
the  framework  agreement.  As  a 
result, the contract was unlawful 
and  the  related  expenditure  was 
ineligible for EU funding. 

and 

The beneficiary for a CF project 
in  Hungary  (extension  of  a 
plant) 
treatment 
sewage 
substantially  modified 
the 
contract  after  signature  without 
relaunching 
procedure. 
the 
Amendments  of  this  sort  are  in 
breach  of  public  procurement 
rules. 

project 

Only  one  of  three  companies 
invited  to  tender  for  an  ESF 
language-training 
in 
Hungary had a suitable profile to 
deliver  the  training.  The  effect 
two  unsuitable 
of 
candidates 
to  participate  was 
that  the  contract  was  awarded 
due 
directly 
justification. 

inviting 

without 

Annex 6.3 – 
example 10 

Annex 6.3 – 
example 11 

Hungary: Action taken: NO; Action completed: NO; Completion date: 

The managing authority submitted its observations on the draft report to the Court of Auditors, disputing the audit body’s 
claim. A trilateral meeting between the European Commission, Court of Auditors and Hungary was held in Luxembourg 
on 9 June 2017. As agreed at the meeting, Hungary submitted an additional Member State reply to the Court of Auditors 
on 15 June 2017, to which no reply has been received from the Court of Auditors. For that reason, and in the absence of 
the Court of Auditors’ closing letter or the Commission’s follow-up letter, there is no need for the managing authority to 
take any further action at this stage. 

Hungary: Action taken: NO; Action completed: NO; Completion date: 

The managing authority submitted its observations on the draft report to the Court of Auditors, disputing the audit body’s 
claim. As the Court of Auditors’ closing letter and the Commission’s follow-up letter have not been received yet, no 
action has been ordered. 

96 

 
 
 
 
 
 
Paragraphs 

Observations in the ECA's 
2016 Annual Report 

Member States' replies 

CHAPTER 7 – Natural resources 

Paragraph 
7.7.(a) – 
footnote 12 

The  EAGF  sample  consisted  of 
transactions  from  21  Member 
States.  Belgium  (Wallonia  and 
Flanders),  Bulgaria,  the  Czech 
Republic,  Denmark,  Germany 
Hamburg-Jonas, 
(Bavaria, 
Vorpommern, 
Mecklenburg- 
North 
Rhine-Westphalia, 
Schleswig 
Saxony-Anhalt, 
Holstein), Ireland, Greece, Spain 
(the Basque Country, Andalusia, 
the  Region  of  Murcia, 
the 
Valencian  Community,  Aragon, 
Castilla-La 
Mancha, 
Extremadura  and  Castile  and 
León),  France,  Italy  (AGEA, 
Calabria,  Lombardy,  Tuscany 
and  Veneto),  Latvia,  Lithuania, 
Hungary, 
the  Netherlands, 
Poland,  Portugal,  Romania, 
Slovakia,  Finland,  Sweden  and 
the  United  Kingdom  (England, 
Northern  Ireland  and  Scotland). 
The  sample  also  included  one 
direct 
transaction 
management. 

under 

Belgium: Action taken: NO; Action completed: NO; Completion date: 

Reply from the Paying Agency for Wallonia (BE03): None.  

Reply from the Paying Agency for Wallonia (BE03): The audit did not indicate any corrective action required on the part 
of Belgium (Wallonia). However, the Paying Agency for Wallonia continually strives to improve its management 
systems and procedures. 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Not applicable; there are no specific findings. 

Denmark: Action taken: NO; Action completed: NO; Completion date: 

The Danish AgriFish Agency (DAFA) is currently drawing up a response to the audit observation. 

Finland: Action taken: YES; Action completed: YES; Completion date: 27/10/2017 

The area errors found during inspections were small and have been corrected. 

France: Action taken: YES; Action completed: YES; Completion date: / 

No special remarks 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: NO; Action completed: ; Completion date: 

Factual finding, no action required. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

No action required. 

97 

 
 
Italy: Action taken: ; Action completed: ; Completion date: 

Latvia: Action taken: YES; Action completed: YES; Completion date: 01.04.2016 

An electronic application system was introduced at the paying agency (the Rural Support Service) in April 2016 which 
prevents the applicant from indicating an area of land that exceeds that of the block. The system displays a warning if the 
areas entered by an applicant overlap geospatially. 

Lithuania: Action taken: YES; Action completed: YES; Completion date: 5/09/2016 

The internal procedure for assessing the classification of cars was amended, and the changed assessment process was 
publicised. 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: YES; Action completed: YES; Completion date: 

Measures have been taken to improve administrative checks on applications for support under Article 24(2)(d) of 
Regulation 65/2011 (now subparagraph (e)) and Article 48(2) of Regulation 809/2014), namely 

• 

• 

a requirement to present three (3) comparative price offers for the assessment of the reasonableness of the costs,  

increased number of references in the supporting tables for administrative checks. 

Romania: Action taken: YES; Action completed: NO; Completion date: 

The file was re-examined. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text/graph conveys the state of play. 

Spain: Action taken: NO; Action completed: NO; Completion date: 

Aragon payment agency: Given that the ECA has not yet reached a firm decision, repayment of the excess aid referred to 
in Annex II (1.68 %) has not been requested. The aid in question relates to the budget line for the promotion of wine in 
third countries (the beneficiary is Grupo Publicitario de Cariñena AIE). Arguments were submitted on 25 April 2017, 
pending a final decision (see enclosed document). 

Sweden: Action taken: NO; Action completed: ; Completion date:  

98 

 
 
Paragraph 
7.7.(a) – 
footnote 13 

transactions 

Extremadura), 

The  sample 
the  second 
for 
specific  assessment  consisted  of 
153 
rural 
for 
development 
and  10  other 
transactions  (in  areas  covering 
the  environment,  climate  action 
and  fisheries)  from  20  Member 
States.  Bulgaria, 
the  Czech 
Republic,  Denmark,  Germany 
(Lower Saxony-Bremen, Saxony 
and  Saxony-Anhalt),  Estonia, 
Ireland, 
Spain 
Greece, 
(Andalusia,  Castilla-La  Mancha 
France 
and 
and  Rhône-
(Midi-Pyrénées 
Alpes), 
Italy 
(Basilicata), Lithuania, Hungary, 
Portugal 
Poland, 
Austria, 
(Azores 
mainland), 
and 
Romania,  Slovakia,  Finland  and 
the  United  Kingdom  (England 
sample 
and  Scotland).  The 
included 
transactions 
under  direct  management,  of 
which two concerned EU funds 
spent  on  fisheries  partnership 
agreements outside the European 
Union. 

Croatia, 

seven 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. 

Austria: Action taken: YES; Action completed: NO; Completion date: 

The procedure is still ongoing. 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Croatia: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: ; Action completed: ; Completion date: 

Denmark: Action taken: NO; Action completed: NO; Completion date: 

The Danish AgriFish Agency (DAFA) is currently drawing up a response to the audit observation. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: YES; Action completed: YES; Completion date: 27/10/2017 

The area errors found during inspections were small and have been corrected. 

France: Action taken: YES; Action completed: YES; Completion date: / 

No special remarks 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: NO; Action completed: ; Completion date: 

Factual finding, no action required. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

No action required. 

Italy: Action taken: ; Action completed: ; Completion date: 

Lithuania: Action taken: YES; Action completed: YES; Completion date: 5/09/2016 

The internal procedure for assessing the classification of cars was amended, and the changed assessment process was 

99 

 
 
publicised. 

Poland: Action taken: ; Action completed: ; Completion date: 

The observation includes no specific criticisms of Poland. 

Portugal: Action taken: YES; Action completed: YES; Completion date: 

Measures have been taken to improve administrative checks on applications for support under Article 24(2)(d) of 
Regulation 65/2011 (now subparagraph (e)) and Article 48(2) of Regulation 809/2014), namely 

• 

• 

a requirement to present three (3) comparative price offers for the assessment of the reasonableness of the costs,  

increased number of references in the supporting tables for administrative checks. 

Romania: Action taken: YES; Action completed: NO; Completion date: 

The file was re-examined. 

Slovakia: Action taken: ; Action completed: ; Completion date: 

In our opinion, the text/graph conveys the state of play. 

Spain: Action taken: NO; Action completed: NO; Completion date: 

Aragon payment agency: Given that the ECA has not yet reached a firm decision, repayment of the excess aid referred to 
in Annex II (1.68 %) has not been requested. The aid in question relates to the budget line for the promotion of wine in 
third countries (the beneficiary is Grupo Publicitario de Cariñena AIE). Arguments were submitted on 25 April 2017, 
pending a final decision (see enclosed document). 

Image 2 – 
footnote 23 

Several  Member  States  have 
opted 
to  admit,  as  eligible 
pastureland, land on which non-
herbaceous  vegetation  suitable 
for grazing is predominant (e. g. 
grazable  heathland).  Germany, 
Greece,  Spain,  France,  Croatia, 
Italy,  Portugal,  Sweden  and  the 
United Kingdom. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. 

Croatia: Action taken: ; Action completed: ; Completion date: 

France: Action taken: YES; Action completed: YES; Completion date: / 

No special remarks N/A 

Germany: Action taken: ; Action completed: ; Completion date: 

All the required information and the opinion are already available to the Commission and the ECA. 

Greece: Action taken: NO; Action completed: ; Completion date: 

OPEKEPE (Greek Paying Agency) 

100 

 
 
The finding has been withdrawn by the ECA since, in the light of the evidence provided by the Greek authorities, it 
appears that ortho-images from 2015 were used for the eligibility of the beneficiary’s pasture (ECA letter ref. 
CH1090047EL01-17PP/09.02.2017). 

Italy: Action taken: YES; Action completed: YES; Completion date: 

Decree No 1420 of the Ministry of Agricultural, Food and Forestry Policy of 26 February 2015. 

Portugal: Action taken: NO; Action completed: ; Completion date: 

This observation concerns a field visit carried out pursuant to case CP 8094-EAGF. A parcel was selected and the ECA 
auditors merely asked for measurement of some subparcels of the reference parcel. Note that the inspection did not find 
any failure to comply with greening obligations. 

Spain: Action taken: YES; Action completed: YES; Completion date: 

Under the ‘permanent pasture’ heading of the agricultural parcel identification system (SIGPAC), an attribute has been 
added relating to permanent pasture areas that are part of established local practices. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

Box 7.5 

the  Czech  Republic  and 
In 
the  LPIS  database 
Poland 
contained  no 
information  on 
historical  land  uses.  In  such 
situations,  authorities  cannot 
perform automated crosschecks 
to  verify  whether  arable  land 
used 
to  grow  grasses  has 
become  permanent  grassland. 
the 
This  creates  a  risk 
authorities  may  not  detect 
declared EFAs which are in fact 
on  permanent  grassland  (i.e.  not 
arable  land).  We  also  found 
weaknesses  in  the  classification 
of  permanent  grassland  or  the 

that 

No action necessary, Letter of Findings on Audit DAS2016 – PF8412 does not confirm any error on this observation. 

Czech Republic: Action taken: NO; Action completed: ; Completion date: 

The LPIS contains information on the history of parts of land parcels.  

Before 2015, in cases where grassland was registered on parts of parcels, it was registered as G culture (grassland), which 
under the Farming Act could not be ploughed. Any infringement constituted a GAEC infringement. 

Temporary grassland (less than five years) could not registered as arable land. 

As of 1 January 2015 parts of land parcels were automatically re-classified as T culture: 

parts on which grassland was registered for more than 5 years became permanent grassland in accordance with 
Regulation (EU) No 1307/2013.  

In respect of parts registered as T for less than 5 years, the culture was changed to G (grassland), which falls under the 
category of arable land. 

The LPIS carries out an assessment of the duration of the G period of the parts of land parcels in its IT system. The T 
duration before 2015 also counts as part of the period. The technical solution includes highlighting in the details of the 

101 

 
 
related cross-checks in Germany 
(Bavaria, 
Mecklenburg-
Vorpommern,  North  Rhine-
Westphalia, 
Saxony-Anhalt, 
Schleswig  Holstein),  France, 
Italy  (Lombardy),  Portugal  and 
the United Kingdom (England). 

land parts that the conversion period to T is approaching, as well as work lists and dispatching for supervision. In the 
fifth year at the latest the land is changed to T as part of the amendment process in accordance with the Agriculture Act. 

The issue was again addressed in the context of Commission audit mission AA/2017/010/CZ. 

France: Action taken: YES; Action completed: YES; Completion date: 2/09/2016 

Against the background of the 2015 reform and the finalisation of the action plan, the French authorities completely 
overhauled their LPIS.  The exercise involved the photo-interpretation (with rapid visits) of the whole of the national 
territory with a view to identifying and excluding all non-agricultural areas.  

The pro rata concept was introduced for the purpose of assessing the eligibility rate of parcels with low productivity and 
gave rise to rapid field visits in cases of doubt regarding the pro rata. 

This was the case in particular for wooded parcels or where there was a discrepancy between the conclusions of the 
photo-interpretation and the farmer’s declaration. 

Germany: Action taken: ; Action completed: ; Completion date: 

One conformity procedure is still ongoing. 

Italy: Action taken: YES; Action completed: ; Completion date: 

Provision of a monitoring system for the following purposes: 

to check the state of the permanent grassland after the beneficiary was authorised to convert the grassland into 

- 
arable land on the basis of declarations submitted in the single application; 

to establish whether the arable land was turned into permanent grassland if the land was used, for five or more 

- 
years, to grow herbaceous forage, even if such land was tilled and cultivated with a variety of different herbaceous forage 

Poland: Action taken: NO; Action completed: NO; Completion date: 

It should first be stated that crop groups were defined in Article 49 of Commission Regulation (EC) No 769/2004 
(replaced by Regulation (EC) No 73/2009) in such a way that the following, inter alia, are deemed to be individual crop 
groups: 

areas for which a different rate of aid is applicable; 

set-aside areas declared under aid schemes established in Title IV of Regulation (EC) No 1782/2003 and, where 

applicable, set-aside areas for which a different rate of aid is applicable; 

areas for the purposes of the Single Area Payment Scheme in accordance with Article 143b of Regulation (EC) 

No 1782/2003. 

102 

 
 
 
 
 
Accordingly, until 2014, agricultural parcels in Poland were declared as crop groups without the specific crops being 
indicated. Therefore, in their payment claims farmers were not obliged to indicate the cultivation of grass and other 
herbaceous forage as a separate agricultural parcel. These crops were declared as a crop group for which the single area 
payment and the complementary area payment were due.  

Since 2015, in accordance with the applicable legal framework, namely Article 67(4)(a) of Regulation (EU) No 
1306/2013 of the European Parliament and of the Council read in conjunction with Article 17 of Commission 
Implementing Regulation (EU) No 809/2014, it has been required to make a separate declaration of the use of a given 
area within a crop group. In accordance with Article 4(1)(h) and (i) of Regulation (EU) No 1307/2013, permanent 
grassland means land that has not been included in crop rotation for five years or more. In order to verify the greening 
conditions, all farmers in Poland applying for direct payments are obliged to indicate in their payment claims the location 
and area of arable land. In addition, farmers with grass or other herbaceous plants are obliged to declare this crop as a 
separate agricultural parcel and delineate it on the orthophoto map. 

In accordance with Article 72(3) of Regulation (EU) No 1306/2013, the paying agency sends farmers who submitted a 
claim for direct payments in the preceding year an individualised application form. Annexed to the individualised 
application form is not only the graphic material but also two information sheets entitled ‘Information on parcels declared 
for payment’ and ‘Information on the existence of ecological focus areas (EFAs) on parcels declared for payment’. 

The information on parcels declared for payment includes in particular: the maximum eligible area, ecological focus 
areas recorded in the LPIS, the area of permanent grassland, and the area of designated permanent grassland of high 
natural value. 

For the purposes of designating the area of permanent grassland, parcels declared as grass on arable land in 2015 
underwent an orthophoto map analysis taking account of earlier land uses, farmers’ declarations and all the findings of 
on-the-spot checks. In other words, account was taken of all possible evidence.  

Accordingly, with regard to the ECA’s criticism that ‘In the Czech Republic and Poland the LPIS database contained no 
information on historical land uses. In such situations, authorities cannot perform automated cross-checks to verify 
whether arable land used to grow grasses has become permanent grassland’, it should be noted that until 2014 there was 
no obligation for the LPIS to include a permanent grassland layer. This obligation was introduced only with effect from 
2015 and the Agency for Restructuring and Modernisation of Agriculture (ARiMR) fulfilled it by building that layer 
using all possible evidence. The correctness of this approach was confirmed by the European Commission during the 
June 2017 mission concerning monitoring and support for implementation of the direct payment scheme and exchange of 
views on the Integrated Management and Control System after 2020.  

Please note that since 2015 the paying agency in Poland has been automatically carrying out cross-checks in order to 
verify whether arable land used to grow grass has become permanent grassland. Where it is found that grass or other 
herbaceous plants have been grown on a given area of land for five years or more, that land will be classified as 
permanent grassland, with the farmer being informed of this in the ‘Information on parcels declared for payment’ 

103 

 
 
information sheet sent with the individualised application form.  

Accordingly, automatic checks to verify whether agricultural land cultivated with grass had become permanent grassland 
were carried out for all parcels declared as single payment scheme permanent grassland or grass on arable land declared 
under agri-environment programmes.  

‘This creates a risk that the authorities may not detect declared EFAs which are in fact on permanent grassland (i.e. not 
on arable land).’ 

In order to verify whether the greening conditions were met, Poland used all possible information held by it to determine 
the three categories of land (arable land, permanent grassland and permanent crops) and also to ascertain whether a 
declared ecological focus area was on or adjacent to arable land, as outlined above.  

The automatic cross-checks also verify whether an ecological focus area declared and delineated by a farmer is adjacent 
to or on arable land. 

In other words, the Agency carried out all possible checks and provided farmers with all information in this connection 
on the basis of the legal provisions in force. 

Portugal: Action taken: NO; Action completed: ; Completion date: 

Audit CP 8094 noted the failure to reclassify some parcels as permanent pasture in accordance with Commission 
Delegated Regulation (EU) No 639/2014. According to the auditors, this might contribute to a financial risk arising from 
greening requirements. This issue is not related to any of the beneficiaries that were audited. 

Accordingly, the Portuguese authorities reiterate the information already communicated in letter ref. 003960/2017 GPE-
ARCC, which we think we should reproduce here: 

The Portuguese authorities entirely disagree with the position taken by the ECA concerning the retroactive effect of the 
five-year rule for the conversion of land into grassland/permanent pasture (PP), given that 2015 should be the year ‘zero’ 
for the beginning of the five-year period. 

This approach is based on the change in crops considered for classification of forage areas and therefore of areas 
considered to be PP. 

As stated in point 3.1 of DG AGRI’s guidance document (ref. Ares(2015)2999036 of 16 July) on the implementation by 
Member States of permanent grassland provisions in the context of the payment for agricultural practices beneficial for 
the climate and the environment (Greening), areas under pure cereal crops, or a mixture thereof, or pure leguminous 
crops, or a mixture thereof can no longer be classified as forage areas, contrary to the guidelines in the previous 
Community framework (prior to 2014). 

Clearly our authorities have no way of knowing whether in previous years the areas declared as forage areas were in fact 

104 

 
 
forage areas in line with the new approach or, for example, under pure cereal crops. 

To sum up, despite the concept of PP (and forage area) not really having changed in the new, post-2014 guidelines, there 
is a marked difference when it comes to the crops that may be considered as forage areas and therefore the basis for the 
classification of PP. 

On the question of the financial risk linked to compliance with Greening requirements, in particular that resulting from 
the (non-)conversion into PP after five years of ‘arable land lying fallow’, note that there is provision for non-application 
of the reclassification where such land is classified as an Ecological Focus Area (EFA), as set out in point 3.5 of the 
guidance document referred to above. 

Other arable lands which may be classified as EFAs, including those with nitrogen-fixing crops, may not be considered 
as forage areas as well (because they have ‘pure’ leguminous crops or a mixture thereof), in accordance with point 3.1 of 
the abovementioned guidance document. They cannot therefore be considered as forage areas and would never be 
reconverted into PP after five years. 

United Kingdom: Action taken: YES; Action completed: ; Completion date: N/A 

This observation is being addressed within ongoing system developments. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary, Letter of Findings on Audit DAS2016 – PF8080 confirms no error found on this observation. 

105 

Box 7.7 

the  United  Kingdom 
In 
(England)  we  audited  a  project 
to  build  a  new  roof  for  a 
livestock-gathering  area.  The 
payment  was  based  on  a 
standard unit cost for roofs of 62 
GBP  per  square  metre,  with  a 
maximum  available  grant  per 
farm of 10 000 GBP. 

The  standard  unit  cost  for  the 
roof  came  from  a  publication 
which is one of the most widely 
independent  sources  of 
used 
agricultural business information 
in  the  United  Kingdom.  The 
prices  in  the  publication  are 
updated every year. 

 
 
Annex 7.2 

the 

Overview  of 
results  of 
transaction  testing  for  each  MS 
for 
the 
rural  development, 
environment,  climate  action  and 
fisheries 

Austria: Action taken: YES; Action completed: NO; Completion date: 

The procedure is still ongoing. 

Belgium: Action taken: NO; Action completed: NO; Completion date: 

Reply from the Paying Agency for Wallonia (BE03): N/A 

Reply from the Paying Agency for Wallonia (BE03): No operations were checked in 2016. 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Ministry of Agriculture and Food + SFA In the overview of the results of transaction testing for Bulgaria for rural 
development (EAFRD) and fisheries (EMFF) there are no transactions affected by errors. 

Croatia: Action taken: ; Action completed: ; Completion date: 

Cyprus: Action taken: ; Action completed: ; Completion date: 

Czech Republic: Action taken: YES; Action completed: NO; Completion date: 

On the basis of the findings of the ECA audit enquiries, physical, on-the-spot checks were carried out of the applicants 
concerned. Following those checks an adjustment was made for the period and applicants would be served with 
proceedings for the return of funding paid in respect of ineligible land. 

Denmark: Action taken: NO; Action completed: NO; Completion date: 

The Danish AgriFish Agency (DAFA) is currently drawing up a response to the audit observation. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: YES; Action completed: YES; Completion date: 

France: Action taken: YES; Action completed: YES; Completion date: / 

No special remarks N/A 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Greece: Action taken: ; Action completed: ; Completion date: 

Hungary: Action taken: NO; Action completed: ; Completion date: 

Factual finding, no action required. 

106 

 
 
Ireland: Action taken: NO; Action completed: ; Completion date: 

No action required. 

Italy: Action taken: YES; Action completed: YES; Completion date: 

The MA has procedures and instruments for preventing, detecting and correcting any operational errors and irregularities 
(implementation model, checklist and audit trails, guidelines on the eligibility of expenditure, guidelines on irregularities 
and fraud, SiGeCo (management control system), manual of monitoring procedures for the intermediate bodies). 

Latvia: Action taken: ; Action completed: ; Completion date: 

Lithuania: Action taken: YES; Action completed: YES; Completion date: 5/09/2016 

The internal procedure for assessing the classification of cars was amended, and the changed assessment process was 
publicised. 

Luxembourg: Action taken: ; Action completed: ; Completion date: 

Malta: Action taken: ; Action completed: ; Completion date: 

N/A 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Poland: Action taken: ; Action completed: ; Completion date: 

The observation does not include specific criticisms of Poland. 

Portugal: Action taken: YES; Action completed: YES; Completion date: 

The Portuguese authorities consider that there is no DAS 2016 error in the findings 16.P.AG1.1062, 16.P.AG1.1063, 
16.P.AG2. 1506-01 and 16.P.AG2.1506-02. 

With regard to the finding 16.P.AG1.1065 concerning beneficiary NIFAP 763924, recovery proceedings ref. 4626/2017 
were initiated for the amount of €109.59, which has already been recovered and declared to the Commission in May 
2017. 

Romania: Action taken: YES; Action completed: YES; Completion date: periodic updating 

At the recommendation of DG AGRI, AFIR (the Rural Investment Financing Agency) drew up an action plan to reduce 
the error rate. The Plan contains the main shortcomings identified by the external auditors in the audit inspections as 
regards compliance with EU provisions. In this regard, the Agency provides information on the state of play concerning 
implementation of the recommendations, the deadlines for implementation and the indicators taken into account to follow 

107 

 
 
up this stage. The Plan is periodically discussed and updated with representatives of DG AGRI at bilateral meetings. The 
last transmission to the EC of the Action Plan to reduce the error rate was in September 2017. 

Slovakia: Action taken: YES; Action completed: NO; Completion date: 31 December 2017 

Ministry of Agriculture and Rural Development: 

See answer to observation 3 of this chapter for further details. 

Slovenia: Action taken: ; Action completed: ; Completion date: 

Spain: Action taken: ; Action completed: ; Completion date: 

We have nothing further to add to the Commission’s observations. 

Sweden: Action taken: NO; Action completed: ; Completion date: 

Sweden has not taken any action based on the observation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

No action necessary. 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

We partially disagree with the remark, because the undertaking with which the European Court of Auditors (ECA) could 
link the beneficiary had not been established at the time of assessment of the application (2012) (according to the national 
centre of registers, the undertaking was established on 30 December 2013). An assessment of the size of the undertaking 
will be carried out in 2018 in accordance with national law. However, in the light of the ECA’s finding, consideration is 
being given to tightening control and surveillance procedures to prevent the unauthorised use of aid. 

108 

Annex 7.3 – 
example 1 

In  Lithuania  we  examined  a 
payment  made  to  a  cooperative 
for  investment  support  in  the 
processing  and  marketing  of 
agricultural  produce.  Under  EU 
and  national  rules,  such  support 
is available only to micro, small 
and  medium-sized  enterprises, 
as  determined  by  the  number  of 
employees,  annual  turnover  and 
annual  balance 
total. 
Related  enterprises,  such  as 
mother  or  daughter  companies, 
have 
the 
calculation.  We  found  that  the 
cooperative  concerned  belonged 
large  multinational 
to 
company, and so did not qualify 
as  a  micro,  small  or  medium-

included 

to  be 

sheet 

in 

a 

 
 
Annex 7.3 – 
example 2 

Annex 7.3 – 
examples 4 
and 5 

sized enterprise. The beneficiary 
was  not  eligible  for  support, 
leading to a 100 % error. 

We  examined  a  payment  made 
to  an  agricultural  company  in 
Hungary  for  the  purchase  of 
machinery. We found conclusive 
evidence that the beneficiary had 
links  with  the  company  that 
supplied  the  machinery.  Under 
national  law  this  renders  the 
whole 
ineligible, 
leading to a 100 % error. 

payment 

the 

for  by 

We examined two sets of works 
regional 
paid 
government  of  Andalusia 
in 
Spain: one for the reconstruction 
of a rural road and the other for 
a  rural  house  with  an  adjacent 
farm building. In both cases, we 
found  that  the  works  had  been 
directly  awarded  to  a  company 
at  inflated  prices.  We  reported 
errors  of  33  %  and  41  %  of  the 
costs examined respectively. 

Hungary: Action taken: YES; Action completed: NO; Completion date: 

Since the eligibility and payment application were approved following an order under an earlier second-instance 
decision, the powers of the first-instance authority had to be clarified on the basis of legal consultation. As a result, the 
aid amount paid is being recovered, which also invalidates eligibility. 

Due to the lengthy legal consultation the action has not been completed yet. The final decisions agreed upon are 
available, however, and will be sent out in early November. The action will be completed after that (in November). 

Spain: Action taken: YES; Action completed: ; Completion date: 

Andalusia opposed the errors. However, Action Plans have been drawn up containing corrective and preventive actions 
relating to public procurement (on Monday an addendum will be sent from the Andalusian paying agency on this point). 

The Andalusian paying agency does not agree with the ECA’s observations and we would refer you to their response 
(below). 

In its assessment, the ECA did not take into account all the real costs, both direct and indirect, associated with the 
carrying out of the selected work as part of the overall project, costs which had to be borne by the special body. These 
costs show that the deviation for the rural road was 0.5 % and that the expenditure borne by the special body for the rural 
house was slightly more than the amount declared to the EAFRD. 

As a result, there was no over-declaration to the EAFRD for either of these projects. 

Notwithstanding the above, and to remove any doubt, in September 2016 the Andalusian paying agency approved an 
instruction on in-house awards or contracts with special bodies to ensure that work awarded to third parties is charged at 
the real cost and that the direct/indirect costs associated with the work are clearly identified. 

Annex 7.3 – 
example 6 

We  examined  a  payment  made 
to  an  agricultural  company  in 
the  purchase  of 
Estonia  for 
machinery. 
project 
application  was  filed  together 

The 

Austria: Action taken: YES; Action completed: NO; Completion date: 

The procedure is still ongoing. 

Denmark: Action taken: NO; Action completed: NO; Completion date: 

109 

 
 
another 

influence  over 

with 
company. 
According  to  the  national  rules, 
joint  applications  qualify  for 
higher aid amounts, but are only 
permitted  if  neither  applicant 
has,  directly  or 
indirectly,  a 
the 
dominant 
other.  However,  we  found  that 
this  condition  was  not  met, 
leading  to  a  32  %  error.  We 
found  errors  due  to  ineligible 
beneficiaries/expenditure 
(quantified  up 
in 
Denmark,  Germany,  Greece, 
Italy 
Portugal 
(Basilicata), Austria and Poland. 

(mainland), 

to  20  %) 

The Danish AgriFish Agency (DAFA) is currently drawing up a response to the audit observation. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Germany: Action taken: YES; Action completed: YES; Completion date: 

Paying agencies in Germany are implementing appropriate action plans where applicable. 

Greece: Action taken: ; Action completed: ; Completion date: 

OPEKEPE (Greek Paying Agency) 

The error is isolated and does not reflect a systemic weakness. (ECA letter ref. CH1086667EL01-16PP/08.12.2016). The 
correct ineligible amount is EUR 7 038.81 (108 040 x 6.52 %) 

Italy: Action taken: NO; Action completed: NO; Completion date: 

The Italian authorities consider that the conditions have not been met for the Court of Auditors to declare the expenditure 
in question ineligible, as the effective date was established by specific implementing provisions at regional level, issued 
in line with either Article 71(1) of Regulation (EC) 1698/2005 or with the ‘Guidelines on the eligibility of rural 
development expenditure’ adopted by the Ministry of Agricultural, Food and Forestry Policy.  

With respect to any further questioning of the eligibility of the expenditure, please note that the same expenditure was 
considered eligible on the grounds that it was strictly linked to the proposed investment which, although it followed an 
existing format, had content and options relating to a new investment which, although linked to the previous one, 
concerned different types of expenditure. 

Poland: Action taken: YES; Action completed: NO; Completion date: 

The procedures drawn up and adopted for application included detailed control mechanisms ensuring the correct 
assessment of projects. The errors found in the cases described should be considered incidental (one-off) errors resulting 
from incorrect classification of ineligible costs by beneficiaries. In both cases action has been taken to recover the 
monies. One of the beneficiaries has returned the monies, whilst for the second beneficiary the case is still ongoing. 

Portugal: Action taken: YES; Action completed: YES; Completion date: 

Measures have been taken to improve administrative checks on applications for support under Article 24(2)(d) of 
Regulation 65/2011 (now subparagraph (e)) and Article 48(2) of Regulation 809/2014), namely 

the requirement to present three (3) comparative price offers for the assessment of the reasonableness of the 

• 
costs, 

• 

increased number of reference values in the supporting tables for administrative checks. 

110 

 
 
Annex 7.3 – 
example 7 

Annex 7.3 – 
example 8 

orchards. 
prerequisite 

In  Portugal  we  examined  a 
payment made to a farmer under 
the  rural  development  measure 
‘agri-environment-climate’ 
for 
the  conservation  of  the  Azores’ 
One 
traditional 
national 
for 
receiving  the  payment  was  an 
orchard with at least one variety 
the 
which 
Azores and which, if grown with 
other  trees,  should  constitute  at 
least  80  %  of 
tree 
population.  We  visited  the  two 
parcels  claimed,  and  found  that 
they  did  not  contain  enough 
eligible  trees.  The  parcels  did 
not  comply  with  the  eligibility 
rule, leading to a 100 % error. 

traditional 

the 

in 

is 

In  Croatia  we  visited  a  farm 
which  had  received  a  ‘mountain 
areas’  compensation  payment. 
We  inspected  a  sample  of  three 
parcels,  which  the  beneficiary 
had  claimed  as  pastureland.  On 
one  of  the  parcels  we  found  no 
sign  of  any  agricultural  activity, 
e.g.  grazing.  The  parcel  was 
for 
therefore 
compensation. 
There  were 
ineligible areas on the two other 
parcels,  due  to  the  presence  of 
thick  forestation.  We  note  that 
the paying agency had identified 
has 
similar 

ineligible 

problems 

and 

Portugal: Action taken: YES; Action completed: YES; Completion date: 

Under measure M10 of PRORURAL + and Operation 2015000080024 the beneficiary NIFAP 7342301 was selected for 
an on-the-spot check. On the basis of the findings, it received a full penalty (100 %) for an area deviation; recovery 
proceedings ref. 3426/2017 for the amount of EUR 1 666.00 were then initiated. 

Croatia: Action taken: YES; Action completed: YES; Completion date: 8.5.2017 

The Paying Agency conducted quick on-the-spot checks of an agricultural holding (on 7 June 2016 and 3 November 
2016) and updated the areas in the LPIS (ARKOD) accordingly. As a result, a recalculation was done in respect of the 
beneficiary concerned, who was issued the following recovery decisions:  

Decision on the recovery of payment for mountainous areas in 2015 of HRK 359 886.61 issued on 8 February 

- 
2017, received by the beneficiary on 21 February 2017. 

On the basis of the quick on-the-spot checks the beneficiary was subsequently also issued decisions concerning 

- 
measures that had not been subject to an audit: 

Decision on the recovery of basic payment in 2015 of HRK 165 365.06 issued on 29 March 2017, received by 

- 
the beneficiary on 4 April 2017; 

Decision on the recovery of green payment in 2015 of HRK 189 990.37 issued on 27 April 2017, received by the 

- 
beneficiary on 8 May 2015. 

- 

According to the Agency, the court should have considered the fact that at the time of the audit visit the holding 

111 

 
 
subsequently  initiated  recovery. 
On  the  basis  of  our  sample,  we 
estimated  a  91  %  error.  We 
found errors due to overstated or 
ineligible  area  (quantified  up  to 
20  %)  in  the  Czech  Republic, 
Spain 
Germany 
(Extremadura),  France  (Rhône-
Portugal 
Croatia, 
Alpes), 
(Azores 
mainland), 
and 
Slovakia, Finland and the United 
Kingdom (England). 

(Saxony), 

was subject to a quick on-the-spot check, which meant that the abovementioned activities were going to be carried out, 
and that the holding had not been selected in the sample of the European Court of Auditors. The Agency believes that 
cases such as the one described above are subject to EU law, and that its actions complied with the latter. The Agency 
maintains that it took appropriate corrective measures in accordance with applicable procedures and EU law. The Agency 
cannot agree with the findings of the European Court of Auditors that the error in question could have been detected by 
the national authorities without an on-the-spot check.  

- 
Moreover, with a view to stepping up and improving its action in such cases, the Agency has been looking at the 
use of drones for quick on-the-spot checks (as a pilot project), which will further reduce the time needed for these checks 
and improve their accuracy. The Agency agrees with some of the findings of the European Court of Auditors, namely 
that further steps should be taken with regard to informing the beneficiary. To this end, the Agency now informs 
beneficiaries during a quick on-the-spot check of any irregularities it encounters. The Agency takes the view that it has 
taken all the measures provided for by EU law, i.e. that administrative action in the above case ceased at the moment the 
beneficiary received the last decision on the recovery of payment on 8 May 2017 (given as the completion date) or that 
administrative action would cease once all funds had been recovered from the beneficiary (which to date they have not). 

Czech Republic: Action taken: YES; Action completed: NO; Completion date: 

On the basis of the findings of the ECA audit enquiries, physical, on-the-spot checks were carried out of the applicants 
concerned. Following those checks an adjustment was made for the period and applicants would be served with 
proceedings for the return of funding paid in respect of ineligible land. 

Finland: Action taken: YES; Action completed: YES; Completion date: 27/10/2017 

The area errors found during inspections were small and have been corrected. 

France: Action taken: YES; Action completed: YES; Completion date: / 

No special remarks N/A 

Germany: Action taken: YES; Action completed:; Completion date: 

The LPIS is being constantly adjusted and improved. 

Portugal: Action taken: YES; Action completed: YES; Completion date: 

Under measure M13 of PRORURAL + and Operation 2015062880011 the beneficiary NIFAP 2017265 was selected for 
an on-the-spot check that established an area deviation of less than 20 %. 

For investments in agricultural holdings, payment applications are subject to correction in the LPIS of the areas in receipt 
of support. 

Note also, as explained in the Portuguese authorities’ reply to comments made by the ECA auditors, that we have 

112 

 
 
initiated a number of actions with a view to preventive measures: 

“On 18 August 2016 guidance was issued by the PRORURAL+ Managing Authority and sent to all staff responsible for 
handling investment projects in order to avoid any issues similar to those signalled by the ECA auditors arising in future. 

With the implementation of this measure, beneficiaries in similar situations will be notified by the Administration of the 
need to correct their parcels. Note that nothing that was detected in the on-the-spot check by the ECA could be found by 
an administrative control.” 

Slovakia: Action taken: YES; Action completed: NO; Completion date: 31 December 2017 

Ministry of Agriculture and Rural Development: 

The Agricultural Paying Agency drew up notices of suspected irregularities concerning the applicants and sent them to 
the relevant departments on 24 January 2017. On-the-spot checks will be completed by 31 December 2017. 

Spain: Action taken: YES; Action completed: YES; Completion date: 

One-off error. The SIGPAC has been updated with the detected error. 

United Kingdom: Action taken: YES; Action completed: YES; Completion date: 31/12/2016 

Inspection findings of overdeclaration of two options reviewed and the overpayment calculated.  Found to be de-minimus 
value, so no recovery was required. 

Annex 7.3 – 
example 9 

In  Poland  we  examined  a 
payment  made  to  a  public  body 
the  reconstruction  of  an 
for 
embankment 
protect 
to 
agricultural  land  against  river 
flooding.  Construction  works 
represented  97  %  of  the  audited 
costs.  We  reviewed  the  public 
procurement  procedure  used  to 
company  which 
the 
select 
carried  out 
the  construction 
works, and found that the lowest 
offer had been excluded without 
the 
reason.  Therefore, 
valid 
costs 
not 
concerned  were 
eligible, leading to a 97 % error. 

Poland: Action taken: NO; Action completed: NO; Completion date: 

Zdaniem Agencji Restrukturyzacji i Modernizacji Rolnictwa (ARiMR) ustalenie ETO nie potwierdza nieprzestrzegania 
przepisów zamówień publicznych. 

In ARiMR’s view it is not possible to agree with the ECA auditors’ claim that, in accordance with Article 197(1) of the 
Public Procurement Act, a ruling of the National Appeal Body (KIO) has the same legal effect as a court judgment only 
once a court has declared it to be enforceable [...]. 

Article 197(1) of the Public Procurement Act regulates the enforceability of KIO rulings. In accordance with that 
provision, once a court has declared a KIO ruling to be enforceable it has the same legal effect as a common court 
judgment. At the same time, that provision make reference to Article 781 of the Code of Civil Procedure, which also 
applies to court judgments. Meanwhile, in accordance with Article 197(3) of the Public Procurement Act, a court is to 
declare a ruling - in this case a KIO ruling - to be enforceable only when it is suitable for enforcement proceedings. 

This rule thus applies to situations in which, if a ruling is suitable for enforcement but a party to the appeal proceedings is 
convinced that the other party will not enforce it, the party can apply for it to be declared enforceable and demand that it 
be enforced by means of enforcement proceedings, i.e. effectively force the enforcement of the ruling irrespective of the 

113 

 
 
wishes of the obliged party. This is also the meaning that should be read into Article 197(1) of the Public Procurement 
Act when it lays down that, after a KIO ruling has been declared enforceable by a court, it has the same legal effect as a 
court judgment. 

Understanding that provision to mean that a KIO ruling without a declaration of enforceability is without legal effect 
leads to erroneous conclusions. Indeed, a declaration of enforceability is possible only in respect of rulings that are 
suitable for enforcement proceedings. The question of whether a given document constitutes an enforceable instrument is 
decided not only by the criteria mentioned in Article 777 of the Code of Civil Procedure, but also by substantive criteria 
concerning the content of the legal document in question. These criteria are as follows: a precise indication of the creditor 
and the debtor, an exact indication of the obligation (i.e. how the debtor should behave for enforcement to be effected) 
and for the enforceable instrument to have comprehensible content allowing it to be enforced. As a rule, KIO rulings 
dismissing contractors’ appeals (just like common court judgments dismissing actions) are not suitable for enforcement 
proceedings in respect of substantive decisions, meaning that a declaration of enforceability cannot be added to them. 
The annual reports on the functioning of the public procurement system in Poland published by the President of the 
Public Procurement Office (‘the President’) show that the proportion of such decisions has for years remained stable at 
more than half the KIO’s substantive rulings. If the conclusions drawn in the audit were deemed well founded, this would 
mean that a huge proportion of the KIO’s rulings have no legal effect. The scale of the negative consequences for the 
entire public procurement system in Poland that would result from deeming these conclusions well founded thus appears 
self-evident.  

The position set out above is confirmed by the legal opinion of the President published in the Informator Urzędu 
Zamówień Publicznych (Public Procurement Office Gazette), issue No 9 of September 2012 (www.uzp.gov.pl)), which 
stated that: ‘In addition, the Public Procurement Act lays down a specific procedure under which it is permissible to 
demand the enforcement of a judgment in cases where a contracting authority fails to take the actions indicated in the 
operative part thereof. The issue of the enforceability of National Appeal Body (KIO) rulings is governed by Article 
197(1) of the Public Procurement Act’. 

In accordance with Article 363(1) of the Code of Civil Procedure, a court judgment becomes final if it is not subject to 
appeal or any other remedy. In addition, Article 365(1) of the Code of Civil Procedure lays down that a final judgment is 
binding not only on the parties and the issuing court, but also on other courts and other state bodies and public 
administration bodies, and, if provided for by the law, also on other persons. 

Although the Public Procurement Act does not include a stand-alone provision concerning how KIO rulings become 
final, the legislator has used the concept of ‘finality’ in respect of KIO’s rulings (Article 195(3) of the Public 
Procurement Act). Section 36 of the Prime Ministerial Regulation of 22 March 2010 on proceedings to hear appeals lays 
down that the President of the KIO (and, until 10 January 2017, also the vice-president of the KIO or an authorised 
member of the KIO) may declare a ruling final either ex officio or at the request of a party to or participant in appeal 
proceedings. An annotation stating that a ruling is final is made on the original of the ruling, specifying the date on which 
it became final and featuring the signature of the person declaring it final. Copies also receive an annotation stating that 

114 

 
 
the ruling is final, giving the date on which it became final and the signature of the person making the annotation. 

The Public Procurement Act is an element of civil law, as demonstrated by the reference in it to the fact that the Civil 
Code of 23 April 1964 applies to the actions taken by contracting authorities and contractors during contract award 
procedures and to public contracts, unless the Act specifies otherwise. In this context the Act constitutes a lex specialis 
vis-à-vis the general provisions of the Civil Code. The Act also refers to the Code of Civil Procedure of 17 November 
1964 in relation to appeal proceedings, with the provisions on the arbitration courts to apply in unresolved cases. 
Proceedings held following an appeal against a KIO ruling are civil-law proceedings and are subject, mutatis mutandis, to 
the provisions of the Code of Civil Procedure on appeals. 

It would thus be legitimate for the question of KIO rulings becoming final to be subject, by analogy, to the rules set out 
in Articles 363(1) and 365(1) of the Code of Civil Procedure. This would mean that a KIO ruling becomes final if it is 
not subject to appeal before a regional court and that it is binding not only upon the parties and the KIO but also upon 
other courts and other state bodies and public administration bodies, and, if provided for by the law, also upon other 
persons 

Also worth noting here is that the KIO is a court or tribunal within the meaning of Article 267 of the Treaty on the 
Functioning of the European Union (OJ C 326 of 2012, p. 1). The fact that the KIO has this status was confirmed by the 
European Court of Justice in its judgment of 13 December 2012 in case C 465/11 (Forposta SA and ABC Direct 
Contact), where it held that the KIO constitutes a court or tribunal, within the meaning of 267 TFEU, in the exercise of 
its jurisdiction in relation to the provisions mentioned, as was the case in the main proceedings. 

In accordance with the above positions, it should thus be recognised that if a KIO ruling has not been appealed against to 
a regional court or if the deadline for appeal has passed, then it has become final and is binding not only upon the parties 
and the KIO but also upon other courts and other state bodies and public administration bodies, and, if provided for by 
the law, also upon other persons. It therefore cannot be overturned, in particular as a result of an audit carried out by any 
particular body. 

Also worthy of comment is the ECA’s claim that the President, in two positions expressed in other cases, and the KIO in 
several other cases, acknowledged as legitimate a position different from that adopted by the KIO in its ruling of 19 
November 2013 (ref. KIO 2566/13). 

A position expressed by the President in a reply to a question from a member of parliament has absolutely no binding 
effect on contractors, contracting authorities or, above all, the KIO. It can merely provide a certain indication of, for 
example, the position which the President will take in a possible ad hoc check or in the event of a decision on whether to 
appeal against a KIO ruling. 

In accordance with Article 198b of the Public Procurement Act, the President may appeal against KIO judgments. The 
President did not do so in the current case. In ARiMR’s opinion, this implies that the President did not deem it legitimate 
to challenge this specific substantive decision by the KIO, but rather deemed it correct. 

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What is more, the arguments set out in the findings of the ECA audit suggest a belief that the President’s position on a 
given legal issue is of greater value than the position adopted in a specific case by the KIO. We cannot share this view. It 
is sufficient here to mention Article 167 of the Public Procurement Act, which lays down that, following an ad hoc check 
carried out by the President, a contracting authority has the right to submit reasoned reservations to the President within 
seven days of delivery of the results of the check. The President is to examine the reservations within 15 days of 
receiving them. If the President does not accept the reservations they are referred to the KIO for its opinion. The KIO’s 
opinion is binding upon the President. That rule in itself clearly demonstrates the weakness of any argument claiming 
that the position of the President is favoured, as a rule, over the position of the KIO. 

In addition, the findings of the audit appear to overlook elements of the President’s position that point rather clearly to 
the fact that the President also allows for the possibility of a given factual situation being legitimately assessed in a 
manner that differs from the assessment made elsewhere, including in a specific document from the President, if the 
situation includes elements justifying this divergence. In the reply dated 11 March 2013 to a question from a member of 
parliament, the President stated that, in the event of flat-rate remuneration, ‘as a rule there is no justification for 
contractors to submit cost estimates’ and, later, that ‘if a contracting authority opts for flat-rate remuneration, there are 
generally no grounds for rejecting, on the basis of Article 89(1)(2) of the Public Procurement Act, a bid from a contractor 
that did not annex a cost estimate thereto. In ARiMR’s view, the underlined expressions in the President’s position 
unambiguously show that this is not a categorical position that rules out any exceptions depending on the factual situation 
in specific proceedings. 

An examination of the grounds for the ruling of 19 November 2013 (ref. KIO 2566/13) can only lead to the conclusion 
that the KIO – contrary to what the audit findings suggest – is not at variance with the position expressed by the 
President. In those grounds, the KIO expressed in a clear and logical manner the reasons for which the remuneration in 
this specific case was not flat-rate but rather a combination of flat-rate and estimate-based. Contrary to the audit findings, 
according to which the KIO decision is not based on facts, the grounds for the KIO’s ruling in fact indicated elements of 
the tender specifications and the bid, and thus of the factual situation established during the proceedings, that were the 
basis for the ruling. What is more, the argument set out in the audit findings as regards the factual situation consists of a 
single sentence: The tender documentation and contract [...] specified that the remuneration was of a flat rate nature, and 
the actual payment after the work was also made on a flat-rate basis. Two conclusions can be drawn from this sentence: 
firstly, the audit findings overlooked some elements of the factual situation that were crucial for the decision, and 
secondly account was taken of how the payment was actually made after the work, although for obvious reasons this 
factor could not have been part of the factual situation either on the date when the bids were assessed and chosen or on 
the date when the KIO adjudicated on the case. If the grounds to the KIO’s ruling had included defects such as the audit 
findings as regards establishing the factual situation, these would have provided a basis for challenging that judgment on 
account of infringement of procedural rules on establishing the factual situation.  

In ARiMR’s opinion, it also appears unfounded to refer in the audit findings to the decisions of the KIO in other cases 
without establishing whether the factual situations were identical to that in the audited proceedings. 

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In addition, in the ECA audit findings – despite the categorical statement that KIO rulings have no legal relevance unless 
a court has declared them to be enforceable – there is no information whatsoever as to whether a check was carried out 
on compliance with this requirement, set by the audit authority itself, by those KIO rulings to which the audit findings 
refer, and which those findings deem well-founded and, for unexplained reasons, binding. 

In the Annual Report, in its own reply concerning the error in respect of non-compliance with public procurement rules 
(Example 9 – Public body unduly excluded lowest offer for execution of works) outlined in Annex 7.3 – Overview of 
errors with an impact of at least 20% for rural development, the environment, climate action and fisheries, the European 
Commission itself stressed that the Paying Agency had acted in accordance with the decision of the National Appeal 
Body (KIO). 

Poland: Action taken: YES; Action completed: NO; Completion date: 

Poland is in the process of implementing the tasks under the corrective action plan. 

Annex 7.4 

previous 
Follow-up 
of 
recommendations: 
the 
Commission  actively  monitors 
remedial 
the  application  of 
to 
actions  with 
the 
deficiencies 
control 
in 
system  applicable  to  EU  aid  for 
producer groups in Poland 

regard 
the 

117 

 
 
 
 
 
Paragraphs 

Observations in the ECA's 
2016 Annual Report 

Member States' replies 

CHAPTER 8 – Security and citizenship 

Paragraph 
8.6.(a) – 
footnote 5 

under 

seven 

The  sample  consisted  of  five 
transactions 
shared 
management  with  Member 
direct 
States, 
the 
management 
three 
Commission, 
involving 
of 
advances  to  agencies;  Germany, 
Spain, 
and 
Lithuania. 

under 
by 
and 
clearing 

France, 

Italy 

the 

France: Action taken: YES; Action completed: YES; Completion date: // 

pas d’observations 

Germany: Action taken: ; Action completed: ; Completion date: 

For information purposes only; no answer required. 

Italy: Action taken: ; Action completed: ; Completion date: 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

From 20 to 21 January 2016, the European Court of Auditors carried out an audit of the performance of Lithuania’s 
Annual Programme for 2012 in respect of the External Borders Fund (one of the funds under the General Programme 
SOLID), under which visa fees lost were declared (expenditure declaration SOL.20150054, for the amount of EUR 21 
918 009.49). In the conclusion of its report, the ECA stated that it had no specific remarks to make. 

Spain: Action taken: ; Action completed: ; Completion date: 

We have nothing further to add to the Commission’s observations. 

Paragraph 
8.8 – footnote 
6 

We  tested  the  same  systems  in 
visits to four Member States. For 
AMIF  in  Spain  and  Austria  and 
the ISF in Germany and France. 

Austria: Action taken: YES; Action completed: YES; Completion date: 19.06.2015 

Regarding the observations of the European Court of Auditors, it should be noted that the European Parliament was 
involved in the negotiations on AMIF for the first time. This was not the case with the previous Fund. The negotiations 
were often protracted, slowing the AMIF launch phase for a whole year, with knock-on effects for the implementation of 
measures in the individual Member States. Despite that, Austria was still one of the top-ranking Member States in terms 
of the implementation and payment of the AMIF funds and also has one of the best execution rates. A call was launched 
on 27 February 2015 and numerous projects were launched on the basis of that call from 1 July 2015. 

France: Action taken: YES; Action completed: YES; Completion date: // 

No comments 

Germany: Action taken: YES; Action completed: YES; Completion date: 30.6.2007 

118 

 
 
ISF-Borders: 

Multi-annual  financial  programming  (for  the  whole  financial  period),  agreed  in  consultation  with  the  project 
coordinators, has been in place since the beginning of the programming period. This is to ensure that the funds allocated 
are spent within the programming period.  

Background to 2014/2015:  

- overlap of programming periods with the preceding fund (External Borders Fund) 

- exhaustion of EBF funding in 2014 and 2015 and therefore no allocated expenditure for the ISF in this period. 

The first invitation to submit proposals for projects was published on 14 October 2014. It was not possible to publish an 
invitation at the beginning of the programming period because the Commission did not approve the National Programme 
as  the  basis  for  project  funding  until  26  March  2015;  the  first  invitation  to  submit  project  proposals  was  subject  to 
approval of the national programme. Projects submitted in response to this first invitation were eligible if they began in 
the period 1 January 2014 to 30 June 2015. 

AMIF: 

In 2014 only six projects funded as a result of the 2014 invitation started up, a further 64 began in the first quarter of 
2015 and 51 more in the second quarter of 2015.   

Of  the  funds  available  under  the  2014  invitation,  totalling  EUR  €23  059  306.74  per  annum,  EUR  €6  194  807.79  was 
disbursed in connection with the 2015 payment request in the National Programme (projects and technical assistance). 
This  is  26.86%  of  the  annual  amount.  The  2016  payment  request  already  accounted  for  EUR  32  170  676.04  of 
expenditure (projects and technical assistance).  

Since,  with  the  first  invitation  for  project  year  2014  (published  on  14  October  2014)  the  funds  for  the  projects  from 
programming  year  2014  (1  January  2014)  onwards  had  already  been  authorised  and  earmarked,  it  is  assumed  that  the 
delay  in  the  programme  planning  will  have  no  impact  on  the  successful  implementation  of  the  AMIF  programme  in 
Germany. 

ISF-Security 

No measures were taken for ISF-Security. In this respect we refer to the Commission’s reply. 

Spain: Action taken: ; Action completed: ; Completion date: 

We have nothing further to add to the Commission’s observations. 

Box 8.2 

Implementation  of  AMIF  and 
ISF up to the 2015 financial year 

Austria: Action taken: YES; Action completed: YES; Completion date: 19.06.2015 

Regarding the delays, reference is made to the response to Annex I - Chapter 8, Point 8.8 (AMIF). As shown in the 

119 

 
 
was relatively slow 

diagram, AT is one of the top three Member States in terms of execution rate.  

Belgium: Action taken: ; Action completed: ; Completion date: 

Bulgaria: Action taken: ; Action completed: ; Completion date: 

Ministry of Interior For the financial year 2015, EUR 763 300 was disbursed under the AMIF, or 12% at programme 
level, and for the ISF the corresponding amount was € 8 842 600, or 8.7% at programme level. 

Estonia: Action taken: ; Action completed: ; Completion date: 

Finland: Action taken: YES; Action completed: NO; Completion date: 

The implementation of AMIF and ISF was slow until 2015 due to a delay in approving national programmes. Finland's 
AMIF programme was launched at the end of 2015 while the implementation of the ISF programme did not begin until 
2016 (the national programmes were approved only at the end of 2015). Finland's implementation report for the 2016 
financial year submitted to the Commission shows that 48.9% of the national programme for AMIF and 14.4% of the 
national programme for ISF have been implemented. In November 2016 the level of commitment for the ISF programme 
was 62% and for the AMIF programme 54%, which means that the national implementation of both funds is progressing 
well. 

France: Action taken: YES; Action completed: YES; Completion date: // 

Delay in the launch of the programme due to late entry of the relevant legal bases. 

Germany: Action taken: YES; Action completed: YES; Completion date: 30.6.2007 

ISF-Borders: 

Multi-annual  financial  programming  (for  the  whole  financial  period),  agreed  in  consultation  with  the  project 
coordinators, has been in place since the beginning of the programming period. This is to ensure that the funds allocated 
are spent within the programming period.  

Background to 2014/2015:  

- overlap of programming periods with the preceding fund (External Borders Fund) 

- exhaustion of EBF funding in 2014 and 2015 and therefore no allocated expenditure for the ISF in this period. 

The first invitation to submit proposals for projects was published on 14 October 2014. It was not possible to publish an 
invitation at the beginning of the programming period because the Commission did not approve the National Programme 
as  the  basis  for  project  funding  until  26  March  2015;  the  first  invitation  to  submit  project  proposals  was  subject  to 
approval of the national programme. Projects submitted in response to this first invitation were eligible if they began in 
the period 1 January 2014 to 30 June 2015. 

120 

 
 
AMIF: 

In 2014 only six projects funded as a result of the 2014 invitation started up, a further 64 began in the first quarter of 
2015 and 51 more in the second quarter of 2015.   

Of  the  funds  available  under  the  2014  invitation,  totalling  EUR  €23  059  306.74  per  annum,  EUR  €6  194  807.79  was 
disbursed in connection with the 2015 payment request in the National Programme (projects and technical assistance). 
This  is  26.86%  of  the  annual  amount.  The  2016  payment  request  already  accounted  for  EUR  32  170  676.04  of 
expenditure (projects and technical assistance).  

Since,  with  the  first  invitation  for  project  year  2014  (published  on  14  October  2014)  the  funds  for  the  projects  from 
programming  year  2014  (1  January  2014)  onwards  had  already  been  authorised  and  earmarked,  it  is  assumed  that  the 
delay  in  the  programme  planning  will  have  no  impact  on  the  successful  implementation  of  the  AMIF  programme  in 
Germany. 

ISF-Security 

No measures were taken for ISF-Security. In this respect we refer to the Commission’s reply. 

Ireland: Action taken: NO; Action completed: ; Completion date: 

The Asylum, Migration and Integration Fund (AMIF) 2014 to 2020 (but with the eligibility period ending on 31 
December 2022) has four specific objectives relating to asylum (including resettlement), integration, return, and 
solidarity. A call for applications under the Fund was published on 22 September, 2016.  This call focused on the asylum 
and integration areas and aimed to make €4.5 million available over the period 2017 to 2020. Twenty projects have been 
selected to receive funding. A further call will be launched in 2018. 

Italy: Action taken: ; Action completed: ; Completion date: 

Lithuania: Action taken: NO; Action completed: ; Completion date: 

Lithuania is in second place out of 29 Member States with regard to the absorption of funds from the Internal Security 
Fund (ISF) and the Asylum, Migration and Integration Fund (AMIF). 

Luxembourg: Action taken: ; Action completed: ; Completion date: 

Netherlands: Action taken: ; Action completed: ; Completion date: 

Not applicable.  

Spain: Action taken: ; Action completed: ; Completion date: 

Box 8.3.(1) 

There  was  a  high  number  of 
draft  AMIF/ISF  Programmes 

Germany: Action taken: YES; Action completed: YES; Completion date: 21.4.17 

121 

 
 
the 

German 

(e.g. 
ISF 
programme  had  10  versions  and 
the UK’s AMIF programme had 
nine)  prepared  by  Member 
the 
States  and  reviewed  by 
Commission  prior 
their 
approval. 

to 

Box 8.3.(4) 

In  Austria  and  Spain,  on-the-
spot  checks  carried  out  by  the 
responsible  authorities  were  not 
sufficiently  documented,  and  in 

ISF-Borders: 

On 1 March 2017, in connection with the accounting report to the EU Commission, it was confirmed that the designation 
criteria remained in place unaltered. This confirmation is based partly on the audit of the management and control system 
carried out in 2016 (see system audit report of 21 April 2017).  

Since the National Programme was approved by the Commission on 19 March 2015, and the associated management and 
control system of the Competent Authority, divided into two subsections, was thereby recognised, the Audit Authority 
can  see  no  infringement  of  Article  25(1)(a)  of  Regulation  (EU)  No  514/2014  in  the  purely  technical  division  of  the 
subsections of the Competent Authority. 

When the ECA carried out its audit in September 2016, only one project was advanced enough to be auditable. It was 
subjected to a full audit as part of walk-through procedure (see audit report of 20 March 2017). Several more projects are 
now advanced enough and so have also been audited. 

AMIF: 

Confirmation  of  compliance  with  the  designation  criteria  is  based  primarily  on  the  activities  described  in  the  AMIF 
Competent Authority’s management and control system, which had not yet been fully put into practice at the time of the 
audit.  For  this  reason,  the  Competent  Authority  could  provide  only  a  few  proofs  on  compliance  with  the  designation 
criteria, meaning that when the audit opinion was being prepared, only the potential effectiveness of the management and 
control  system  was  certified  by  the  Audit  Authority.  This  situation  has  changed  in  the  2017  budget  year,  since  the 
Competent Authority now largely performs the tasks listed in the management and control system. 

Because  of  the  delayed  approval  of  the  National  Programme  and  the  resulting  different  times  of  commencement,  the 
projects’ implementation was not advanced enough to allow the Audit Authority to carry out its control tasks. Only when 
projects  are  well  underway  and  the  Competent  Authority  has  performed  certain  previous  activities  can  the  Audit 
Authority perform its control tasks. This is expected to be the case in the 2018 budget year. 

ISF-Security 

Re 8.3 point 1: The MS took no measures; also, in the opinion of the MS, drawing up the National Programme was a 
time-consuming process involving complex consultation. 

United Kingdom: Action taken: NO; Action completed: ; Completion date: 

As per the Commission reply, this was an iterative process.  

Austria: Action taken: YES; Action completed: YES; Completion date: 4.9.2017 

In response to the European Court of Auditors’ remark, attention is drawn to the fact that documentation relating to on-
the-spot checks was available at all times. This was brought to the Court’s attention. The Court’s recommendation 
actually had more to do with better information to the project promoters on the results of the on-the-spot checks. This 

122 

 
 
the 

Spain, 
for 
inspection  were  not  drawn  from 
the full population. 

samples 

Box 8.3.(5) 

Spain  and  France  do  not  have  a 
dedicated 
the 
management  and  control  of 
funds. 

tool 

for 

IT 

recommendation was gratefully accepted by the responsible authority in Austria and has already been implemented in 
line with the principle of continuous optimisation of the management and control system. 

Spain: Action taken: YES; Action completed: ; Completion date: 1/9/2017 

As regards the on-the-spot checks, the models and checklists to be used for administrative and on-the-spot checks 

have been updated and annexed to the Responsible Authority’s management documents. 

France: Action taken: YES; Action completed: YES; Completion date: 

The Commission is reminded that PRESAGE, the system set up under the previous programming period (2007-2013), 
has only a temporary function for the management of certain funds (OP).  

*SYNERGIE is an application developed for the management of European structural and investment funds for the 2014-
2020 period; it is used by a large number of programmes for Community funds in shared management for that period. 
Additional developments are planned for certain specific characteristics of AMIF and EFSI, but the aim is not to 
introduce a ‘specific IT tool’.  

*SYNERGIE is used for AMIF management. It is operational and staff of the Office for the shared management of 
European funds (BGMFE) at the Ministry of the Interior (DGEF — Directorate-General for Foreign Nationals in France) 
and the delegated authority have been trained in the different Synergie modules (with the exception of staff in charge of 
the 4C on the certification function). They have user manuals.  

* The competent authority is aware of the need to catch up as regards data entry in the application. To help staff assigned 
to this task, an auxiliary was employed between September 2016 and February 2017. A new auxiliary has been recruited 
and has been working on this since July 2017. The delegated authority used a reservist in the National Police for 60 days 
to help the DCI team catch up on file entry (investigation/programming/contracting) An auxiliary post will be requested 
to help the audit unit catch up on file entries. 

*Further, a new post ‘IS officer/AMIF-ISF checks’ (chargé de mission SI/contrôles FAMI-FSI) has been created at the 
BGMFE and was published in September 2017 to follow up on the recommendations of the control bodies. The job 
description states that the chargé de mission will, inter alia: 

- assist in dealing with the Synergie data backlog in cooperation with all office sections, ensuring data security; 

- provide technical assistance to Synergie users in the office in their data entry work; 

- help Synergie users by compiling answers to questions asked by users and requesting the services and payment agency 
to do any necessary work to ensure smooth use of the IS; 

- process data from Synergie via the ‘Aggregator’ module on the basis of the Office’s needs and coordinate Aggregator 
output with the steering tables;  

123 

 
 
 
- be the Synergie contact person for the ASP and take part in the coordination meetings of the national contact people. 

So as not to add to the projects to be entered in Synergie, since September 2017 staff in charge of investigation, 
programming and contracting have been working directly in the application, as have the staff in charge of administrative 
checks. 

Future on-the-spot checks (operational and financial) will also be entered in the tool as and when required as soon as the 
application modules are operational (once the administrative checks are in the tool). 

At 18 October 2017, of the 412 AMIF projects submitted, 281 were in Synergie, comprising 171 at the 
programming/contracting stage, 72 at the submission stage, 33 at the investigation stage and 5 abandoned files. At the 
same date, 10 out of around 100 administrative checks of AMIF projects had been entered in Synergie. 

On the ISF, 104 files out of 116 submitted were entered, comprising 65 at the programming/contracting stage, 9 at the 
submission stage, 29 at the investigation stage, and 1 abandoned file. Further, one administrative check out of 21 has 
been entered in Synergie for the ISF Police (none for the ISF Borders/Visa)  

To improve communication between the competent authority and the authority responsible for developing the application 
(the Service and Payment Agency - ASP), a meeting between the two parties has been held every fortnight since 
February 2017 (Programme Committee).  

The Audit Authority (CICC) — system audit finalised in July 2017 and follow-up note being sent to the Responsible 
Authority — made strong representations to the RA on the need for a fully operational information system to be in place 
by June 2018. 

Tripartite meetings also involving the audit authority were held in July, September and October 2017 to clarify the 
particular needs of the AMIF and ISF, in particular for drawing up the annual accounts. 

Spain: Action taken: YES; Action completed: ; Completion date: 1/9/2017 

The dedicated IT application for the management of the Fund is also currently operational. 

Box 8.3.(6) 

Weaknesses  in  audit  activities 
performed by audit authorities: 

In  Germany  and  Austria  there 
was  insufficient  evidence  that 
the 
authority 
complied  with  the  designation 
criteria. 

responsible 

Austria: Action taken: YES; Action completed: NO; Completion date: NOT completed 

Since the Audit Authority’s report was completed in conjunction with checks on compliance with the designation criteria 
and a subsequent adjustment of the audit documentation of the Audit Authority is not warranted, in subsequent systems 
checks closer attention is being, and will be, paid to the documentation relating to audit activities and the results thereof.  
In addition, compliance with the designation criteria is continuously assessed during systems checks, and the results of 
these actions are provided in an annual report to the designating authority. A quality assessment of the key audit 
documentation ensures that there is sufficient evidence of compliance with the designation criteria. 

In 

France 

the 

sampling 

The responsible authority considers that the designation process was carried out in accordance with the provisions of the 

124 

 
 
 
methodology  did  not  take  into 
account  the  differences  between 
terms  of 
AMIF  and  ISF 
inherent risks. 

in 

In  Germany  there  was  limited 
administrative 
testing 
controls. 

of 

AMIF Regulation. In purely general terms the question arises as to whether such a procedure should, in future, be a 
compulsory element of the management of the Fund. 

France: Action taken: YES; Action completed: YES; Completion date: 

As regards the sampling methodology, the comment in the report reflects a remark the Commission made in September 
2016 during the ISF audit, to the effect that taking one sample for the AMIF/ISF without differentiating between the two 
funds was inappropriate, given that the audit opinions are issued by fund when the financial statements are issued in 
February. As shown in this audit, the AA (CICC) took the Commission’s recommendation on board and conducts 2 
sampling operations, one for the AMIF and one for the ISF, as indicated also in comment 4 of item 6. 

Germany: Action taken: YES; Action completed: YES; Completion date: 21.4.17 

ISF-Borders: 

On 1 March 2017, in connection with the accounting report to the EU Commission, it was confirmed that the designation 
criteria remained in place unaltered. This confirmation is based partly on the audit of the management and control system 
carried out in 2016 (see system audit report of 21 April 2017).  

Since the National Programme was approved by the Commission on 19 March 2015, and the associated management and 
control system of the Competent Authority, divided into two subsections, was thereby recognised, the Audit Authority 
can  see  no  infringement  of  Article  25(1)(a)  of  Regulation  (EU)  No  514/2014  in  the  purely  technical  division  of  the 
subsections of the Competent Authority. 

When the ECA carried out its audit in September 2016, only one project was advanced enough to be auditable. It was 
subjected to a full audit as part of walk-through procedure (see audit report of 20 March 2017). Several more projects are 
now advanced enough and so have also been audited. 

AMIF: 

Confirmation  of  compliance  with  the  designation  criteria  is  based  primarily  on  the  activities  described  in  the  AMIF 
Competent Authority’s management and control system, which had not yet been fully put into practice at the time of the 
audit.  For  this  reason,  the  Competent  Authority  could  provide  only  a  few  proofs  on  compliance  with  the  designation 
criteria, meaning that when the audit opinion was being prepared, only the potential effectiveness of the management and 
control  system  was  certified  by  the  Audit  Authority.  This  situation  has  changed  in  the  2017  budget  year,  since  the 
Competent Authority now largely performs the tasks listed in the management and control system. 

Because  of  the  delayed  approval  of  the  National  Programme  and  the  resulting  different  times  of  commencement,  the 
projects’ implementation was not advanced enough to allow the Audit Authority to carry out its control tasks. Only when 
projects  are  well  underway  and  the  Competent  Authority  has  performed  certain  previous  activities  can  the  Audit 
Authority perform its control tasks. This is expected to be the case in the 2018 budget year. 

125 

 
 
Box 8.4 

to 

islands 

assistance 

accommodate 

authorities 
2015, 

We  examined  a  payment  by  the 
Commission (DG Migration and 
Home  Affairs)  to  Greece  of 
emergency 
to 
transport  non-EU  migrants  from 
the  Greek 
Greek 
mainland  between  August  and 
November  2015,  at  the  peak  of 
the  refugee  crisis.  The  Greek 
authorities paid 8 million euro to 
charter  vessels  to  be  used  to 
transport, 
and 
provide  snacks 
to  migrants. 
Under an agreement signed with 
the  Greek 
in 
November 
the 
Commission  contributed  a  grant 
of  6  million  euro  to  this  action. 
The 
shipping 
companies  transported  over  150 
000  migrants,  providing  them 
and 
accommodation 
with 
adult 
snacks, 
charged 
and 
migrants  60  euro  per 
ticket 
(children were charged up to 30 
euro)  for  their  passage,  earning 
up to 9 million euro. The vessels 
carried  no  passengers  on  their 
trips 
to 
from 
the 
collect  migrants 
islands.  The  Commission  was 
informed  that  the  migrants  were 

the  mainland 

selected 

from 

ISF-Security 

Re 8.3 point 1: The MS took no measures; also, in the opinion of the MS, drawing up the National Programme was a 
time-consuming process involving complex consultation. 

Greece: Action taken: ; Action completed: ; Completion date: 

126 

 
 
by 

the 

contract 

charged 
shipping 
companies.  However,  when 
assessing  the  proposed  action  in 
October  2015,  and  evaluating 
the  performance  of  the  action 
before paying the balance of the 
the 
in  March  2016, 
grant 
Commission did  not refer to the 
potential  income  from  migrants. 
The 
documentation 
between  the  Greek  authorities 
and 
the  shipping  companies 
referred to charging migrants but 
did  not  estimate  these  revenues. 
There  is  therefore  a  lack  of 
transparency  of 
the  split  of 
funding  between  public  sources 
and  the  revenue  from  migrants, 
for  this  emergency  action.  The 
average  market  price  in  high 
season  for  a  return  ticket  in 
economy  class  for  the  routes 
concerned  was  up  to  90  euro. 
The  income  from  migrants,  of 
up 
ticket, 
contributed  to  the  revenues  and 
consequently,  to  any  profits  of 
the  shipping  companies.  EU 
legislation 
allow 
beneficiaries  of  EU  grants  to 
the 
obtain 
implementation of a project, and 
indeed  the  Greek  authorities,  as 
grant beneficiary, did not make a 
profit.  The  Greek  authorities’ 
shipping 
contracts  with 

to  60  euro  per 

does  not 

profits 

from 

the 

127 

 
 
companies  covered  the  use  of 
vessels  for  periods  of  up  to  20 
days,  at  a  cost  of  between  30 
000 and 40 000 euro per day per 
ship,  for  a  total  of  228  shipping 
days. There were days on which 
ships  were  inactive  in  port,  but 
the  companies  were  paid  as 
agreed  in  the  contract.  Three 
ships were inactive in port for 3, 
4  and  5  days  respectively,  for 
which  the  shipping  companies 
were paid 415 500 euro. 

128 

 
 
 
 
 
Paragraphs 

Observations in the ECA's 
2016 Annual Report 

Member States' replies 

CHAPTER 10 – Administration 

Paragraph 
10.11 

Paragraph 
10.11 

Croatia: Action taken: ; Action completed: ; Completion date: 

The  key  changes  in  the  number 
of  posts  in  the  establishment 
plan  are  set  out  in  Box  10.3.  In 
addition to the 5  % reduction in 
the  number  of  posts  and  the 
posts  added  as  a  result  of 
Croatia’s 
the 
following  changes  explain  most 
of  the  net  decrease  of  230  posts 
under 
‘Other  additions  and 
reductions’. 

accession, 

The institutions created 53 posts 
in  connection  with  the  phasing-
for 
out  of 
Irish 
translation 
language. 

the  derogation 

into 

the 

Ireland: Action taken: NO; Action completed: ; Completion date: 

No action required. 

129 

 
 
 
 
 
 
ANNEX II – Template used for the Member States Questionnaire 

European Court of Auditors' 2016 Annual Report 

Member State QUESTIONNAIRE 

Date: ______________________________________ 

Reply from (please indicate the name of the authority responsible for providing the requested information):  

Name of the Authority:  __________________________________ 
Contact Person:  
Telephone: 
Email address:   

__________________________________ 
__________________________________ 
__________________________________ 

The questionnaire consists of two parts: 

Part A: 

General questions concerning the main chapters of the report covering major spending policy areas of the EU budget (i.e. competitiveness 
for growth and jobs; economic, social and territorial cohesion; natural resources). 

Part B: 

General comments by the Member State concerning the 2016 Annual report or general issues relating to the discharge procedure.  

130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART A 

Please reply to the general questions below   

QUESTION 1 – COMPLIANCE WITH RULES AND REGULATIONS 

The 2016 Annual report of the European Court of Auditors (ECA) identifies the main error types (based on the ECA's audits) in relation to the major EU 
shared management spending areas (common agricultural policy and economic, social and territorial cohesion policy) as listed below. The ECA goes 
on to report concrete findings in relation to the above mentioned main risks (Chapters 6 and 7). The objective of the questions below are to assess if you agree 
with the ECA's conclusion concerning the error types and their relative importance in these spending areas, and to what extent you have taken preventive 
measures to avoid such errors in the future.  

1.1. Economic, social and territorial cohesion 

The most typical error types in diminishing order of importance are: 

  Ineligible costs included in the expenditure declarations 

  Serious failure to respect public procurement rules 

  Ineligible project/activities or beneficiaries 

Question 1.1.1 – Do you agree that these are the most common error types? 

  Yes  

 No 

If you do not agree, then please describe other major error types: ______________________________________________________________ 

Question 1.1.2 – Do you agree with the relative important of these error types?   

  Yes   

 No 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: ______________________ 

Question 1.1.3 – Please describe actions you have taken to prevent such errors:___________________________________________________ 

1.2. Rural development, the environment, climate action and fisheries 

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART A 

Please reply to the general questions below   

The most typical error types in diminishing order of importance are: 

1.  Ineligible beneficiary, activity, project or expenditure  

2.  Overstated or ineligible area 

3.  Non-compliance with public procurement rules 

4.  Administrative error 

Question 1.2.1 – Do you agree that these are the most common error types? 

  Yes  

 No 

If you do not agree, then please describe other major error types: ______________________________________________________________ 

Question 1.2.2 – Do you agree with the relative important of these error types?   

  Yes   

 No 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: ______________________ 

Question 1.2.3 – Please describe actions you have taken to prevent such errors:___________________________________________________ 

1.3. EAGF 

The most typical error types in diminishing order of importance are: 

1.  Overstated or ineligible area 

2.  Ineligible beneficiary, activity, project or expenditure  

3.  Administrative error 

132 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART A 

Please reply to the general questions below   

Question 1.3.1 – Do you agree that these are the most common error types? 

  Yes  

 No 

If you do not agree, then please describe other major error types: ______________________________________________________________ 

Question 1.3.2 – Do you agree with the relative important of these error types?   

  Yes   

 No 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: ______________________ 

Question 1.3.3 – Please describe actions you have taken to prevent such errors ____________________________________________________ 

QUESTION 2 -  PERFORMANCE OF THE EU BUDGET 

In its 2016 Annual report (Chapter 3) the ECA has stressed the importance of the quality of information provided on performance. The Commission intends to 
provide information on the source and quality of data where available. Given that a significant amount of performance data is provided by Member States, the 
Commission wishes to establish to what extent Member States assess information on the quality of performance data at national level in relation to the major 
EU shared management spending areas (common agricultural policy and economic, social and territorial cohesion policy). 

 Question 2.1 – Please describe the main sources of data for the performance indicators you provide to the Commission in the areas of: 

- the common agricultural policy: _______________________________________________________________________________________ 

-  the economic, social and territorial cohesion policy: _______________________________________________________________________ 

Question 2.2 – Please describe how you ensure that the data for the performance indicators you provide to the Commission are of sufficient quality in the 
areas of: 

- the common agricultural policy: _______________________________________________________________________________________ 

- the economic, social and territorial cohesion policy: _______________________________________________________________________ 

 

 

 

 

133 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART A 

Please reply to the general questions below   

QUESTION 3 - FOLLOW-UP OF RECOMMENDATIONS FORMULATED BY THE ECA IN ITS SPECIAL REPORTS 

In paragraphs 3.64 to 3.66 of the 2016 Annual report, the ECA analyses how the Commission has followed up recommendations made in a selection of earlier 
ECA  special  reports.  The  report  also  contains  the  ECA's  appraisal  of  the  progress  of  implementation  of  individual  recommendations  addressed  to  the 
Commission  which  are  outstanding  from  previous  years  (Annexes  6.3  and  7.3).    In  paragraph  3.67,  the  ECA  explains  that  they  were  unable  to  verify 
recommendations which were addressed solely to Member States. 

The ECA can address recommendations to specific Member State(s) or Member States in general. As an  example to the latter, in Recommendation 2a) of 
Special Report No 2/2017 "The Commission’s negotiation of 2014-2020 Partnership Agreements and programmes in Cohesion", the ECA recommended that 
"Member  States  should  provide  to  the  Commission  the  financial  information  necessary  for  the  Commission  to  effectively  monitor  the  compliance  with  the 
thematic concentration requirements (including the derogations set out in the ERDF regulation)". 

Question 3.1 - Do you follow up recommendations addressed by the ECA specifically to your country? 

Yes – if " Yes" please describe how you follow up 
 No – if  "No" please give reasons why you do not follow up 

Reply: ____________________________________________________________________________________________ 

Question 3.2 - Do you follow up recommendations addressed by the ECA to Member States in general? 

Yes – if " Yes" please describe how you follow up 
 No – if  "No" please give reasons why you do not follow up 

Reply: ____________________________________________________________________________________________ 

134 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX III – Member States' replies to Part B of the Questionnaire 

Austria 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

No information. 

Question 1.1 
Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

135 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

Failure to comply with conditions governing assistance and multiannual commitments. 

YES 

NO 

YES 

NO 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Failure to comply with conditions governing assistance and multiannual commitments second and overstated or ineligible area first. 

3.  Non-compliance 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

public 
with 
procurement rules 

4.  Administrative 

error 

Progressive  increase  in  administrative  and  on-the-spot  checks  and  continuous  improvement  of  information  and  advisory  activities 
and use of the possibility of ‘preliminary checks’! 

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Progressive  increase  in  administrative  and  on-the-spot  checks  and  continuous  improvement  of  information  and  advisory  activities 
and use of the possibility of ‘preliminary checks’! 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Article 110 of Regulation (EU) No 1306/2014 established a common monitoring and evaluation framework for the CAP which was 
lent further weight by Regulation (EU) No 834/2014. 2nd column: common performance indicators are used, as laid down in 
Implementing Regulation (EU) No 808/2014. 

- the economic, social and territorial cohesion policy:  

Evaluations from the respective monitoring systems. 

Question 2.2 

- the common agricultural policy:  

137 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
For the monitoring and evaluation of the CAP, the European Commission uses, as far as possible, the information already made 
available to it. To this end, part of the data is compiled on the  basis of information provided. The reliability of this information is 
verified by the administrative authorities. Other data is collected directly from the administrative authorities on the basis of valid 
evaluations. 

- the economic, social and territorial cohesion policy:  
Compilation of performance data in accordance with the relevant European Commission rules and regulations.   

Please  describe  how 
you  ensure  that  the 
the 
for 
data 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply:  ERDF:  implementation  of  follow-up  in  conjunction  with  the  European  Commission;  Agriculture:  recovery  in  respect  of 
financial sampling errors; improvement of administrative procedures and checks;  improvement of systems to determine land area 
(particularly pro rata areas). 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: YES re ERDF: analysis of whether the findings for own programmes are also valid here. For the ESF, relevant 
recommendations are taken into account when preparing national ESF rules. NO re agriculture: formulated in too general a manner 
and, where applicable, already set out in country-specific recommendations. 

YES 

NO 

138 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Belgium 

Question 1.1 
Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
public 
respect 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

Reply from the Walloon Region: Few irregularities were found during controls carried out by the Audit Authority or the European 
Institutions following the measures taken, including in-depth documentary checks on the majority of projects and ex ante checks on 
public procurement. 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Reply from the Walloon Region: Few irregularities were found during controls carried out by the Audit Authority or the European 
Institutions following the measures taken, including in-depth documentary checks on the majority of projects and ex ante checks on 
public procurement. 

YES 

NO 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

139 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

YES 

NO 

YES 

NO 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Reply from ELFPO Vlaanderen (EAFRD Flanders):  4 – 2 -1 – 3 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

140 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

2.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

3.  Administrative 

error 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

Question 1.3.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

YES 

NO 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

Reply from ELGF Vlaanderen (EAGF Flanders): The error rate is low. 

Reply from the Paying Agency for Wallonia (BE03): Constant improvements to the LPIS, improvements to continuous monitoring 
(administrative and on-the-spot), automisation of audit operations, gradual implementation of declarations by electronic means, etc. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
the  performance 
for 
indicators you provide 
to  the  Commission  in 

Reply from Flanders: From IT applications that are used to manage the files (the management and control system) 

- the economic, social and territorial cohesion policy:  

Reply from the Walloon Region: Beneficiaries of the European Structural and Investment Funds for the ERDF Operational 

141 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the areas of: 

Programme, Wallonie-2020.EU 

 

Question 2.2 

- the common agricultural policy:  

Reply from Flanders: The data is obtained directly from the management and control system 

- the economic, social and territorial cohesion policy:  
Reply from the Walloon Region: The indicators are verified by the operational departments responsible for the projects. 

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
in 
ECA 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: Reply from the Walloon Region: If recommendations were issued for the ERDF Operational Programme, Wallonie 2020.EU, 
they would be acted upon as was the case with previous programmes.  Procedure: Inform the entity concerned by memo/email, etc. 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: Reply from the Walloon Region: See point 3.1 above. 

YES 

NO 

142 

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Bulgaria 

Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

Regarding  the  Ministry  of  Regional  Development  and  Public  Works  (MRRB),  the  answer  is  yes,  although  under  the  Operational 
Programme Human Resources Development (OPHRD) deficiencies have solely been identified in the award of public procurement 
contracts by beneficiaries. 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

YES 

NO 

  Ineligible 

1. Serious failures to respect public procurement rules 

project/activities 
or beneficiaries 

2. Ineligible costs included in cost claims 

3. Ineligible project/activities or beneficiaries 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

The Ministry of Labour and Social Policy (MTSP) has developed rules of procedure and put in place internal control systems set out 
in the Manual of the Managing Authority (MA) on the implementation and management of OPHRD 2014-2020. Training events for 
beneficiaries are additionally conducted upon the launch of new grant schemes in order to raise their awareness of the requirements 
for the lawful selection of contractors. In the framework of these training events beneficiaries can ask questions, raise specific issues 
and seek advice on the avoidance of problems frequently encountered in the context of contractor selection procedures. In addition, 
the MA develops and publishes manuals for each grant scheme setting out guidelines for  project implementation to be followed by 

143 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
the beneficiaries. 

In 2016, the Audit of European Union Funds Executive Agency (OSES), in line with the adopted Audit Strategy, focused its work on 
audits of operations and systems audits to limit and prevent irregularities and errors in the management of operations implemented 
under the European Structural and Investment Funds (ESIF).  

The EU Funds Audit Manual for the programming period 2014-2020 has been updated. The manual sets out a detailed description of 
the  rules,  policies  and  procedures  to  be  applied  to  ensure  a  high  standard  of  work  of  the  Audit  Authority.  The  Manual  has  been 
developed on the basis of applicable Regulations, the European Commission guidelines for the programming period 2014-2020, the 
requirements laid down in national law and the professional standards and good practices relevant to the work of the Audit Authority. 
The  updated  manual  reflects  the  methodological  knowledge  and  practical  experience  gained  by  the  Audit  Authority  during  the 
programming period 2007-2013. 

The Audit Authority follows an approach based on that applied by the European Commission. It publishes an annual report, which 
sets out an analysis of the irregularities in the area of public procurement, a summary of the infringements encountered by the Audit 
Authority  and  guidance  on  their  avoidance.  These  documents  serve  as  the  basis  for  taking  appropriate  corrective  action  by 
beneficiaries  in  conducting  calls  for  the  award  of  public  procurement  contracts,  respectively  by  the  Certifying  Authorities  in  the 
performance of their functions to ensure that only expenditure that satisfies the requirements for legality and eligibility is verified and 
certified.  

With a view to enhancing its preventive role, the Audit Authority has additionally stepped up its efforts in two areas — conducting 
training events to share its experience with regard to the common types of deficiencies and errors identified and to raise awareness of 
the audit methodology used among all stakeholders of the system for the management and control of EU funds. In connection with 
this, in 2016 the Audit Authority conducted 12 training events for 444 representatives of the MA and the beneficiaries with a view to 
sharing good practices, ensuring better implementation of the rules for the award of public procurement contracts and exchanging 
experience on identified errors in the application of public procurement legislation.  

All checklists used by the Audit Authority to perform audits of operations and systems audits are publicly available on its website. 
The checklists used to perform checks on public procurement procedures have been developed by the Audit Authority. They have 
been shared with all parties concerned in the management and control of EU funds and are used by the Managing Authorities and 
Certifying  Authorities  during  the  course  of  performing  their  functions  relating  to  expenditure  incurred  under  public  procurement 
contracts. This ensures that the checks conducted to  verify the legality of public procurement  expenditure are based  on a uniform 
approach. 

Ministry of Economy (MI) With a view to preventing this and other types of errors, during the course of project implementation the 
MA  assists  beneficiaries,  including  through  the  established  practice  of  conducting  training  events  at  the  time  of  concluding  grant 
agreements. During the training events the project implementation process is explained step by step and specific questions, including 
issues relating to the avoidance of frequently encountered problems, are discussed. The MA additionally publishes a Manual on the 

144 

 
 
 
implementation of co-financed projects to help beneficiaries avoid errors and lower the rate of ineligible expenditure. The MA also 
conducts ex-ante controls prior to publishing calls for proposals and the stage of contractor selection with the aim of minimising the 
infringements of contractor selection rules. The practices mentioned above have been carried over to the new programming period 
2014-2020.  

The  MA  has  thus  minimised  the  risk  of  inclusion  of  ineligible  expenditure  in  the  certification  reports  submitted  to  the  Certifying 
Authority, respectively the applications for payment submitted to the European Commission. 

The Directorate-General for Strategic Planning and Regional Development Programmes (GDSPPRR) of the MRRB, in the capacity 
as  designated  Managing  Authority  of  Operational  Programme  Regional  Development  (OPRD)  2007-2013  and  Operational 
Programme Regions in Growth (OPRG) 2014-2020, takes a number of measures to prevent the errors described within the remit of 
its competence as defined in EU and national law, as follows: 

The  MA  of  OP  Regions  in  Growth  2014-2020  has  introduced  controls  for  the  exclusion  of  expenditure  from  interim  certification 
reports submitted to the Certifying Authority, when such expenditure is subject to ongoing checks conducted to verify its legality and 
regularity and a conclusion is still pending. Checks are conducted to verify the eligibility of verified expenditure included in each 
application  for  payment  included  in  interim  certification  reports.  Further  checks  are  conducted  to  ascertain  any  recently  reported 
irregularities in order to modify the respective amounts of ineligible expenditure following the closure of reported irregularities and 
performing  a  check  to  ascertain  any  unlawfully  paid  amounts.  All  identified  ineligible  expenditure  is  excluded  from  certification 
reports. The approach followed by the MA of the OPRG ensures that certification reports contain solely expenditure that has been 
legally incurred. The Certifying Authority also excludes such expenditure from both current applications for payment submitted to 
the European Commission and from certified expenditure included in the annual financial statements.  

In addition, the GDSPPRR: 

- participates in consultations and procedures for the submission of proposals and recommendations in the context of the adoption of 
new laws and bylaws within its area of competence; 

- makes efforts to strengthen and improve its administrative capacity through training events  conducted on a regular basis in areas, 
such as recently adopted legislation within its remit of competence relating to the protection of the financial interests of the EU, the 
prevention and fight against fraud and irregularities, etc.; 

- participates in the Council on the coordination of the fight against infringements with implications for the financial interests of the 
EU and performs the tasks within its remit of competence relating to the implementation of the Action Plan to the National Strategy 
for the prevention and the fight against irregularities and fraud with implications for the financial interests of the EU for the  period 
2014-2020 within the framework of the Council; 

- cooperates with other institutions in the performance of tasks within its remit of competence; 

-  administers  reported  irregularities  and,  where  infringements  that  conform  to  the  definition  of  an  irregularity  are  ascertained, 
determines the financial corrections to be applied to beneficiaries under the OPRG; 

145 

 
 
-  conducts  information  campaigns  and  training  events  for  beneficiaries  on  a  regular  basis  in  areas  relating  to  the  award  of  public 
procurement contracts; 

- maintains web pages to enable the reporting of irregularities and fraud with implications for the financial interests of the EU; 

- keeps registers of reported irregularities and fraud within the Directorate; 

-  conducts  information  campaigns  to  raise  public  awareness  of  the  mechanisms  for  reporting  irregularities;  -  clarifies  and  raises 
awareness of the terms ‘irregularity’ and ‘suspected irregularity’; 

- uses the MMIS 2020 electronic system and the ARACHNE system for the prevention of irregularities. 

The  MA  of  OPRG  has  introduced  and  uses  the  fraud  risk  assessment  tool  annexed  to  the  Guidance  to  Member  States  on  the 
procedure  for  the  designation  of  bodies  responsible  for  programmes  financed  by  the  EU  (EGESIF_14-00-21-00  of  16 June 2014). 
The application of the tool and the controls put in place at system level aim to identify specific situations that may arise  during the 
course  of  implementation  of  operations  that  trigger  certain  fraud  alerts  and  to  anticipate  and  take  appropriate  and  proportionate 
measures to improve the management and control system put in place in the context of the anti-fraud policy pursued by the MA of 
OPRG.  In  connection  with  the  audit  findings  of  the  Audit  Authority  and  the  Certifying  Authority,  the  Procedures  manual  for  the 
management and implementation of Operational Programme Regions in Growth 2014-2020 has been updated by including additional 
controls  to  achieve  compliance  with  the  rules,  policies  and  procedures  applied  in  order  to  ensure  that  the  work  of  the  Managing 
Authority conforms to a high quality standard. 

In  order  to  preclude  the  verification  of  ineligible  expenditure  monitoring  is  performed  to  ensure  the  efficient  and  effective 
disbursement of funds under concluded grant agreements. 

On-the-spot  checks  are  also  performed  on  100 %  of  the  original  invoices  and  receipts  and  to  verify  the  progress  achieved  in  the 
physical implementation of works. On-the-spot checks are planned on an annual basis, with unannounced checks being performed as 
necessary, for example at the time of receipt of requests for payment, in order to verify the absence of double financing, etc. During 
the  course  of  checks  conducted  to  ascertain  the  physical  progress  of  works,  compliance  between  the  quantities  and  works  agreed, 
those detailed in the dedicated reports and works acceptance certificates, and the actual volume of works performed is verified by 
making measurements under individual lots.  

The  beneficiaries  are  required  to  make  appropriate  organisational  arrangements  for  record-keeping  to  ensure  that  all  requisite 
documents are available during conducted checks, that is to ensure that there is an adequate audit trail. In addition, during the course 
of  checks  and  verifications  performed  on  reported  expenditure  under  engineering  works  contracts,  detailed  checks  to  ascertain 
ineligible activities are performed on the basis of dedicated checklists and approved procedures. Any detected ineligible works are 
subsequently excluded from verification. 

The Territorial Cooperation Management (UTC) Directorate of the MRRB 

- 

conducts sample-based checks on the work performed by external controllers responsible for conducting first-level controls; 

146 

 
 
- 

- 

organises annual meetings with the beneficiaries and controllers to present and discuss the most frequently encountered types of 
errors in conducting calls for the award of public procurement contracts; 

the beneficiaries are required to sign statements acknowledging their familiarity with the concepts of ‘irregularity’ and ‘fraud’ 
before  the  signing  of  grant  agreements  under  the  programmes  that  we  manage  in  the  capacity  of  Managing  Authority  and, 
respectively, agreements concluded with regard to national co-financing under the programmes that we manage in the capacity 
of National Authority. 

MTITS 

-  The following action has been taken to address the three types of errors: streamlining the management and control systems of 
the Managing Authority and the Procedures manual, including by expanding existing checklists with new types of checks. 
Some changes have been introduced on the basis of findings from European Commission missions and audits performed by 
the  ECA,  the  Audit  Authority,  the  Certifying  Authority  and  the  Internal  Audit  Unit.  Other  actions  have  been  taken  on  an 
initiative of the Managing Authority.  

- 

- 

Identified deficiencies in the award of public procurement contracts and errors in the work of the Managing Authority are 
addressed by organising meetings and training events for experts from the Managing Authority and beneficiaries.  

In  addition,  the  ineligible  activities  identified  under  individual  projects  are  modified  at  the  earliest  possible  stage  of 
submission of project proposal for financing.  

-  The  Managing  Authority  also  conducts  meetings  with  the  beneficiaries  on  a  regular  basis  to  discuss  problems  and 

deficiencies that may arise.   

National Fund (NF)  

Programming period 2007-2013: 

1.  In 2016, for the purpose of expenditure certification, the CA performed a number of controls, including full documentary 
checks on the information received from the MA about operational programmes in connection with verified expenditure 
submitted  for  certification  in  the  same  year,  along  with  on-the-spot  checks  on  the  MA,  IB  and  beneficiaries.  In  many 
cases,  the  CA  delayed  the  certification  of  specific  items  of  expenditure  incurred  to  the  European  Commission  until 
adequate corrective action was taken by the MA and/or financial corrections were applied, as appropriate. In cases where 
the CA was unable to obtain sufficient assurance in respect of the eligibility of incurred expenditure, the respective item 
was excluded from the declaration of expenditure submitted to the European Commission to lower the risk of declaring 
ineligible expenditure.  

2.  In 2016, the Certifying Authority continued to actively facilitate and support the work of the bodies responsible for the 
successful  completion  of  the  2007-2013  programming  period.  To  ensure  better  coordination  of  the  activities  and 
responsibilities  relating  to  the  winding  up  of  the  operational  programmes  co-financed  by  the  Structural  Funds  and  the 
Cohesion Fund for the programming period 2007-2013, the CA organised working meetings with representatives of the 

147 

 
 
MA, the Audit Authority and the Central Coordination Unit (CCU). In addition to the Guidelines on the winding up of 
operational  programmes  published  by  the  Minister  for  Finance,  methodological  support  was  provided  on  an  ongoing 
basis to the MA, IB and the beneficiaries. In connection with the start of preparations to wind up operational programmes 
for  cross-border  cooperation  along  the  external  borders  of  the  EU  Bulgaria  participates  in,  which  are  financed  by  the 
Instrument for Pre-accession Assistance during the programming period 2007-2013, the CA developed Guidelines of the 
Minister of Finance on the winding-up of bilateral programmes for cross-border cooperation along the external border of 
the European Union, implemented between the Republic of Bulgaria and the Former Yugoslav Republic of Macedonia, 
the Republic of Serbia and the Republic of Turkey during the programming period 2007-2013.  

National Fund (NF) 

Programming period 2014-2020: 

1.  On  25 July  2016,  Regulation  No N-3  of  the  Minister  for  Finance  of  8 July 2016  laying  down  the  rules  for  payment, 
verification and certification of expenditure, recovery and write-off of irregular expenditure and accounting, as well as 
the terms and rules of completion of end-of-year accounts under the operational programmes and the European territorial 
cooperation programmes, drawn up by the Certifying Authority pursuant to Article 7(4) of the Management of European 
Structural  and  Investment  Funds  Act  and  governing  the  relationships  between  units  responsible  for  management  and 
control,  entered  into  force.  The  CA  continued  to  develop  and  provide,  on  an  ongoing  basis  and  whenever  necessary, 
additional guidance with a view to precluding identical errors and facilitating the work of the bodies concerned in the 
management and control of EU funds under the respective programmes. 

2.  The  CA  conducts  checks  to  verify  the  legality  and  regularity  of  the  expenditure  verified  by  the  MA  before  the 
submission of applications for payment to the European Commission as a preventive measure with the aim of precluding 
the declaration of irregular expenditure to the Commission. As an additional control, the CA performs checks to verify 
the standard of work of the MA, along with checks on the premises of the beneficiaries and project implementation sites. 
The Managing Authority reports to the CA on the progress made in the achievement of results on the basis of conducted 
management checks, the annual plans for on-the-spot checks, procedures manuals, etc., which are subject to mandatory 
review and analysis by the CA.  

3.  In  line  with  Decree  No 189/2016  laying  down  the  national  rules  on  the  eligibility  of  expenditure  incurred  under 
programmes financed by the European Structural and Investment Funds for the programming period 2014-2020 and with 
a  view  to  lowering  the  administrative  burden  on  beneficiaries,  simplifying  the  reporting  process  and  improving  the 
quality of the reporting documents submitted to the MA by beneficiaries a number of steps were taken to simplify the 
rules governing expenditure under the respective operational programmes in accordance with Article 55(1), (2) and (4) of 
the ESIF Assistance Management Act. We are not yet able to report any results attributable to the implementation of the 
new rules but will give the matter our full attention during the process of certifying expenditure and conducting controls 
in line with the established procedures of the CA.  

4.  During the 2014-2020 programming period financial assistance will be granted through a variety of financial instruments 

148 

 
 
under  operational  programmes  Human  Resources  Development,  Innovation  and  Competitiveness,  Regions  in  Growth 
and Environment. On the basis of preliminary assessments and the experience gained in the use of financial engineering 
instruments  during  the  programming  period  2007-2013,  a  unit  responsible  for  the  management  of  the  financial 
instruments  was  created  by  establishing  a  Fund  of  Funds  pursuant  to  Article 38(4)(b)(a)  of  Regulation  (EU) 
No 1303/2013 of the European Parliament and of the Council of 17 December 2013, responsible for the management of 
financial  instruments  during  the  programming  period  2014-2020  and  for  some  of  the  instruments  used  during  the 
programming period 2007-2013. 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

MZH+DFZ The following action has been taken to address finding 23-BG-1-1-М121 set out in Letter Ref. No PF 8171: Regulation 
No  8  of 3  April 2008 was amended to modify the definition of ‘user’, which became effective  on 18 May 2010. The amendment 
concerned the method of conducting the checks. No checks to ascertain the existence of related undertakings within the meaning of 
the Small and Medium Sized Enterprises Act were conducted on projects financed prior to that date. 

149 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

MZH+DFZ The ECA has withdrawn finding 16P1251 set out in Report PF8239 received by Letter CH 1093013BG01-17PP-ARPF-
8239-DAS16-BG-Transactions_EAGF-(JD)(dc)(ms)-TR.docx. With regard to finding 16P1252 set out in Report PF8239, the error 
amount  ascertained  by  ECA  auditors  is  0.15  %,  which  according  to  the  auditors  demonstrates  a  relatively  low  risk  regarding  the 
accuracy of eligible areas and the reliability of annually reported data in control statistics. The following actions have been taken: 
additional training has been conducted and the internal rules of procedure have been modified. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
the  performance 
for 
indicators you provide 
to  the  Commission  in 
the areas of: 

MZH+DFZ The Integrated Administration and Control System (IACS) 

- the economic, social and territorial cohesion policy:  

GDSPPRR of the MRRB The main sources of data are the documents entered into the MMIS 2020 in connection with payment 
requests and on-the-spot checks. 

Territorial Cooperation Management Directorate (UTC) of the MRRB The main sources of data are the electronic systems for the 
management of the individual operational programmes (MIS) and the electronic accounting system (SAP). 

150 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
__________________________________________________________________ 

NF Regarding performance indicators, the Certifying Authority monitors on an ongoing basis the information provided within the 
framework of the Monitoring Committees of Operational Programmes and set out in the respective reports on the progress of 
programme implementation sent to the European Commission, conducts analyses of the reports of the Managing Authorities on 
progress achieved in implementation drawn up on the basis of conducted management verifications, participates in the monthly 
meetings with beneficiaries organised by some of the Managing Authorities to review the progress achieved in project 
implementation and conducts reviews of the corresponding progress reports on a regular basis. In addition, the Certifying Authority 
conducts analyses of the achievement of financial indicators at programme level and monitors the rate of disbursement of national 
funds under each operational programme with a view to precluding loss of funds under the rule for the automatic decommitment of 
funds. 

MI The main source of data about the performance indicators for the individual projects are the final technical reports submitted by 
beneficiaries. The model final technical reports contain a dedicated section in which beneficiaries must indicate the actual values of 
the relevant performance indicators as at project completion date. The performance indicators in question are specified in the grant 
agreements and correspond to those set out in the respective operational programme. 

In order to compile a summary of some of the data for the programming period 2007-2013, the MA used the computerised 
Management and Monitoring Information System (MMIS).  

The main source of data about the performance indicators for the programming period 2014-2020, which the Managing Authority of 
OP Innovation and Competitiveness uses to report the progress achieved in programme and project implementation, include:  

1. Statistical surveys conducted by the National Statistical Institute and provided to the MA at intervals that take into account the data 
reporting periods specified by the NSI in respect of the output indicators specified in the Operational Programme Innovation and 
Competitiveness (OPIC) 2014-2020; 

2. SME Performance Review, European Commission instrument to assess the progress achieved in implementing the Small Business 
Act (SBA Fact Sheets);  

3. Management, Monitoring and Information System for ESIF (MMIS 2020) — provides aggregated information to beneficiaries 
about performance indicators. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 

MZH+DFZ The developed IACS module conforms with the requirements laid down in COMMISSION DELEGATED 
REGULATION (EU) No 907/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament 
and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use 
of euro. 

- the economic, social and territorial cohesion policy:  

151 

 
 
of  sufficient  quality  in 
the areas of: 

 MTSP The information set out in the reporting forms submitted by beneficiaries is checked and verified by the MA to prevent the 
inclusion of ineligible expenditure incurred in relation to certain parties or activities in the declaration of expenditure. The Managing 
Authority conducts documentary checks on all requests for payment (advance, interim and final) submitted by the beneficiaries. The 
checks are conducted in compliance with EU and national law, and in particular the requirements laid down in Chapter 5 of the 
Management of the ESIF Assistance Act (ZUSESIF) and the Procedures manual of the MA. The scope of the check covers the entire 
package of reporting documents, including ESF micro-data. The checks are conducted by two experts (technical and financial) and 
finalised by completing a dedicated checklist. The checklist contains a special text box, which must be ticked to verify the entry of 
micro-data in table format in line with Article 125(2) of Regulation (EU) No 1303/2013. The checklists are scanned and uploaded 
into the relevant section of the MMIS 2020.  
The MA conducts on-the-spot checks in accordance with the requirements laid down in the Manual. On-the-spot checks may be 
planned and unannounced. The responsible experts who conducted the check must complete a dedicated checklist. Where omissions 
or deficiencies are ascertained, the experts issue recommendations for corrective action to be taken by the respective beneficiary. On 
the basis of these recommendations the MA experts follow-up on their implementation during subsequent checks or at the time of 
submission of payment requests. The checklist is entered into the relevant section of the MMIS 2020. 

MI The quality of performance indicators is ensured through the implementation of a dedicated procedure set out in the Manual of 
the MA as an element of the verification process. In parallel to the entry of information about the performance indicators achieved in 
the MMIS, the MA keeps and updates on a regular basis a single performance indicator database (in Excel) at grant agreement / calls 
/ priority axis / operational programme level, which contains information about performance indicators under Operational 
Programme Development of the Competitiveness of the Bulgarian Economy (OPDCBE). The performance indicator database is used 
to monitor the progress made in progress implementation vis-a-vis the indicators set in advance throughout the period of project 
implementation. It is also an appropriate tool used to draw up various reports and summaries, including the Annual/Final report on 
OPDCBE implementation. In order to ensure data accuracy and completeness, the entry and update of performance indicators values 
in the database is handled by experts determined by an express order issued by the Head of the Managing Authority. As an element 
of the process of verification of each final report and before making a final payment, a dedicated check is performed to verify that the 
respective final report contains information about the performance indicators set in advance and achieved. The check is conducted by 
two experts and the data is entered into a dedicated model form and communicated to the designated officials specified in the above-
mentioned order of the Head of the MA. The officials in question enter the information in the database used to draw up summary 
reports and reference documents (per call, axis, indicator, year, gender, type of enterprise, etc.). 
These procedures were carried over to the new programming period, taking on board the lessons learned during the programming 
period 2007 2013. 
In order to ensure that performance indicators reported in respect of the OPIC 2014-2020 are truthful, verifiable and comparable, the 

152 

 
 
  
indicator values reported by beneficiaries are verified by two experts from the MA responsible for conducting the relevant checks on 
the project reports submitted by beneficiaries. The checks are conducted at the time of verification of each final report and before 
making a final payment, allowing for final performance indicators values to be summarised and properly taken into account. In view 
of the completion of all project activities, performance indicator values may not be subsequently changed or modified. The latter 
ensures the availability of the information provided by the beneficiaries and the aggregation of the actual values of the performance 
indicators achieved. 
In parallel to the entry of information about the performance indicators achieved in the MMIS 2020, the MA keeps and updates on a 
regular basis a single performance indicator database (in Excel) at grant agreement / call / priority axis / operational programme 
level. 

The parallel processes of verifying performance indicator data entered into the MMIS 2020 and into the dedicated database reduces 
to a minimum the risk of inaccuracies that may raise doubts as to the full and truthful reporting of indicator values. This is so because 
verification can take place at more than one level, minimising the risk of entry of inaccurate data. Thus, the risk of the performance 
indicator data available to the MA being untruthful and/or not being up-to-date as at the date on which it is needed is reduced to a 
minimum. This also helps to overcome obstacles that may arise in subsequent stages of the overall process of management and 
control of the OPC, notably reporting and evaluation. 

GDSPPRR of the MRRB has drawn up guidance on the types of documents justifying expenditure required for each activity to be 
implemented under the projects. With regard to reimbursable expenditure claimed by the beneficiaries, the MA of the OPRG is 
currently conducting administrative (documentary) and on-the-spot checks. In some cases the information provided by beneficiaries 
is insufficient. Therefore, to obtain full assurance that the verified expenditure is eligible, the MA of the OPRG may need to request 
additional information and documents. In certain cases it may be necessary to perform on-the-spot checks, including 100 % 
documentary and physical checks on the progress achieved in contract implementation. The entire process of verification is 
documented in the MMIS 2020. In the context of the above, the MA of OPRG has introduced administrative controls and on-the-spot 
checks to ensure that the reported activities were carried out efficiently in terms of both quality and quantity of the works performed. 
The annual report on programme implementation takes into account the values of the programme indicators achieved, reported under 
individual projects and verified by the MA of the OPRG. 
A public procurement call for conducting an interim assessment of the OPRG has been launched and one of the tasks as per the terms 
of reference is reporting on progress in achieving performance indicators. 
The work of the Directorate Management of Cross-border Cooperation of the MRRB designated MA of Cross-border Cooperation 
Programmes, is based on Manuals for each programme, setting out strict rules for financial management and control. The financial 
management and control system must be accredited by the Audit Authority. The information submitted by project partners is 

153 

 
 
 
 
Question 3 

Follow-up 
recommendations 
formulated 
by 
in 
ECA 
Reports 

the 
its  Special 

uploaded to the MIS and checked by the Joint Secretariats to the MA by means of conducting on-the-spot checks. 

NF In accordance with Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013, a 2019 
review of programme implementation in each Member State must be conducted against the implementation framework set out in the 
respective programme. In connection with this, during the first half of 2017 the Certifying Authority conducted quality checks on the 
Managing Authorities of the Operational programmes for the period 2014-2020, which included checks on the rules and procedures 
put in place and the time frames in which the MA must ascertain the achievement of the performance indicators under the operational 
programmes. As a result, findings and recommendations have been given to ensure better risk assessment and management and better 
reporting during the interim stages of programme implementation. 

of 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: MI The ECA audit report on assignment 16CH2SOA with reference number PF  – 7844 (Statement of Assurance, SOA) for 
2016 in respect of Operational Programme No 2007BG161PO003 Development of the Competitiveness of the Bulgarian Economy 
2007-2013 contains only preliminary findings. To date, no final conclusions have been received from the European Court of Auditors 
in this regard. For this reason, the MA has focused its work on obtaining and providing additional information and data to draw the 
final conclusions. 

With regard to financial instruments: The ECA’s final report on the audit performed on financial instruments for the purpose of the 
Statement  of  assurance  for  2016  (DAS  2016)  under  Operational  Programme  Development  and  Competitiveness  of  the  Bulgarian 
Economy takes into account the information provided by the MA following the receipt of the preliminary findings and all findings 
have been closed.  

MZH+ DFZ The cited ECA reports are inapplicable to CAP 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

154 

 
 
 
 
 
 
 
 
 
 
 
Reply: MI With regard to Recommendation 2a set out in EVCA Special Report No 2/2017, it should be noted that the necessary 
financial information is provided via the annual reports on the implementation of the respective operational programmes, which the 
Member States draw up and submit for approval to the European Commission. In addition, it should be noted that compliance with 
the requirements for the allocation of funds to thematic objectives at national level is also monitored in the framework of 
implementation of the Partnership Agreement concluded with Bulgaria and that the relevant information and data is set out in the two 
reports on progress achieved in the implementation of the Agreement to be drawn up and submitted to the European Commission 
during the programming period 2014-2020. 

155 

 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Croatia 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

As  part  of  the  Common  National  Rules  (CNR)  No  3  for  the  Competitiveness  and  Cohesion  2014-2020  operational  programme 
(CCOP),  which  apply  as  of  9  June  2017,  additional  checks  by  the  MA  have  been  introduced  (to  complement  the  MA’s  existing 
system  level  checks,  i.e.  administrative  and  on-the  spot  checks  of  IBs)  before  a  payment  request  is  submitted  to  the  European 
Commission. The aim of system-level checks is to inspect the correctness and legality of expenditure to be reported to the European 
Commission.  Furthermore,  in  accordance  with  CNR  No  3,  the  CA  conducts  administrative  and  on-the-spot  checks  for  each 
declaration  of  expenditure.  As  part  of  an  administrative  check  the  declaration  of  expenditure  and  any  background  documents  are 
checked for completeness and compliance with formal requirements, i.e. whether all the data has been presented correctly and taken 
into account. In addition, the CAFA is required to carry out ex-ante controls of public procurement procedures launched under the 
‘Competitiveness and Cohesion’ and ‘Efficient HR’ operational programmes. The MA under the CCOP has also laid down criteria to 
be taken into account by the CAFA when conducting checks. Instructions regarding these criteria were issued on 31 March 2017 and 
the  criteria  were  integrated  in  the  new  version  of  the  CNR.  In  order  to  further  reduce  the  number  of  irregularities  in  public 
procurement,  the  MA  set  up  a  Network  of  public  procurement  coordinators  and  a  Network  for  managing  irregularities,  which 
comprises  all  the  relevant  bodies  of  the  management  and  control  system.  Meetings  are  held  once  every  three  months.  At  the 
meetings, the bodies of the management and control system take note of all the legislative changes and updated procedures relevant 
to ESI  funds. With a view to preventing irregularities committed  by beneficiaries the MA is drawing up an  overview of the  most 

156 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
frequently occurring irregularities; the document is public and accessible at www.strukturnifondovi.hr. 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

There  are  workshops  at  which  beneficiaries  can  learn  about  eligibility  requirements  for  support  and  their  obligations.  We  are 
currently  developing  application  forms  with  drop-down  menus  to  minimise  error  occurrence  in  declaring  expenditure/investment 
amounts. We have developed an online Q&A system, which is legally binding and subject to the six-eyes principle in order to ensure 
the consistency of replies. with regard to administrative errors, improvements have been made to the coordination and monitoring of 
the work of regional offices, training has been stepped up and the samples of applications screened by the central office are larger. 

157 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Information  campaigns  are  being  organised  at  which  beneficiaries  can  learn  about  eligibility  requirements  for  support  and  their 
obligations. 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

- the economic, social and territorial cohesion policy:  

The main sources of data for the Competitiveness and Cohesion OP are the Integrated information management system for EFI funds 
(ESIF MIS) and the online register of contracts concluded under the CCOP. Data are also sourced from quarterly implementation 
reports drawn up by IBs of the 1a level; these reports are simultaneously used as control mechanisms for checking that data have 
been entered correctly in the two abovementioned data sources. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 

158 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

- the economic, social and territorial cohesion policy:  
When the CCOP was launched, the MA produced an annual financial plan that lay down the critical levels for resources that must be 
certified in order to avoid automatic decommitment , as well as target levels set somewhat higher than the critical ones. With a view 
to avoiding automatic deommitment, level-1 IBs draw up annual implementation forecasts laying down targets in terms of setting, 
paying and approving costs at operation level and in terms of the level of attainment of physical indicators in a three-year period. The 
MA uses the implementation forecasts to draw up an annual schedule of commitments laying down (for each level-1 IB) targets in 
terms of setting, paying and approving quarterly costs and in terms of the level of attainment of physical indicators in a year; 
implementation of the schedule is monitored quarterly, while IBs have to provide justification for any departures from the schedule. 
At the same time, quarterly reporting serves as a mechanism for monitoring the correctness of the financial and physical indicators 
listed in the ESIF MIS and the online register of contracts,  

After significant departures from the schedule were identified in 2017 (Q1 and Q2) reports on the implementation of the annual 
schedule of commitments, the schedule was updated in mid-2017. On the basis of the updated values, two forecasts were produced: 
one for attaining the goals under the ERDF and CF in year n+3 and another for achieving performance targets. After the annual 
schedule of commitments was updated, it became clear that the n+3 goal under the CF might not be attained. As a result, the MA set 
up a working group at officials’ level tasked with monitoring the attainment of that goal. The working group also monitors the cost 
approval and proposes solutions for stepping up project implementation and cost approval/ Since the performance targets are also at 
risk of being missed, the MA informed level-1 IBs of these risks, asking the IBs to lay down measures for accelerating the 
preparation and implementation of projects in order to facilitate the achievement of these targets. 

The MA has also updated forms for indicators by adding instructions on the correct and uniform interpretation and recording of 
indicators. The MA regularly oversees the application of the instructions and checks that indicators have been entered correctly in 
ESIF MIS and the register of contracts, particularly when drawing up quarterly reports. 

of 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: We have received no report from the ECA on the ‘Regional Competitiveness 2007-2013’ and ‘Competitiveness and Cohesion 
2014-2020’ OPs and therefore cannot follow up on the recommendations. 

159 

Question 3 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

 
 
 
 
 
 
 
 
YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: 

In accordance with CNR No 3, one of the main measures available to the MA under the Competitiveness and Cohesion 2014-2020 
OP for fighting irregularity and fraud is the regular monitoring of the website and the publication of the ECA report on irregularities, 
fraud and corruption against the EU budget. A summary of relevant data and documents published on the website (strategies, reports, 
presentations, brochures, lists of cases handled) is submitted at least twice a year. 

160 

 
 
 
 
 
 
 
 
 
Cyprus 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

161 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

YES 

NO 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

1) Implementation and control of procedures for concluding public procurement contracts as part of our Manuals of Procedures, 
2) 100 % on-the-spot controls for investment measures and in situ controls on actions implemented, 
3) Evaluation Committees, standard costing lists and simplified costs. 
4) Ongoing informing of applicants 
5)  Implementation  of  a  geospatial  application  for  all  applications  in  the  context  of  the  single  application  for  area-based  subsidies 
from 2015 
6) Cross-checks with other state records 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

3.  Administrative 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

162 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
error 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

1) Application and control of Implementation Manuals and updating of those manuals if necessary, 

2) 100 % on-the-spot controls for investment measures, 

3) Evaluation Committees, standard costing lists and simplified costs.  

4) Ongoing informing of applicants 

5)  Implementation  of  a  geospatial  application  for  all  applications  in  the  context  of  the  single  application  for  area-based  subsidies 
from 2015 

6) Cross-checks with other state records   

7) Implementation of action plans for corrective measures  

8) Training of inspectors 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

The performance indicators are largely based on the Common Monitoring and Evaluation Framework of the CFP and, if necessary, 
additional indicators are set for each measure/action where these are identified as important for evaluating the successful 
implementation of measures. Data sources are existing databases, data collected on a continuous basis while actions are being 
implemented and other special studies carried out to collect specific indicators. 

- the economic, social and territorial cohesion policy:  

The Statistical Service of Cyprus, EUROSTAT, Intermediate Bodies, IT System for monitoring implementation of the Operational 
Programmes 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 

Continuous efforts are made to improve the system for collecting the performance indicators through specific studies and 
evaluations, and ongoing further training in monitoring for the departments involved. The contribution of the European Evaluation 
Helpdesk for Rural Development is particularly important and helpful. Measures to assure the quality of the performance indicators 
are largely financed from the Technical Assistance of the Rural Development Programme. 

163 

 
 
 
 
 
 
of  sufficient  quality  in 
the areas of: 

- the economic, social and territorial cohesion policy:  
 the data sources used are reliable. For the result indicators of the Programmes, the data used come almost entirely from the 
Statistical Service of Cyprus and EUROSTAT. For the output indicators, on-the-spot audits and verifications are carried out by the 
Intermediate Bodies (which are government bodies). 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
in 
ECA 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: The recommendations of all the auditors are followed up and duly implemented. 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: The recommendations of all the auditors are followed up and duly implemented. 

YES 

NO 

164 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Czech Republic 

YES 

NO 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

Audit Authority (AA): 

We  agree  with  the  conclusion  that  the  most  common  error  types  are  serious  failure  to  comply  with  public  procurement  rules  and 
ineligible expenditure being included in the statements of expenditure. Analysis of the errors identified in audits of operations in the 
Czech Republic reveal that the most common errors are infringements of public procurement rules and other ineligible expenditure 
(unsubstantiated  expenditure,  expenditure  unrelated  to  the  project  and  expenditure  not  meeting  Rule  3E).  The  implementation  of 
activities  not  included  in  the  project  application  (and  in  the  project  budget)  is  also  a  common  error  that  gives  rise  to  ineligible 
expenditure.  It  is  rare,  on  the  other  hand,  to  find  ineligible  projects  or  beneficiaries  or  the  inclusion  of  ineligible  activities  in  the 
project (in the wrong field or priority axis). 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

AA: 

As regards the above answer we would rank public procurement errors in first place in a table of relative seriousness. In the 2007-
2013 programming period, this error accounted for around 60 % of the total number of errors in terms of frequency and more than 70 
% in terms of financial volume. In second place we would put ineligible expenditure included in the statement of expenditure  and 
thirdly infringements/non-compliance with national or European legislation (e.g. accounting, publicity, archiving). 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

165 

 
 
 
 
 
 
 
 
 
 
 
 
 
National Coordination Authority: 

Regular training courses are held on public procurement, including for applicants/beneficiaries and managing authorities. A database 
of audit findings has been prepared, which currently contains the most significant judgments in the decision-making process in this 
field. Regarding the assessment and selection of operations a set of key criteria has been laid down that must always form part of this 
process. The MA also contacts applicants with a view to discussing suitable criteria; specific training for applicants is also held. To 
reduce the amount of ineligible expenditure, checklists in selected areas have been drawn up. 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

YES 

NO 

YES 

NO 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Providing  for  an  administrative  system  (Farmers’  portal,  LPIS),  pursuing  the  computerisation  of  the  receipt  of  applications,  pre-
printing  of  aid  applications,  cross-referencing  of  information  in  different  registers,  provision  of  information  (legislation,  rules, 
methodological guidelines) in terms of specific calls, training. 

166 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Providing  for  an  administrative  system  (Farmers’  portal,  LPIS),  pursuing  the  computerisation  of  the  receipt  of  applications,  pre-
printing  of  aid  applications,  cross-referencing  of  information  in  different  registers,  provision  of  information  (legislation, 
methodological manual), training. 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Paying Agency Statements on financial closure, reporting of certification, annual report, documentation for annual meetings (ARM). 
The main source of data for these statements is the information system of the SZIF paying agency (specific modules AGIS, SAP 
CRM, EKIS and BW) 

- the economic, social and territorial cohesion policy:  

  The  MS2014+  monitoring  system,  as  the  principal  tool  for  recording  of  all  the  aid  granted  under  the  ESI  Funds  in  the  Czech 
Republic,  IS  VIOLA,  as  the  main  instrument  for  certification  of  expenditure  and  outputs  from  evaluations  carried  out  under  the 
evaluation plan of the Partnership Agreement and individual programme evaluation plans. 

 

167 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 2.2 

- the common agricultural policy:  

Checks of the administration system, cross checks of the paying agency, cross checks of the MA of the Ministry of Agriculture, cross 
checks of the SZIF and the Ministry of Agriculture, cross checks of individual statements of the same date, cross checks relating to 
the previous report, cross checks of reporting for the Partnership Agreement. Four-eye-principle checking at all levels. 

- the economic, social and territorial cohesion policy:  
Regular checks of quality and completeness of the data in MS2014+ are carried out. 

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: For example, an obligation has been introduced for processing the CBA for projects above either CZK 5 million or CZK 100 
million. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: The Czech Republic already provides the Commission – either regularly or on an ad hoc basis – with financial information on 
disbursement, so that the latter can assess compliance with thematic focus. Financial or other information is then used to inform the 
Commission and, for the purposes of any correspondence, conditions or risks in implementing ESI Funds. The process is already in 
place. The Czech Republic itself monitors these data, assesses them and where necessary takes them on board in the management of 
the OP and the Partnership Agreement. 

168 

 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Denmark 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

169 

YES 

NO 

YES 

NO 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

Administrative 
error 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

2.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

For the EAFRD-IACS, as part of the Commission’s plans to identify and address the reasons for high error rates we have, amongst 
other things, simplified the aid schemes, streamlined the rules on penalties, stepped up our efforts to communicate with applicants 
and introduced training for farmers and agricultural advisors. 

For  the  EAFRD  non-IACS,  we  are  working  on  reducing  errors.  For  example,  guidelines  and  instructions  for  case  handlers  are 
regularly updated. As regards the internal lines, we have a steering document providing an overview of the actions to be implemented 
to modify or improve practices in various areas. The tool’s purpose is to follow up on the implementation of the various actions. 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

EAGF – Area: We agree that in general they are the most common types of error, but error types 2 and 3 are rare in Denmark. 

YES 

NO 

Question 1.3.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

YES 

NO 

3.  Administrative 

EAGF – Area: No, error types 1, 3 and 2. 

error 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

170 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EAGF – Area: Increased information provided to farmers. 

EAGF – Project support: Nothing to report. 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

For the EAGF-IACS the Commission is responsible for drawing up performance indicators. 

For the rural development programme where the common performance indicators are used, it is primarily the data underlying the 
processing of applications which are used for calculating the performance indicators. 

- the economic, social and territorial cohesion policy:  

Information from the participating undertakings and persons on the outcome of the projects as well as factual registry data from the 
Danish Statistical Office, including - where possible - comparison with control groups. 

Question 2.2 

- the common agricultural policy:  

For the EAGF-IACS the Commission is responsible for drawing up performance indicators. 

For aid schemes under the rural development programme, the case processing and inspections are carried out in accordance with the 
established procedures. 

- the economic, social and territorial cohesion policy:  
The majority of the ERDF and ESF projects are evaluated by an external assessor. This provides some quality assurance as regards 
the reported impact. The most reliable and objective basis for data is registry data from the Danish Statistical Office which are used 
to monitor developments in the participating undertakings and persons in the slightly longer term, including after the expiry of the 
project period. 

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
by 
formulated 
ECA 

the 
its  Special 

in 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 

171 

 
 
 
 
 
 
 
 
 
Reports 

to your country? 

Reply: Re ERDF/ESF: If the recommendations relate to the ERDF and ESF, the managing authority will follow them up. 

Re EAGF/EAFRD: For reports where Denmark has been a direct part of the audited population, the special reports are always sent to 
the relevant kind-of-activity units, and the recommendations are put on a separate list of recommendations that are used as the basis 
for the paying agency’s ongoing work to give specific follow-up to recommendations from audit authorities. Recommendations are 
not removed from the list until they have been complied with. 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: Re ERDF/ESF: They will be followed up if they are relevant for the implementation of the ERDF and ESF. 

Re EAGF/EAFRD: For reports on subjects that are relevant to Denmark but where it has not been a direct part of the audited 
population, the special reports are sent to the relevant kind-of-activity units for information. 

For reports on subjects that are not relevant to Denmark there is no follow up. 

YES 

NO 

172 

 
 
 
 
 
 
 
 
Estonia 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If  you  do  not  agree,  then  please  indicate  your  perception  of  the  order  of  importance  of  the  most  common  error  types:  Public 
procurement  and state aid  irregularities  tend to have a higher financial impact, thus  they should  be  considered  more relevant  than 
various irregular expenditure that currently is listed as the first option. 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Harmonized highly detailed controls in implementing bodies. 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

Question 1.2.2 – Do you agree with the relative important of these error types? 

YES 

NO 

YES 

NO 

Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

173 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

174 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Data gathered form final beneficiaries and implementing body (paying agency)     

- the economic, social and territorial cohesion policy:  

Data gathered form final beneficiaries and implementing bodies. 

Question 2.2 

- the common agricultural policy:  

Paying Agency and Ministry of Rural Affairs  verify the  data collection procedures to ensure the data quality. 

- the economic, social and territorial cohesion policy:  
The Managing Authority reviews the process and data gathering practices to ensure that right data has been collected. Audit 
Authority has also carried out an system audit on the data gathering. 

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: No specific recommendations, however Management and Control System is continuously improved. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: ECA recommendations have been noted. Management and Control System is continuously improved. 

175 

 
 
 
 
 
 
 
 
 
 
 
 
 
Finland 

Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

As regards error types, we note that on the basis of the annual summary of 30 June 2016, the most common error types in eligibility 
checks of payment applications were: exceeding the accepted budget, the cost is not related to the implementation of the project in 
accordance with the decision, a wrong amount has been claimed for reimbursement, and ineligible costs have been included in the 
wage costs of flat-rate projects. 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

In Finland's Structural Funds programme so far, the error types presented in point 1.1. have been proportionately the most significant. 

YES 

NO 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

The managing authority organises training for the intermediary bodies and discusses matters during guidance and inspection visits. 

176 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

YES 

NO 

YES 

NO 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

A high-quality field parcel register, training of the staff, checklists, electronic checksums. 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

177 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

A high-quality field parcel register, training of the staff, checklists, electronic checksums. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Aid applications, information systems, Natural Resources Finland. 

- the economic, social and territorial cohesion policy:  

For the ERDF, the managing authority collects data on performance indicators from the data produced by the Toimiala Online 
information service and Statistics Finland and then saves them in the EURA 2014 system. For the ESF, the managing authority 
collects data on performance indicators from the data saved by beneficiaries in the ESR Henkilö service and from the data in the final 
reports in EURA 2014.   

178 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 2.2 

- the common agricultural policy:  

Various cross-checks of application data. 

- the economic, social and territorial cohesion policy:  
 The performance indicator data for the ERDF are obtained from official statistical systems. For the ESF, the managing authority 
verifies the quality of the final reports and trains intermediary bodies so that they can guide beneficiaries  as regards the  data to be 
saved in the ESR Henkilö service and the content of the final report. 

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: Systems will be developed in accordance with any recommendations concerning Finland.  

In  February  2017  the  Court  of  Auditors  visited  Finland  to  conduct  a  performance  audit  of  the  Structural  Funds  programme.  The 
initial findings have been discussed for example at training events for intermediary bodies organised by the managing authority. The 
final report should be ready in spring 2018. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: Systems will be developed in accordance with any recommendations concerning aid systems used in Finland.  

As regards recommendation 2a of Special Report No 2/2017, Finland will submit the financing data as required by the Commission. 

The recommendations on economic, social and territorial cohesion in the 2016 audit report do not concern Finland in the 2014-2020 
programming period, because Finland's Structural Funds programme does not cover financial instruments or State aid advances. The 
recommendations for the 2007-2013 programming period were taken into account as appropriate when closing programmes. 

179 

 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

France 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Two decrees have been published, one on the implementation of the programmes co-financed by the ESIF for the period 2014-2020 
(Decree [décret] No 2016-126 of 8 February 2016) and the other laying down rules for eligibility of expenditure co-financed by the 
ESIF (Decree [décret] No 2016-279 of 8 March 2016), together with an order [arrêté] bearing the same date in application thereof, 
amended on 25 January and 12 September 2017. 

Regarding  public  procurement,  Order  [ordonnance]  No  2015-899  of  23  July  2015  on  public  procurement  transposes  Directives 
2014/24/EU and 2014/25/EU of 26 February 2014 into French law in order to bring together in a single body of law the common 
rules applicable to contracts considered to be ‘public procurement’ within the meaning of the EU Directives. The Order entered into 
force on 1 April 2016 with the publication of Decree [décret] No 2016-360 of 25 March 2016 on public procurement. These national 
texts are accompanied by an Order [arrêté] of 29 March 2016 laying down the information and documents which may be requested 
from persons bidding for public contracts, and by a number of notices published in the OJ of 27 March 2016.  

In connection with its duties as cross-fund coordination authority, the General Commission for Territorial Equality (CGET) organises 
exchanges  of  information,  experience  and  good  practices  with  a  view  to  improving  collective  knowledge  and  capacity  to  find 
practical solutions to the difficulties that may be encountered in the daily management of the ESIF. Various tools are made available 

180 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
under this initiative. 

For instance, there is an intranet enabling information to be gathered and shared, and working groups bringing together the parties 
involved in the implementation of the funds are organised on subjects relating to ESIF regulations, management and control.  

In  this  context,  common  model  documents  have  been  developed  for  all  the  parties  implementing  the  funds,  for  instance  the 
investigation  report,  which  includes  a  section  on  beneficiary  eligibility  analysis,  a  section  on  operation  eligibility  analysis  and  a 
section  on  expenditure  analysis  (including  its  eligibility).  The  report  contains  a  specific  annex  on  verification  of  compliance  with 
public procurement rules. Another document made available is the template on service monitoring (first-level checks on expenditure) 
which includes, in particular, operational and expenditure analyses. 

Moreover,  a  training  event  entitled  ‘public  procurement  and  ESIF’  is  being  prepared  for  all  the  parties  implementing  the  ESIF 
(managing authorities, certifying authorities, audit authority and coordinating authorities). The event will be held in 2018. A fiche on 
public procurement and a fiche on eligibility are currently being discussed with the partners implementing the ESIF with a view to 
finalising and sharing them. 

An inventory of the audit findings has begun so that conclusions can be drawn and information shared. 

Lastly, the coordinating authorities are at the disposal of the managing authorities and certifying authorities to answer any questions 
on eligibility and public procurement. 

The answers  to these questions are compiled  in a regularly updated Frequently Asked  Questions page on the Internet so that they 
may be accessed by all partners. 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

181 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

 
 
 
 
 
 
 
 
 
 
 
2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

An EAFRD action plan is deployed in France and monitored by DG AGRI. Its aim is to introduce any necessary corrective action to 
remedy the shortcomings identified by the EU auditors. It is drawn up on the basis of an analysis, shared between the paying agency, 
the  managing  authorities,  the  representatives  of  the  initiating  departments  and  the  Ministry  of  Agriculture,  of  the  findings  and 
appropriate remedial action.  

For instance, in order to reduce errors relating to the eligibility of beneficiaries, activities, projects or expenditure, in particular with 
regard  to  an  earlier  start  to  the  work,  national  rules  have  been  brought  into  line  with  European  requirements.  Under  the  Rural 
Development Regulation 3, the impact of an earlier start is limited to the part of the project with anomalies.  

As regards areas, the Land Parcel Identification System (LPIS) was completely restructured under the EAGF action plan with a view 
to excluding all non agricultural areas. Moreover, pro rata eligibility for low productivity areas was introduced under the CAP 2015 
and resulted in a campaign of rapid visits to verify the selected tranche. 

Verification of compliance with public procurement rules has given rise to work shared between the managing authorities, the paying 
agency and the national authorities aimed at establishing a framework which is then broken down into regional procedures.  

Lastly, a wide range of measures have been taken to limit administrative errors, including action to improve the documentation of 
procedures, adjust the information system (OSIRIS) and train staff in the initiating departments. 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

182 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.  Administrative 

error 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

As regards areas, the Land Parcel Identification System (LPIS) was completely restructured under the EAGF action plan with a view 
to excluding all non agricultural areas. Moreover, pro rata eligibility for low productivity areas was introduced under the CAP 2015 
and resulted in a campaign of rapid visits to verify the selected tranche. 

Checks on the eligibility of area-related aid applicants have been strengthened by the CAP 2017 campaign (addition of inspection 
points  in  administrative  checks  and  on-the-spot  checks)  in  relation  to  checks  on  related  entities  within  the  framework  of  the 
verification of active farmer status. 

Lastly, a wide range of measures have been taken to limit administrative errors, including action to improve the documentation of 
procedures, adjust the information systems (ISIS for area-related aid) and train staff in the initiating departments. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
the  performance 
for 
indicators you provide 
to  the  Commission  in 
the areas of: 

most of the data used by the French authorities and sent, where necessary, to the Commission come from management and payment 
tools such as ISIS and OSIRIS in relation to the first and second pillars of the CAP.  

A resources centre established in 2006 (Rural Development Observatory) is responsible for processing information for the 
assessments. It also serves as a reference for all data processing and output monitoring and may be used to support research projects. 

- the economic, social and territorial cohesion policy:  

The national coordinating authorities do not send information on data for the performance indicators directly to the European 
Commission. This is done by the managing authorities via the annual implementation report. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 

Performance data are verified by administrative checks and on-the-spot checks conducted by the initiating departments. The Rural 
Development Observatory also consolidates data with regard to expenditure declarations and programming time lines, in close 
cooperation with the paying agency. 

- the economic, social and territorial cohesion policy:  
The managing authorities are responsible for the reliability of the data they convey to the European Commission in the annual 
implementation reports via the SFC.  

183 

 
 
 
 
 
 
the areas of: 

The national coordinating authorities support the managing authorities in their work, in particular with regard to data reliability by 
advising the managing authorities on data reliability and security (e.g. memos, workshops, seminars). 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: The Ministry of Agriculture follows up the recommendations addressed to France by the ECA, the European authorities and 
all  the  auditing  bodies  in  general.  To  this  end,  the  Directorate-General  for  the  Economic  and  Environmental  Performance  of 
Companies  (DGPE)  has  appointed  a  team  responsible  for  monitoring  the  audits  of  the  EU  authorities  and  their  follow-up,  i.e. 
remedial measures to address the weaknesses identified. The team is called the Office of Audits and Checks (Bureau des audits et des 
contrôles). 

The Office works with the managing teams to analyse the findings and prepare action plans, and then monitors the implementation of 
these action plans. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: All the recommendations made by the ECA are taken into account in order to ascertain whether the weaknesses identified in 
the other Member States also exist in France. If so, corrective measures are implemented. 

184 

 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Germany 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

ESF: Regular jours fixes with intermediate bodies, targeted guidance using guidelines and training, IT systems to record audit results, 
systematic assessment of audit results and early implementation of any necessary remedial measures 

ERDF-funded 2014-2020 Operational Programmes are implemented exclusively by the Federal Länder. While budgetary autonomy 
is maintained, at the same time the EU funds are managed and controlled autonomously and independently by the individual Federal 
Länder. The Federal Ministry of Economic Affairs and Energy (BMWi) coordinates ERDF activities in the Federal Länder through 
many  working  groups  and  networks  and  constantly  strives  to  ensure  compliance  with  the  law  in  this  sphere.  In  particular, 
interpretation  of  legislative  provisions  and  implementation  issues  are  discussed  at  regular  meetings  with  the  ERDF  managing 
authorities, with the participation of BMWi experts in fields such as public procurement and state aid. 

185 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

YES 

NO 

YES 

NO 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

186 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
the  performance 
for 
indicators you provide 
to  the  Commission  in 
the areas of: 

application data from the Federal Länder 

- the economic, social and territorial cohesion policy:  

ESF: Evaluations, material and financial control 

ERDF: If the term ‘performance indicators’ means all material indicators, the data on nearly all indicators (financial and other 
indicators and milestones) are collected under the responsibility of the competent intermediate body by the beneficiaries or by the 
authorising bodies in the computerised monitoring system. The scope of the data to be supplied is defined in an administrative 
agreement between the Managing Authority and the intermediate bodies. Supplementary documents provide a clear definition of the 
indicators and the data collection requirements (these include in particular MA guidelines and checklists and a manual of indicators). 
Data collection focuses on output indicators (data source: own funding statistics, collection via beneficiary reports), result indicators 
(data source/collection: taken from publications of statistics offices and institutes and other publicly accessible data sources) and 

187 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
financial indicators (data source: own calculation (MA/intermediate bodies)/funding statistics). Where no official statistics are 
available, alternative sources can be used with the Commission’s agreement, such as ministries’ unpublished internal data or own 
collection to create a database. Occasionally the computerised monitoring system ABAKUS is used. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

Through regular coordination at Federal level of the paying agencies of the Länder. 

- the economic, social and territorial cohesion policy:  
ESF: external, independent evaluation, IT-supported checks on timely collection and aggregation of implementation statistics, IT-
supported automated completion and validation checks of hard data 
For the ERDF, the MA conducts regular system checks, which include checks on the procedures for collecting indicators. In 
addition, especially to take account of reporting duties to the Commission, spot checks are carried out on the reliability and validity 
of the indicators. The intermediate bodies are also reminded at regular meetings of the importance of the indicators, particularly as 
regards the performance reserve, and are instructed to attend carefully to the quality of the data too. Furthermore, data quality in the 
system is guaranteed by a differentiated rights system and is regularly enhanced by the ‘two pairs of eyes’ principle. As well as the 
plausibility check when data is entered, further checks are made on the basis of the assessments and reports generated by the IT 
monitoring system. The checks relate both to the quality of the data available in the system and to their proper processing and 
evaluation. Errors detected can be identified and corrected in this way, guaranteeing satisfactory quality. 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: Formal follow-up is being conducted on the findings and recommendations in the Court’s annual and special reports that are 
addressed to Germany as regards EU budget expenditure under shared management. The authorities responsible for the management 
and control of these funds in Germany receive such reports systematically from the competent Federal department for information 
and  follow-up,  meaning  that  the  findings  in  the  reports  are  available  to  all  those  involved  in  the  implementation  and  monitoring 
process. The lead authorities for the management of EU funds decide what follow-up action should be taken within the framework of 
their federal responsibilities.  

188 

 
 
 
 
 
 
 
 
Moreover, there is a regular exchange in the relevant Federation-Länder fora about the most frequent sources of error and remedial 
measures. This includes setting up subject-specific Federation-Länder working parties on ECA findings of a systemic, cross-border 
nature (e.g. working circle of ESIF Audit Authorities on public procurement and state aid). In addition, ECA information is discussed 
at the annual coordination meeting between Commission staff and the German authorities. As a rule these meetings are attended by 
ECA representatives, who back up their recommendations with presentations and question-and-answer rounds. 

The national authorities concerned engage in a systematic and detailed study of the ECA’s audit reports in the run-up to the annual 
report of which these form the basis, and adopt detailed opinions on them. Where appropriate, any necessary financial corrections are 
made. Findings are regularly evaluated in the Managing Authority or Paying Agency to establish whether they relate to one-off cases 
or  are  the  product  of  a  systemic  failure.  Suitable  measures  are  taken  accordingly.  These  may  include,  for  instance,  separate 
workshops, a correction to the audit trail/system description or training for the staff and authorities concerned. 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: The procedures described under 3.1 are also followed in Germany in response to the ECA recommendations addressed to all 
the Member States in general. 

YES 

NO 

189 

 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Question 1.2 

Rural development, 
the environment, 
climate action and 

Greece 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

The  Certifying  Authority  takes  corrective  action  by  deducting  the  expenditure  from  the  payment  claims  or  by  activating  the 
procedure for the reimbursement, where necessary, of the Community contribution. To prevent errors:  

(a) it issues circulars on the drawing-up of payment  claims to the European Commission, highlighting both the horizontal and the 
specific issues per fund that require particular attention so that the claims may be paid safely and the goals set attained, and  

(b) it cooperates with the other national authorities on the issuing of guidelines with a view to minimising errors. 

The Audit Authority has categorised the errors for accounting period 1/07/2015-30/6/2016. The collection of information on error 
types  is  useful  for  the  Audit  Authority  because  it  contributes  to  the  analysis  of  errors  and  their  origin,  the  improvement  of  risk 
analyses and audit strategies, and better targeting of the preventive measures to be proposed to the Managing Authorities. 

YES 

NO 

190 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

YES 

NO 

ineligible area 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

3.  Non-compliance 

with 
public 
procurement rules 

  Development of a Database of Reference Prices for the Cost of Mechanical Equipment and Building Infrastructure in order 
to  determine  the  reasonable  cost  of  investment  operations,  and  comparative  analysis  of  submitted  proposals  during  the 
evaluation, payment and audit of projects. 

4.  Administrative 

error 

  The  data  on  areas  are  finalised  in  the  Single  Farming  Application  IIS  (OPSEAE)  following  computerised  checks,  cross-

checks, administrative and on-the-spot checks. 

  Cross-checks  using  small  IT  systems  to  avoid  double  funding  by  the  responsible  Intermediate  Management  Bodies  and 

checks to detect artificially-created funding situations and the segmentation of public procurement projects. 

  Setting-up of an adequate system for monitoring compliance with the long-term obligations of the beneficiaries and ex post 
checks  to  validate  the  correct  operation  of  the  investment  for  the  period  laid  down  by  the  Regulations.  For  public  works, 
evidence of the beneficiary’s ability to maintain the works should be provided. 

  Measures  to  address  conflict  of  interest  (submission  of  a  declaration  of  non-conflict  of  interest  by  staff  conducting 

administrative checks and by senior staff in positions of responsibility and in auditing units). 

  Comparative Evaluation of Public Works per Call for Proposals using strict selection criteria. 

  Upgrading  and  updating  of the IT Systems  with a view to facilitating  the cross-checking  of data and the  export of results 
when  implementing  actions.  Moreover,  improved  reporting  and  interconnection  with  other  information  systems  (IIS) 
contribute to the provision of more reliable statistics and to the optimisation of statistical analysis in order to more accurately 
identify the main factors responsible for the occurrence of errors with a view to detecting them early and taking corrective 
action to mitigate them. 

191 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

(1) Updating of audit methodology for certain eligibility criteria and updating of the audit guidelines for auditors  

(2) Conduct of additional audits (beyond the minimum audits laid down in the regulations) on certain direct aid schemes. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
the  performance 
for 
 
indicators you provide 
to  the  Commission  in 
the areas of: 

  The  main  sources  of  data  for  the  performance  indicators  submitted  to  the  Commission  are  the  applications  for  support  and  the 
payment applications submitted by the beneficiaries. The data are collected in a central database (Rural Development IIS) which is 
used to generate the tables that are sent to the Commission as part of the annual implementation reports. 

- the economic, social and territorial cohesion policy:  

The main sources of data under the Programmes of the 2014-2020 NSRF that are co-financed by the ERDF and the Cohesion Fund 
are, for result indicators, ELSTAT and bodies of the Hellenic Statistical System, Eurostat, the entities of the central and regional 
administration, chambers and observatories, with some prices to be derived from surveys.  

For output indicators, data sources are the beneficiaries of the acts implementing the included projects with data obtained from the 
project studies. These data are entered in the Integrated Information System of the 2014-2020 NSRF. 

192 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance indicator-related information submitted to the Commission comes from our information system (M.I.S.). 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
the 
for 
data 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

The data on areas/animals supplied by the Single Farming Application IIS (OPSEAE) are finalised following computerised checks, 
cross-checks, administrative and on-the-spot checks. The other indicators (physical and financial object) are verified as part of the 
administrative and on-the-spot checks. 

- the economic, social and territorial cohesion policy:  
As part of the Programmes of the 2014-2020 NSRF, a mechanism has been developed for data quality assurance and statistical 
validation in the 2014-2020 Programmes. The key points of the mechanism have been described in the Single Indicator Monitoring 
System of the 2014-2020 NSRF, which was developed by the National Coordination Authority 
(https://www.espa.gr/elibrary/Eniaio_Systima_Parakolouthisis_Deiktwn_2014-2020_July2017.pdf).  
The Single Indicator Monitoring System for the 2014-2020 Programmes was drawn up with a view to providing an integrated 
response for meeting the requirements of the European Structural and Investment Funds regulations with regard to the indicators of 
the 2014-2020 Programmes. The configuration of the Single Indicator Monitoring System is applicable to all programmes co-
financed by the ERDF, the Cohesion Fund, the ESF and the EMFF. 
The following measures are taken to ensure the quality of the monitoring data: 
• 
• 
• 
• 
• 
to the monitoring system. 
• 
The aim of the mechanism for quality assurance and statistical validation of the data is to ensure the reliability of the data and 
improve the quality of statistical information. The key points of the mechanism are as follows: 

Common approach to implementing indicator definitions and data processing procedures. 
Checks of the reliability, quality and completeness of data indicators. 
Electronic validation of data in the NSRF IIS. 
Support for retroactive corrections. 
Ensuring that there is sufficient staff in the Special Management Service/Intermediate Management Bodies for issues relating 

Possibility of implementing measures pursuant to Articles 28(1) and 54(4) and (5) of  Law 4314/2014. 

-  The memorandum of cooperation between the National Coordination Authority and ELSTAT. 
-  The processing and checking of the definitions and methodologies of the indicators used by administrative sources and 

registers in cooperation with the National Coordination Authority, the Managing Authorities and administrative data sources, 
with a view to data quality assurance.  

-  The mandatory completion of the Indicator Fiche for each indicator and entry of the fiche in the NSRF IIS. 

193 

 
 
 
-  The conclusion of cooperation agreements between the National Coordination Authority and administrative data sources and 
registers in order to help the Managing Authorities meet the requirements of General Conditionality 7, with the undertaking 
to dispatch and forward data for them to be used for statistical purposes. 

-  The planning of investigations with an appropriate selection of samples and methodology (common long-term ESF result 
indicators), as part of the cooperation agreement between the National Coordination Authority (the Special Service for 
Strategy, Planning and Evaluation (EYSSA) and the Special Service for Coordinating and Monitoring ESF Activities 
(EYSEKT) and ELSTAT.   

-  The planning of investigations with an appropriate selection of samples and methodology (ERDF) following the cooperation 

between the Managing Authorities and the Special Service for Strategy, Planning and Evaluation (EYSSA). 

-  The audit, review and revision of result indicator data with regard to sources, methodologies and estimates with a view to the 
transparency and credibility of the flow of information from the Managing Authorities in collaboration with the National 
Coordination Authority and the bodies responsible for providing data, in order to continuously improve data quality.  
-  The release of data and methodologies by the coordination services for result indicators linked to strategies implemented 

horizontally in the Operational Programmes. 

The checklists of the Fiscal Control Committee (EDEL) relating to operations and systems contain specific questions relating to the 
evaluation of data for the performance indicators submitted to the European Commission in accordance with  the Guidance of 
common system assessment (EGESIF_14 0010_GuidanceonMCSassessment ). 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: (a) Deduction of ineligible amounts from the expenditure declarations and repayment of such amounts to the EU budget, (b) 
imposition  of  financial  corrections  and  recoveries  on  the  national  budget  (where  necessary),  (c)  corrective  or  other  measures  to 
ensure  that  the  recommendations  are  implemented,  (d)  cooperation  with  the  national  authorities  on  the  issuing  of  horizontal 
guidelines. 

In  Greece,  the  recommendations  of  the  ECA’s  audits  are  followed  up  until  the  entities  comply  with  the  findings  of  the 
recommendations in the ECA’s reports. 

The  ECA’s  recommendations  for  Greece  are  taken  into  account  in  the  preparations  of  the  Rural  Development  Programme,  the 

194 

 

of 

Question 3 

Follow-up 
recommendations 
formulated 
by 
in 
ECA 
Reports 

the 
its  Special 

 
 
 
 
 
 
 
setting-up of the Management and Control System as well as the updating of the National Action Plan to reduce the error rate in the 
Rural Development Programme. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: Greece follows up the ECA’s recommendations using the European Commission’s guidance on the measures to comply with 
those recommendations. 

The ECA’s recommendations for the Member States are taken into account in the preparation of the Rural Development Programme, 
the setting-up of the Management and Control System as well as the updating of the National Action Plan to reduce the error rate in 
the Rural Development Programme. 

195 

 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Hungary 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

The audit authority agrees with the error types listed. However, taking account of the random project checks under Section 110 of 
Government Decree No 4/2011 of 28 January 2011, it established  the following main  error types in 2016 in addition to the errors 
referred to in the table: 

YES 

NO 

-  Failure to provide evidence of compliance with the market price;  

-  Breach of the principle of sound financial management; 

-  Double financing. 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

YES 

NO 

-  Serious failure to respect public procurement rules; 
-  Failure to provide evidence of compliance with the market price; 
- 
Ineligible costs included in the expenditure declarations; 
-  Breach of the principle of sound financial management; 
- 
-  Double financing. 

Ineligible project/activities or beneficiaries; 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

We take account of the errors detected and the audit findings when amending national legislation and developing the IT system. They 

196 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
have also been incorporated into our training courses. 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

In the experience of the certification body, when the role was fulfilled by the Directorate-General for the Audit of EU Support, the 
main error types are the following, in diminishing order of importance: 

1. 

2. 

3. 

4. 

Overstated or ineligible area 

Ineligible beneficiary, activity, project or expenditure 

Non-compliance with public procurement rules 

Administrative error 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Accurate, detailed description of the conditions; preparation of detailed instructions; provision of comprehensive information. 

197 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

1.  Administrative error 

3.  Administrative 

2.  Overstated or ineligible area 

error 

3.  Ineligible beneficiary, activity, project or expenditure 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

  Administrative error 

o  Continuous training, comprehensive information: The continuous information given to beneficiaries and the training 
provided for farmers involved in submitting applications are both designed to reduce the number of administrative 
errors. 

o  Preparation of detailed instructions: Detailed communications and instructions are prepared for each aid measure and 

are made publicly available to aid claimants. 

  Overstated or ineligible area 

o  Geographical  information-based  electronic  applications,  which  farmers  can  use,  alongside  suitable  IT  support,  to 
accurately determine the location and extent of the area claimed. This has led to a considerable improvement in the 
quality of applications submitted, resulting in fewer administrative checks, data reconciliation, or on-the-spot checks 

198 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
having to be carried out. It can also help speed up the procedure for closing electronic applications. 

o  Prior checks: The application submission phase is followed by a prior check, which has greatly improved the quality 

of applications submitted. Checks on these higher-quality applications can then proceed more quickly. 

o  Electronic data reconciliation: The data reconciliation process is fully electronic (the reconciliation order is not sent 
out by post). In practice, this greatly speeds up and shortens the reconciliation process, so that the Paying Agency 
has access to the information it needs to assess the application more quickly. 

 

Ineligible beneficiary, activity, project or expenditure  

Accurate, detailed description of the conditions; preparation of detailed instructions; provision of comprehensive information. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

For the EAGF the main source of data is the Integrated Administration and Control System (IACS) operated by the Paying Agency 
(the Hungarian State Treasury). The IACS obtains the data and documents from beneficiaries, various competent authorities, and 
bodies performing delegated tasks. 

For the EAFRD the main source of data is also the Integrated Administration and Control System (IACS) operated by the Paying 
Agency (the Hungarian State Treasury). The IACS obtains the data and documents from beneficiaries, cooperating bodies and the 
Managing Authority. 

- the economic, social and territorial cohesion policy:  

- the procurement IT system (FAIR/EUPR); 

- information provided by beneficiaries; 

- State-operated data sources (including public registers), e.g. the Hungarian Central Statistical Office (KSH), the National Tax and 
Customs Administration (NAV), the Hungarian Energy and Public Utility Regulatory Authority (MEKH), the National Employment 
Service (NFSZ), the Hungarian National Bank (MFB), National Infocommunications Service Company Limited by Shares 
(NISZ/Ministry of the Interior), and the Higher Education Information System (FIR);  

- the European Union, e.g. Eurostat. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 

For the EAFRD the sufficient quality of the performance indicators is ensured by publishing the methodologies, the procedure and 

199 

 
 
 
 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

the communications from the Managing Authority. Also, monitoring information is issued for each call, and the methodology for the 
impact indicators is drawn up with the assistance of external experts. The Intermediate Body and Managing Authority also operate a 
control system in line with EU requirements, which checks the authenticity of the data submitted and monitors the status of the 
performance indicators on that basis. 

- the economic, social and territorial cohesion policy:  
 1. Monitoring and Evaluation Working Group 
The Monitoring and Evaluation Working Group covers the entire institutional system and monitors the indicators, political indicators 
and horizontal requirements created in the monitoring and information system. 

2. Partnership Agreement Monitoring Committee 
The Partnership Agreement Monitoring Committee was set up in accordance with Government Decree No 272/2014 of 5 November 
2014 on the system for using aid from certain European Union funds during the 2014-2020 programming period. It ensures 
compliance and coordination among operational programmes financed from the European Structural and Investment (ESI) Funds and 
monitors fulfilment of the objectives under the Partnership Agreement and compliance with horizontal principles and policies. 
The Monitoring Committee meets as the need arises, but at least twice per year. The organisations delegating permanent members of 
the Partnership Agreement Monitoring Committee include the government bodies, ministries, local government federations and 
national associations interested in the various development policies. 
The following bodies delegate permanent members acting in an advisory capacity: the European Commission (DG REGIO, DG 
EMPL, DG AGRI, DG MARE), the Hungarian State Treasury, the Directorate-General for the Audit of EU Support, etc. 

3. Indicator working group of the Partnership Agreement Monitoring Committee 
The working group was set up to examine and discuss ways to deal with problematic indicators and to make recommendations to the 
Monitoring Committee. 

4. Central monitoring unit (Monitoring and Evaluation Department)  
The central monitoring unit monitors fulfilment of the performance indicators on a monthly basis by cooperating with the managing 
authorities, and compares progress at absorption and indicator level so as to be able to intervene there and then and to take decisions 
in order to achieve EU objectives (absorption table). 

5. Regulatory background 

200 

 
 
 
 
 
 
 
5.1 The relevant responsibilities appear in the legislation governing the sector. 

The tasks assigned to the minister responsible for using EU funds under Government Decree No 272/2014 include: 
- monitoring, in cooperation with the managing authority, how the programmes are progressing, particularly with regard to fulfilment 
of the indicators; providing methodological support for obtaining and producing the data required to produce the indicators; 
examining how the indicators are progressing; and producing a regular report on the above for the Government, containing the 
opinion of the managing authority, so as to avoid any loss of funds; 
- coordinating the tasks relating to the annual implementation report, the annual schedule of notices, and the forwarding of financial 
data to the European Commission; providing the managing authorities with a schedule, joint template, methodology and database; 
- determining, in cooperation with the managing authority, the principles for allocating the performance reserve; 
- monitoring the performance framework ensuring fulfilment of the priority milestones set for the programmes. 

5.2. Creation of indicators, quality assurance and monitoring of fulfilment 

The criteria for the creation of indicators, quality assurance and monitoring of fulfilment are laid down in the Government Decree. 
Examples: 
- Each call must contain at least one indicator listed in the programme. 
- Each call must contain the common indicators that relate to the relevant call. 
- Each call must contain only the number of indicators that is absolutely necessary for measuring progress. 
The minister responsible for using EU funds is in charge of creating the indicators in the monitoring and information system, in 
cooperation with the relevant managing authority. 

6. Content of the grant agreement 

The mandatory elements of the grant agreement are the indicators to be fulfilled and their targets, the deadline for fulfilling them, and 
a clear, traceable definition of the horizontal requirements for the project. Government Decree No 272/2014 also clearly states the 
procedure for monitoring fulfilment of the indicator milestones. For example, if the indicator is not fulfilled, the funds are to be 
recovered from the promoter. Beneficiaries are allowed to reduce the indicator target only if there is a proportional reduction of aid. 
The aid must be reduced and the beneficiary must repay (except in the case of force majeure) the proportional amount of aid if the 
indicator is less than 75% of the target set for the project under the grant agreement. 

201 

 
 
 
 
 
 
 
 
 
7. On-the-spot checks 

On-the-spot checks cover fulfilment of the indicators undertaken under the project and the milestones set at project level. The 
Managing Authority may require beneficiaries to submit a maintenance report for a period of five years from the date set in the grant 
agreement, or three years in the case of SMEs. If a maintenance obligation has been set for the project, the beneficiary will report on 
fulfilment of the indictors on an annual basis. If the beneficiary has a maintenance obligation and has undertaken to fulfil the 
indicators and to provide information during the maintenance period, then a reporting obligation will be laid down. The maintenance 
report will cover the indicators undertaken during the maintenance period, fulfilment of the horizontal requirements set in the 
agreement, any changes in revenue, and the viability of the project. 

8. IT support 

Continuous development of the modules and functions of FAIR based on feedback from institutions and the beneficiary. For 
example, requests for information on indicators (2018 milestones), tracking the proportion of funds from operational programmes, 
ESF database, etc. 

Question 3 

YES 

NO 

of 

Follow-up 
recommendations 
by 
formulated 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: In accordance with Government Decrees No 4/2011 and No 272/2014, the Audit Department of the Prime Minister’s Office 
monitors  implementation  of  the  recommendations  addressed  to  Hungary  in  the  Court  of  Auditors’  annual  and  special  reports,  but 
only in respect of the operational programmes under its responsibility according to the decrees. The Audit Department of the Prime 
Minister’s Office ensures that these annual and special reports are forwarded to the relevant managing authorities. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: When drawing up legislation and procedures we obviously also take account of the Court of Auditors’ recommendations. 

202 

 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Ireland 

YES 

NO 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

ESF: Yes; ERDF: No. 

For ERDF programmes in Ireland.  The 3 most typical or common error types or error using the typology of errors categories are as 
follows; 

• 

• 

• 

Ineligible Expenditure 

Public Procurement  

Missing supporting information or documentation 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

ESF: Yes; ERDF: No. 

It is difficult to rank these in a diminishing order of importance, as the degree of importance may be viewed differently by various 
actors.  To an ERDF AA, the most important is probably errors relating to non-compliance with Public Procurement rules as it would 
indicate a breakdown  in the  management  and control systems by beneficiaries in the application of both  national  and  Community 
public  procurement  rules.    Errors  relating  to  such  breaches  are  generally  non-quantifiable  and  are  normally  corrected  by  flat  rate 
financial corrections which when projected / extrapolated to the sampling population increases the risk of a Programme breaching 
2% materiality.  For addressing errors in public procurement, the ERDF AA try to apply the flat rate corrections where appropriate 
and proactively advise beneficiaries, IBS and MAs on the areas they need to improve.  Copies of national and Commission checklists 
on public procurement are regularly forwarded to Programme MAs. 

For  ineligible  expenditure,  the  impact  of  breaching  materiality  may  not  be  the  same  as  public  procurement.    Nonetheless,  where 
ineligible expenditure has been included in a payment application demonstrate that the control systems in place have failed to pick up 

203 

 
 
 
 
 
 
 
 
 
 
 
 
on these issues of non-compliance.  Ineligibility errors are usually quantifiable and the ERDF AA in our Operations Audit Reports 
try provide best practice guidance to beneficiaries to try and prevent the error re-occurring. 

The final most common error is that of missing documentation resulting in a breach of audit trail.  These are usually quantifiable, but 
the most difficult to control.   The ERDF AA try to control audit trail errors by issuing audit notification letters in good  time and 
insisting on reconciled transaction listings and supporting documentation prior to audits commencing. 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

Non-compliance with scheme conditions and specifications. 

YES 

NO 

YES 

NO 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

1. Non-compliance with scheme conditions and specifications  

2. Ineligible beneficiary, activity, project or expenditure 

3.  Non-compliance 

3. Overstated or ineligible area 

with 
public 
procurement rules 

4. Administrative error 

5. Non-compliance with public procurement rules 

4.  Administrative 

error 

204 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Use of media articles (farming  press) to highlight common errors; Meeting  with Agricultural Advisors and Farm Organisations to 
raise  issues  of  non-compliance;  Training  for  both  advisors  and  farmers  on  agri-environment  and  climate  actions;  Use  of  SMS  to 
remind participants of deadlines. 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

2.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

3.  Administrative 

error 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

Please note that while overstated or ineligible area is the main error type the second most typical are duel claims of lands and overlap 
claims. 

YES 

NO 

Question 1.3.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

YES 

NO 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

Increased administrative checks and controls built into the GSAA process ensures such errors are identified at an early point in the 
application  process  and  either  removed  or  highlighted  for  formal  Preliminary  Checks.  These  processes,  in  addition  to  ongoing 
automated monitoring of the claims system, result in reduced instance of error.   

205 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Independent surveys, such as the National Farm Survey, are conducted independently of the Paying Agency and Managing 
Authority. Coupled with this is data collected from beneficiaries across the suite of Schemes and measures. 

- the economic, social and territorial cohesion policy: 

For ERDF Irish State agencies and Ireland’s Central Statistics Office are the main sources of data for the performance indicators.  

For the ESF, performance indicator data is mainly drawn from application forms completed by participants, data provided by the 
PES when referring participants to ESF-supported activities, interviews and surveys. A number of Intermediate Bodies are seeking to 
enter data-sharing arrangements with the PES to further support the collection of relevant data, particularly longer-term performance 
indicator data.  

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

The data collected independently of the PA and MA is subject to strict quality control requirements and utilises recognised statistical 
gathering methodologies. In addition, The PAY and MA have developed robust and reliable ICT systems to capture information in a 
consistent and accurate manner. 

- the economic, social and territorial cohesion policy:  
In relation to ERDF all Irish State Agencies and Irelands Central Statistics Office already collect data for performance budgeting in 
the state and as a result already comply with state rules and regulations.  Furthermore, performance indicators data is subject to 
checks at MA level. 

For the ESF, performance indicator data collected by beneficiaries is subject to checks at both IB and MA levels prior to its inclusion 
in reports provided to the Commission. The Management Verification checklist utilised by the MA incorporates checks relating to 
the collection of data and, with the rollout of the new eCohesion system, beneficiaries will be required to certify that all reasonable 
steps have been taken to collect the relevant data, and to ensure its accuracy. 

Question 3 

Follow-up 
recommendations 
by 
formulated 

of 

the 

YES 

NO 

206 

 
 
 
 
 
 
 
 
ECA 
in 
Reports 

its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: Upon receipt of the recommendations, the Department of Finance contacts all the relevant line Departments / Ministries and 
collates the information in preparation of an IE response. 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: All relevant recommendations are noted and addressed. The Department of Finance contacts all the relevant line Departments 
/ Ministries and collates the information in preparation of an IE response. 

YES 

NO 

207 

 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Italy 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

With regard to public procurement, the MEF (national coordinating organisation for audit authorities) organises training courses and 
seminars for auditors to enable them to improve recognition of and quickly pinpoint irregularities.  

The  MEF  has  also  organised  frequent  meetings  on  the  subject  of  public  procurement  with  Commission  departments  during 
coordination meetings with the Audit Authority. 

208 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

1) Ineligible beneficiary, activity, project or expenditure 2) Non-compliance with public procurement rules 3) Administrative error 
Error type 2 is not relevant to EMFF OP measures 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

The  MA  has  procedures  and  instruments  for  preventing,  detecting  and  correcting  any  operational  errors  and  irregularities 
(implementation model, checklist and audit trails, guidelines on the eligibility of expenditure, guidelines on irregularities and fraud, 
SiGeCo (management control system), manual of monitoring procedures for the intermediate bodies). 

209 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

- the economic, social and territorial cohesion policy:  

MEF-IGRUE FINANCING SYSTEM 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
the 
for 
data 

- the economic, social and territorial cohesion policy:  
 CHECKS USING SFC WEB SERVICES 

210 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

Follow-up 
recommendations 
by 
formulated 
ECA 
in 
Reports 

the 
its  Special 

of 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: THE RECOMMENDATIONS WERE FOLLOWED UP AS PART OF THE OPERATIONAL PROGRAMMES 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: THE RECOMMENDATIONS WERE FOLLOWED UP AS PART OF THE OPERATIONAL PROGRAMMES 

YES 

NO 

211 

 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Latvia 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

An  effective  pre-inspection  mechanism  has  been  developed  by means  of  which  any  discrepancies  identified  are  eliminated  in  due 
time, thereby significantly reduced the risk of irregular expenditure. We have made provisions to support financing beneficiaries on 
an institutional level – legislation and methodological materials have been drafted on the preparation of project applications, project 
implementation and monitoring, eligible and ineligible payments and issues relating to irregular expenditure. The websites of both 
the managing authority and the liaison authority provide methodological support documentation (guidelines and methodologies), and 
the  website  of  the  Procurement  Monitoring  Bureau  offers  an  overview  of  the  most  frequently  occurring  errors  in  procurement 
procedures.  The  liaison  authority  regularly  provides  explanatory  guidance  to  financing  beneficiaries  and  project  applicants  on 
request, and seminars are also organised on a regular basis on the procurement framework and the most frequently occurring errors. 

212 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

We agree that the error types listed are the most typical kind, but the second error – overstated or ineligible area – is not typical to 
Latvia. The activities of the Land Registry are fully up-to-date in Latvia, including with regard to mapping and area measurement 
capacities. The electronic application system introduced in 2016 prevents the applicant from indicating an area of land that exceeds 
that of the block. The system displays a warning if the areas entered by an applicant overlap geospatially. 

YES 

NO 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

1.  Ineligible  beneficiary,  activity,  project  or  expenditure;  2.  Non-compliance  with  public  procurement  rules,  the  procurement 
procedure and its rules of application for projects financed by a contracting authority 

YES 

NO 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

- conducting information and communication measures for potential support applicants, support beneficiaries and the general public 
(conferences, seminars, publications in the media and on social networks, etc.); 

- providing access to information on websites (handbooks, guidelines, information materials, etc.); 

- establishing an electronic application system and providing for its continued improvement, developing/putting into practice various 
IT tools, thereby providing for the widest possible implementation of e-governance; 

- improving control mechanisms for the purpose of implementing these EU funds (EAFRD and EMFF). 

213 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

2.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

3.  Administrative 

error 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

We acknowledge the second error. The second error – overstated or ineligible area – is not typical to Latvia, because the electronic 
application system introduced in 2016 prevents the applicant from indicating an area of land that exceeds that of the block. 

YES 

NO 

Question 1.3.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Ineligible beneficiary, activity, project or expenditure 

YES 

NO 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

- introduction of a geospatial application system, with 100 % of applications being submitted electronically, minimising the potential 
for error; 

- keeping the Land register up-to-date using newly-taken orthophotos, satellite images and control results;  

- improving control mechanisms using remote checks; 

- ensuring information is available. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 

In accordance with the requirements of EU legislation, information on the implementation and progress of the Rural Development 
Programme (EAFRD) and support measures (EAFG) is being presented to the Commission. Information is being provided on the 
level of financial and result indicators, and data are obtained from the paying agency’s (Rural Support Service – LAD) centralised 
information system. This common centralised information system also gathers data received from other bodies for the administration 

214 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
to  the  Commission  in 
the areas of: 

of applications (the Nature Conservation Agency, the State Forest Service, the Agricultural Data Centre, the State Revenue Service, 
etc.) 

- the economic, social and territorial cohesion policy:  

- All information regarding objectives and indicators required for monitoring is stored in the EU Cohesion Policy Fund management 
information system (KP VIS), developed in accordance with Article 125(2)(d) of Regulation (EU) No 1303/2013; 

- With regard to achieving the indicators laid down in the operational programme, the data sources are referred to in the approved 
operational programme; these are mostly project data drawn from project reports by financing beneficiaries and payment requests, 
along with data taken from the Central Statistical Board data, assessments, various information system data bases, etc.; 

- Financial circuits of project financing beneficiaries; 

- Actual execution of previous calendar years’ budgets; 

- A time schedule for implementation of specific support objectives and their measures, and information on the indicative period for 
conclusion of contracts; 

- Actual execution of similar activities and/or sub-activities under the 2007–2013 EU Fund programming period budget. 

- State budget fund utilisation forecasts as indicated in planning documents; 

- Information provided by responsible authorities and the liaison authority (annual reports); 

- Assessments; 

- Other available information sources. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

The paying agency has developed a common centralised information system which operates with the support of the project 
application administration system, the payment information system and the bookkeeping accounts system. These systems are 
interlinked with provision for data import. Furthermore, the operation of the electronic application system is rendered as 
comprehensive as possible and is being continually improved, with the necessary data on operational indicators being stored and 
selected from the data warehouse in which all requisite indicators are gathered to ensure an effective monitoring and assessment 
procedure for the programme concerned. With the aim of providing the Commission with sufficiently high quality implementation 
data, ex-post checks of stored and selected data are carried out at both paying agency and managing authority levels (logical check 
and quantitative check of data, and repeat selection, check and comparison of data).  

The reporting forms prescribed by the European Commission are frequently complex and intricate and this hinders the submission of 

215 

 
 
 
Question 3 

Follow-up 
recommendations 
by 
formulated 
ECA 
in 
Reports 

the 
its  Special 

high quality data to the Commission in due time. 

- the economic, social and territorial cohesion policy:  
As referred to above, most of the data is drawn from data bases endorsed at national level, and these data are therefore regarded as a 
credible source and the quality of the data is not called into question. This also applies to State budget data and the actual use of 
budgetary funds. Specific results achieved (indicators) in the context of projects are drawn from the KP VIS and are based 
accordingly on payment applications submitted by financing beneficiaries and the corresponding administrative checks carried out 
for the purpose of assessing results. When planning and presenting budget forecasts to the European Commission, an appropriate 
degree of tolerance is applied to the data to allow for examination of applications, taking into account expert methodologies, 
experience gained over previous EU fund programming periods, and risk factors and other tolerance-related assumptions. Latvia 
therefore confirms that the data provided are sufficiently credible and of appropriately high quality. 

of 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: To ensure the effective implementation of the operational programmes (EAFRD and EMFF) and support measures (EAFG), 
taking into account the conclusions and recommendations made in the context of the audits, a national action plan for reducing error 
rates is being prepared, laying down the necessary corrective measures, a time schedule and responsibilities. Implementation of the 
recommendations and corrective measures set out in the action plan is subject to continual monitoring and on request the action plan 
will be sent to the European Commission. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: The ECA audit conclusions and recommendations concerning all Member States are being critically assessed, discussions in 
this regard are being organised, and where necessary the implementation system for operational programmes and support measures is 
being improved. Information is being incorporated in the error rate reduction action plan as appropriate. 

216 

 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Lithuania 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

In accordance with Article 65(1) of Regulation (EU) No 1303/2013, the basic eligibility requirements are laid down in the Rules for 
the  administration  and  financing  of  projects,  as  approved  by  Order  No  1K  316  of  the  Minister  for  Finance  of  the  Republic  of 
Lithuania of 8 October 2014.  

In accordance with subparagraph 4.7.1 of the Rules on the allocation of responsibilities and duties between institutions with regard to 
the  implementation  of  the  2014-2020  Operational  Programme  for  investments  from  EU  funds,  as  approved  by  Government 
Resolution No 528 of 4 June 2014, the Ministry of Finance, as the managing authority, has drawn up recommendations regarding the 
eligibility  of  project  expenditure  for  funding  from  the  EU  structural  funds  (hereinafter  ‘the  recommendations’).  The 
recommendations clarify how EU and Lithuanian legislation should be applied in order to ensure that eligible project expenditure is 
indicated  and  evaluated  correctly  in  accordance  with  the  principle  of  sound  financial  management.  The  Ministry  and  the 
implementing bodies carrying out the functions entrusted to them under the Rules on the allocation of responsibilities for 2014-2020 
follow  the  recommendations  when  assessing  project  applications  and  taking  decisions  on  the  eligibility  of  expenditure.  Where 
necessary, the recommendations are reviewed and refined.  

In  order  to  ensure  proper  implementation  of  the  Operational  Programme  in  accordance  with  the  EU  regulations  and  to  prevent 
irregularities  in  public  procurements,  the  system  for  administering  the  EU  structural  funds  in  the  period  2014-2020  (as  in  the 

217 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
previous  financing  period)  involves  the  Public  Procurement  Office,  which  is  responsible,  under  the  Lithuanian  Law  on  public 
procurement, for implementing public procurement policy and enforcing the Law on public procurement and related implementing 
legislation, as well as for prevention, giving advice on public procurement matters and administering the Central Public Procurement 
Information System.  

So as to ensure that management checks are conducted properly and on time, the Ministry of Finance, as the managing authority, has 
adopted  national  legislation  laying  down  the  procedure  for  checking  project  promoters’  public  procurement  documents  and  has 
approved a model public procurement checklist. 

The  certifying  body  of  the  Operational  Programme  for  investments  from  EU  funds  evaluates  the  information  it  receives  and,  in 
accordance with paragraph 171 of the Rules on the administration of the Operational Programme for investments from EU funds for 
2014-2020,  takes the following into account when drawing up the accounts for the European Commission: the available information 
on  expenditure  which  is  potentially  ineligible  and/or  not  declarable  to  the  European  Commission,  identified  repayable  funds, 
suspected  and/or identified  and uncorrected  infringements relating to the expenditure declared to the Commission in the reporting 
year, the results of checks carried out by it, the managing authority and implementing bodies and the results of audits and/or checks 
carried  out  by  audit  bodies,  the  European  Court  of  Auditors,  the  European  Commission  and  other  authorities.  It  subtracts  the 
potentially  ineligible  expenditure  from  the  amounts  of  project  expenditure  declared  to  the  European  Commission  in  payment 
applications. 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

218 

 
 
 
 
 
 
 
 
 
 
 
 
 
3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

The Ministry of Agriculture carried out an analysis and assessment of the possibility of reducing the error rate and an assessment of 
the  effectiveness  of  the  process.  The  plan  for  implementing  the  recommendations  contained  insights  into  and/or  comments  on 
enhancing  prevention  and  stepping  up  monitoring  and  control  of  the  error  rate  for  the  2014-2020  Lithuanian  rural  development 
programme.  On  the  basis  of  that  plan,  the  National  Paying  Agency  under  the  Ministry  of  Agriculture  is  to  present  statistical  and 
analytical information about all infringements and errors detected to the management committee for the 2014-2020 Lithuanian rural 
development  programming  period  twice  every  calendar  year  until  the  end  of  that  period,  and  both  authorities  will  take  all  the 
necessary action to ensure a rapid response and to step up checks so as to reduce the error rate to an acceptable level. The National 
Paying  Agency  under  the  Ministry  of  Agriculture  has  improved  its  internal  procedures  for  assessing  the  reasonableness  of 
expenditure (an internal costs catalogue has been drawn up and is revised each year). Articles are being prepared and seminars  and 
round tables are held at which the most common errors are discussed. 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Publicity (publishing infringement maps and practical examples of the application of penalties and ongoing publication of up-to-date 
information), clarification of legislation (providing observations). 

Question 2.1 

- the common agricultural policy:  

219 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Please  describe 
the 
main  sources  of  data 
the  performance 
for 
indicators you provide 
to  the  Commission  in 
the areas of: 

The Agricultural Aid Administration Information System (ŽŪPAIS) is used to administer EU aid beneficiaries’ applications and 
projects and to store data relating to them and to the aid payments and accounts. On the basis of the data stored in that system, 
declarations of expenditure and other financial statements are drawn up and submitted to the European Commission. Declarations of 
expenditure are submitted to the Commission once a month for the EAGF, while declarations of expenditure and payment claims for 
the EAFRD are submitted to the Commission once a quarter. Those declarations set out the amounts paid out to aid beneficiaries and 
the amounts repaid by them. 

- the economic, social and territorial cohesion policy:  

Lithuania has set up a system of indicators, including the indicators laid down in the Operational Programme, which were selected in 
accordance with the Commission’s methodological documents, and national indicators, which supplement the indicators laid down in 
the Operational Programme if they do not cover all of the measures planned in the Operational Programme. National legislation lays 
down a requirement for all projects to achieve at least one product or results indicator.  

All information is stored in the information system (SFMIS2014), which can be used to carry out continuous monitoring of progress 
towards achieving indicators at both project and Operational Programme level. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
the 
for 
data 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

The administration, control, accounting and payment of EU aid is carried out in accordance with the accreditation criteria set out in 
Commission Implementing Regulation (EU) No 908/2014. The detailed working procedures that have been approved ensure the 
separation of functions and the four-eyes principle, so the reports submitted to the European Commission are accurate. The accounts 
for each financial year are certified by an independent audit firm, which sends an opinion to the European Commission. Aid funds 
are paid out in accordance with the appropriations provided for in the aid estimates and the financial envelopes provided for by the 
Commission. 

- the economic, social and territorial cohesion policy:  
The Lithuanian Government approved an annual plan for achieving the review indicators set out in the Operational Programme. That 
plan maps out the process of achieving those indicators for each year of the financing period. The intermediate body puts together 
quarterly plans for achieving the indicators laid down in the plan for reviewing the Operational Programme. Each quarter, the 
managing authority assesses the progress made towards achieving those indicators and the risks involved and sends reports to the 
Lithuanian Government proposing the necessary action to be taken to achieve those indicators. Each year, when the annual 
implementation reports are drawn up for the Commission, the progress made towards achieving all the indicators for the Operational 
Programme is analysed. 
In order to assess the impact of and make improvements to the measures, an evaluation plan has been put together for the entire 

220 

 
 
 
programming period, planning evaluations covering all of the Operational Programme’s priorities. 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
in 
ECA 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: In so far as they relate to the administration of EU investments, the ECA’s recommendations are implemented. 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: 

YES 

NO 

221 

 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Luxembourg 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Reply for the ESF: Ineligible costs constitute the main type of error affecting the ESF.  

Public procurement is one of the areas covered by first-level checks. 

In principle there are no ineligible projects, activities or beneficiaries. Projects are monitored closely from the outset. This covers the 
drawing-up of applications, the completion of activities and the objectives. 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Reply  for  the  ESF:  System  of  100%  ex  ante  checks,  introduction  of  simplified  cost  options,  establishment  of  a  centralised  IT 
platform, information meeting, closer monitoring, etc. 

222 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

YES 

NO 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

Reply for EAGF/EAFRD: Agree, except that point 2 does not concern certain measures, i.e. ‘investments’ and ‘start-ups for young 
farmers’. As for point 3, public procurement rules do not apply, so no shortcomings can be established and this is not a source of 
errors. 

YES 

NO 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Reply for EAGF/EAFRD: Agree, except for points 2 and 3, which do not apply to ‘investments’ and ‘start-ups for young farmers’. 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Reply for EAGF/EAFRD: The eligible cost for investment aid must be reasonable and may not exceed the unit prices set. The unit 
prices procedure guarantees that the costs taken into account are reasonable. 

223 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Reply for EAGF/EAFRD: Efforts have been made at various levels: 

  Constant improvements to the quality of the reference data (LPIS, EFA layer, etc.) 

  Reduction in the sources of errors through the use of on-line applications (GSAA) 

  Better targeting of on-the-spot checks 

  Improvements to internal procedures (e.g. examination of aid applications). 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Reply for EAGF/EAFRD: Paying Agency, aid applications, accounting data 

- the economic, social and territorial cohesion policy:  

Reply for the ESF: data reported by the project promoters 

Reply for the ERDF: The main sources of data for the indicators are the beneficiaries, STATEC, EUROSTAT and the various 

224 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ministries responsible. 

Question 2.2 

- the common agricultural policy:  

Reply for EAGF/EAFRD: cross-checks, quality analyses 

- the economic, social and territorial cohesion policy:  
Reply for the ESF: 100% documentary and on-the-spot checks, which also serve to verify completion of the activities, including in 
particular training for final beneficiaries. 
Reply for the ERDF: As the Luxembourg ERDF OP is very small, the Managing Authority is in regular contact with all the 
beneficiaries and with the national statistical office (STATEC) and other ministries and government departments. There are six 
indicators relating to performance, which means that they are easy to manage. 

Please  describe  how 
you  ensure  that  the 
the 
for 
data 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: ERDF, EAGF/EAFRD: Yes; ESF: No.  

Reply for the ESF: 

There are currently no recommendations that are applicable to the ESF in Luxembourg. 

Reply for the ERDF: 

Annual follow-up meetings with beneficiaries. 

Reply for EAGF/ERDF[sic]: 

The recommendations by the Court of Auditors are set out in a table comprising the action plans for the various audit visits  by the 
Court  and  the  Commission.  This  table  is  used  as  a  basis  for  follow-up.  It  contains  the  Court’s  recommendations,  the  measures 
identified, the managers in charge and a timetable for completion of those measures. 

225 

 
 
 
  
 
 
 
 
 
YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: ERDF/EAFRD: Yes; ERDF, ESF: No. 

Reply for the ESF: 

The recommendations do not apply as there are no identical or specific problems. 

Reply for the ERDF:  

The recommendations do not apply as there are no identical or specific problems. 

Reply for EAGF/ERDF[sic]: 

The recommendations by the Court of Auditors are set out in a table comprising the action plans for the various audit visits by the 
Court and the Commission. This table is used as a basis for follow-up. It contains the Court’s recommendations, the measures 
identified, the managers in charge and a timetable for completion of those measures. 

226 

 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Malta 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

In our opinion the “serious failures to respect public procurement rules” is of primary importance. 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

(a)  Training  which  also  covers  beneficiaries,  on  what  are  the  most  common  errors  and  how  to  avoid  them.  (b)  A  manual  of 
procedures  which  is  accessible  by  everyone.  (c)  An  informative  website.  (c)  The  four  eye-principle  and  segregation  of  duties  and 
similar controls. (d) Inclusive ‘Checklists’ applied by the Management Authority officials, designed on regulations and guidelines of 
the European Commission. 

227 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

(a) Training of officials working in the Management Authority on all aspects related to their work. (b) Applications with guidelines. 
(c)  Sessions  where  information  on  the  respective  measures  is  provided.  (d)  An  informative  website.  (e)  A  manual  of  procedures 
which  is  accessible  by  everyone.  (d)  Individual  meetings  between  Management  Authority  officials  and  those  implementing  the 
project. (f) Several layers of control and improvements in the control processes based on experience and lessons learnt from previous 
funding  programmes.  (g)  Inclusive  ‘Checklists’  applied  by  the  Management  Authority  officials,  designed  on  regulations  and 
guidelines of the European Commission. (h) Compilation of a register of risks to be reviewed regularly. 

228 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Improvement of controls based on experience and lessons learned from previous funding programmes; organisation of more regular 
informative meetings to explain the important aspects to interested parties; distribution of letters and electronic messages in order to 
facilitate the process of application and claims for benficiaries and to reduce the risk of error. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Robust computerised systems in which the data could be inputed. Progress Reports. The annual implementation report. Individual 
meetings with the beneficiaries. The National Statistics Office (NSO) and the Malta Paying Agency (ARPA). 

- the economic, social and territorial cohesion policy:  

Computerised monitoring systems which have, for instance, modules on indicators;  Reports listing the progress of a project (twice a 
year). Report of completion of the project. National Statistics Office. 

229 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 2.2 

- the common agricultural policy:  

Control and verification procedures. Evaluations. By exchanging data with other competent organisations. 

- the economic, social and territorial cohesion policy:  
 Control and verification procedures. Evaluations. By exchanging data with other competent organisations. 

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

of 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: The Parliamentary Secretariat for European Funds and Social Dialogue within the Ministry for European Affairs and Equality 
(MEAE) is specifically focused on EU funds. This makes it easier for the Division concerned to follow up on the ECA observations, 
according to the fund, until their closure. 

Officials in manigerial positions of the respective Divisions ensure that the recommendations are acted upon. All this is also done in 
respect of other reports issued by the National Audit Office and the Department for Internal Audit and Investigations. 

The Financial Control Unit has a role in this respect as well. 

Update of the ‘checklists’ used in controls and verifications. 

The recommendations concerning the implementation of the Funds under the Common Agricultural Policy (CAP) are transmitted to 
the  relevant  departments  of  the  Paying  Agency,  to  be  addressed  accordingly.  The  Agency  applies  management  procedures  where 
findings  and  recommendations  are  analysed  carefully  in  order  to  inspire  the  changes  in  the  relevant  processes  and  the  relevant 
internal controls, including through Internal Memos to be pursued by the units and departments concerned. These are carried out as 
part  of  the  review  done  by  the  internal  audit  service  on  an  annual  basis  as  well  as  external  auditors  during  the  certification  of 
accounts. 

230 

 
 
 
 
 
 
 
 
YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: The initiatives listed in the reply to question 3.1 also apply in relation to this question, thereby improving the relevant control 
systems and in particular where they involve horizontal principles for European funds, transparency in the fight against tax fraud and 
reduction of error rates. 

A specific official is assigned to analyse the recommendations done by the ECA to other Member States so that the division is 
informed of those observations to which substantial risks are linked, so that Malta does not repeat erors identified by the ECA in its 
observations. 

231 

 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Netherlands 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

232 

YES 

NO 

YES 

NO 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

233 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

- the economic, social and territorial cohesion policy:  

Question 2.2 

- the common agricultural policy:  

- the economic, social and territorial cohesion policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

of 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: 

YES 

NO 

234 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Poland 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

  wide-ranging information and training activities;  

 

simplification of procedures. 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

In its annual report for 2016 the ECA described the major error types in the EAFRD. The ECA audit in Poland found: 

 

Ineligible beneficiaries, activities, projects or expenditure  - error concerning ineligible costs (description in  Observation 4, 
Annex I).  

YES 

NO 

235 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

  Overstated  or  ineligible  area  -  errors  concerning  overstated  or  ineligible  areas  were  found  by  the  audit  on  the  European 

Agricultural Guarantee Fund (EAGF) and described in point 1.3. 

  Non-compliance  with  public  procurement  rules  -  in  connection  with  an  error  concerning  non-compliance  with  the  public 
procurement  rules,  the  ARiMR  acted  in  accordance  with  the  decision  of  the  national  appeal  body  (KIO),  which  was  also 
emphasised by the European Commission (for a detailed description, see Observation 5, Annex I). 

2.  Overstated 

or 

ineligible area 

In the light of the above explanations, it is not possible to determine whether these are the most frequent error types because only one 
such error has been established in Poland (regarding the EAFRD) and it concerned ineligible costs. 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

The  error  found  by  the  ECA  auditors  (ECA  audit  DAS  2016  PF-8337)  concerned  non-compliance  with  public  procurement  rules 
under  Measure  125  of  the  2007-13  RDP.  We  did  not  agree  with  the  auditors’  findings  and  presented  our  position  on  the  matter, 
which, however, was not taken into account by the ECA (letter from the ECA dated 29 June 2017). In the case of projects where the 
beneficiaries  are  obliged  to  apply  the  public  procurement  rules,  errors  in  this  area  appear  to  be  the  most  frequent  given  the 
complexity of the issue. 

YES 

NO 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Clarifications as in point 1.2.1 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

According to the ARiMR’s analysis of irregularities detected in the first half of 2017 and information on measures taken or planned 
to minimise or eliminate these irregularities, measures to minimise or eliminate irregularities detected in the first half of 2017 during 
the evaluation of public procurement procedures carried out by beneficiaries concern the following: 

1)  the  ARiMR  carries  out  public  procurement  training  for  regional  governments;  regional  government  trainers  pass  on  the 

knowledge to their colleagues; 

2)  before  calls  for  tender  are  launched,  regional  governments  provide  training  for  beneficiaries  on  public  procurement 

procedures, application documents and legislative amendments; 

3)  aid  award  agreements  incorporate  decisions  concerning  the  adopted  system  of  penalties  applicable  in  the  process  of 

236 

 
 
 
 
 
 
 
 
 
 
 
 
evaluating public procurement procedures; 

4)  written answers to all questions from regional governments and beneficiaries concerning public procurement law. 

Public procurement contracts are evaluated using the procedures for dealing with cases of non-compliance with public procurement 
law. The system adopted in the 2014-20 RDP involving the application of a schedule of percentage penalties (‘taryfikator’) in cases 
of non-compliance ensures that the authorities responsible for evaluating contracts take the correct course of action. In addition, as 
part  of  the  public  procurement  evaluation  the  beneficiary  is  informed  of  any  irregularities  detected  and  of  the  fact  that,  when  the 
payment claim is evaluated, the aid will be reduced by an amount corresponding to those irregularities. 

In  view  of  the  fact  that  the  main  errors  identified  by  the  ECA  involved  ineligible  costs,  measures  have  been  taken  to  recover  the 
funds.  The  errors  detected  by  the  ECA  should  be  regarded  as  incidental  (one-off)  resulting  from  the  incorrect  classification  of 
ineligible costs by the beneficiaries. The procedures developed and adopted for application at the ARiMR comprise detailed control 
mechanisms which ensure that projects are evaluated correctly. 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Pursuant to Article 72(3) of Regulation (EU) No 1306/2013, farmers are provided, together with the individualised application form, 
with information on the maximum area eligible for the single area payment on the reference parcel. The maximum reference area 
established in the Land Parcel Identification System (LPIS) for the reference parcel is agricultural land complying with the criteria 

237 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
laid down in Article 35 of Commission Delegated Regulation (EU) No 639/2014.  

In  the  light  of  the  above,  each  year  farmers  are  sent  pre-established  payment  applications  (based  on  the  previous  year).  The  pre-
established forms indicate the maximum eligible area of the reference parcel and the area approved for the single area payment in the 
previous year, broken down into agricultural parcels. The graphical material provided to the beneficiary indicates the boundaries and 
unique identification of the reference parcels and the boundaries of the agricultural parcels approved in the previous year so that the 
beneficiary can indicate the size and location of each agricultural parcel correctly. As of 2016, it will also indicate the size, type and 
location of the ecological focus areas approved in the previous year. 

All the data referred  to above are  made available to  100  % of farmers in the online form (‘e-Wniosek’), enabling  them to submit 
payment claims using the geo-spatial application form. The geo-spatial application form is designed to enable irregularities relating 
to overdeclaration, overshoot of the maximum reference area etc. to be detected and some errors to be eliminated, subject of course 
to the application being submitted via the online form. 

With a view  to designating  areas of permanent grassland for the  2015 claim year, the  ARiMR  carried  out an analysis of farmers’ 
declarations in previous years. Pursuant to Article 4(1)(h) and (i) of Regulation (EU) No 1307/2013, permanent grassland means land 
that has not been included in crop rotation for at least five years.  Farmers have been made aware of this fact; this information was 
provided to them together with the individualised application form. Last year the Agency carried out a detailed analysis of previous 
declarations, all land uses on the orthophoto maps and the results of on-the-spot checks. Automatic checks were carried out on all 
parcels declared as SAPS permanent grassland and grass on arable land declared in agri-environmental programmes. On that basis, 
areas  of  permanent  grassland  and  potential  grassland  were  designated.  In  the  latter  case,  the  information  sheet  states  that  the 
permanenet  grassland  was  declared  on  reference  parcel  was  declared  for  four  consecutive  years,  which  means  that  if  permanent 
grassland or perennial grass is declared on that parcel in the claim year concerned, that area will become the permanent grassland 
layer (i.e. this will be reflected in the LPIS).  

The Agency has provided farmers with all the requisite information.  

Pursuant to Article 17(5) of Commission Implementing Regulation (EU) No 809/2014, the farmer must unambiguously identify and 
declare the area of each agricultural parcel and, where applicable, the type, size and location of the ecological focus areas. For the 
purpose of greening payments, farmers must also specify the way in which the declared agricultural parcel is used. To that end, they 
may confirm the information provided by the Agency using the pre established form. However, where the information on the area, 
location or boundary of the agricultural parcel or, where applicable, the size and location of the ecological focus areas, is not correct 
or is incomplete, the farmer should correct or make changes to the pre-established form. On the basis of the corrections or additions 
made by the farmer to the pre-established form, the Agency will assess whether an update of the corresponding reference parcel is 
required, having regard to Article 5(3) of Commission Delegated Regulation (EU) No 640/2014. In the event of any doubts arising 
during checks on the area, parcels will be visualised and the area measured.  

The maximum eligible area is changed only if there is a mismatch between the area declared for payments on individual reference 
parcels  and  the  value  of  the  maximum  eligible  area.  In  that  case,  the  authority  conducting  proceedings  is  required  to  explain  the 
irregularities  pursuant  to  Article  3(2)(1)  and  (2)  of  the  Payments  under  Direct  Support  Schemes  Act,  read  in  conjunction  with 

238 

 
 
Articles 7 and 77(1) of the Code of Administrative Procedure. 

In  addition,  each  year  together  with  the  individualised  application  form,  the  paying  agency  sends  out  a  set  of  instructions  which 
provide information on the rules governing eligibility for payments and help with filling in the payment claim. 

Information on the rules governing eligibility for payments is also available on the paying agency’s website and at branch offices. 

In short, Poland provides farmers with all the possible information regarding eligible areas and ecological focus elements, whereas 
the farmer is responsible for submitting a correct payment claim. 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

The main source of data for the performance indicators for the Managing Authority (MA) of the 2014-20 RDP in Poland, i.e. the 
Ministry of Agriculture and Rural Development, is the annual report on implementation of the 2014-20 RDP drawn up by the 
accredited Paying Agency (PA), i.e. the ARiMR. Pursuant to Article 8(2)(4) of the Regulation of the Minister for Agriculture and 
Rural Development of 13 August 2015 on the data needed for correct monitoring of implementation and evaluation of the 2014-20 
RDP, the PA transmits the report to the MA by 20 March of the year following the year covered by the report. On the basis of the 
data provided in the PA’s report, the MA draws up, in accordance with the structure and requirements of the 2014-20 Common 
System for Fund Management (SFC2014), an annual implementation report which it then transmits via SFC2014 to the European 
Commission by 30 June of each successive year until 2024 pursuant to Article 75(1) of Regulation (EU) No 1305/2013 of the 
European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund 
for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005. 

- the economic, social and territorial cohesion policy:  

• SL 2014, Central Statistical Office and others; 

• project monitoring - project data (SL 2014); 

• General Directorate for Environmental Protection - as regards environmental indicators and the Infrastructure and Environment 
Operational Programme (IEOP); 

• the Central Statistical Office - data on infrastructure, the environment, access to medical services, energy efficiency, waste, 
museums; 

• Public Opinion Research Centre (cultural participation indicators), IEOP; 

• Eurostat - data on particulate matter; 

• National Headquarters of the State Fire Service - data on whether fire engines reach incidents within 15 minutes; 

• Polish Road Safety Observatory - accident data; 

239 

 
 
• Rail Transport Office - railway information; 

• Ministry of Energy (Herfindahl-Hirschman index) - diversification of the energy market; 

• Information from electricity providers - smart meters; 

• Energy Regulatory Office - energy indicators; 

• OECD - indicators concerning access to medical services (e.g. average length of stay in hospital); 

• Ministry of Digitisation - indicators concerning digital society collected by commissioned research; 

• Digital Agenda Scoreboard - data for the Digital Poland Operational Programme; 

• Evaluations - data for the Knowledge Education Development Operational Programme; 

• Polish Academy of Sciences (Institute of Geography and Spatial Organisation) - Intermodal Territorial Accessibility indicator and 
related data; 

• Studies commissioned by the Ministry of Development - data on technical assistance and promotion of European funds. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

The data provided to the Managing Authority (MA) by the PA are aggregated at the level of the application documents submitted by 
beneficiaries of 2014-20 RDP instruments, i.e. aid applications, aid contracts, decisions, payment claims, reporting on activities 
carried out. These data are entered to IT systems by the staff of the PA and the implementing bodies (with regard to the instruments 
within their remits). Clerical errors do occur but are so insignificant that they do not have much impact on the final value of the 
indicators. If an error is detected it is immediately corrected and transmitted to the MA. 

- the economic, social and territorial cohesion policy:  

Use of reliable sources in the process of data collection/aggregation*  

* Obligations relating to the transmission of financial information to the Commission are performed by the Managing Authorities 
within the framework of reporting on the operational programme pursuant to Articles 50 and 111-112 of Regulation (EU) No 
1303/2013 of the European Parliament and of the Council of 17 December 2013 (‘the General Regulation’). 

240 

 
 
 
 
 
 
Question 3 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

of 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: The following action has been taken on the errors described in Annex 7.3 to the 2016 Annual Report: 

• As regards errors relating to ineligible beneficiaries or ineligible costs (error quantified at up to 20 %), action has been taken to 
recover the funds (for a detailed description, see Observation 4, Annex I);  

•  As  regards  the  error  relating  to  non-compliance  with  the  public  procurement  rules  (error  with  an  impact  of  20  %  or  more),  the 
ARiMR acted in accordance with the decision of the national appeal body (KIO) when rejecting the lowest bid for implementing the 
work, which was also emphasised by the European Commission (for a detailed description, see Observation 5, Annex I).  

In addition, the ARiMR is implementing a corrective action plan within the framework of the EAFRD incorporating measures taken 
by the ARiMR to address irregularities set out by the European Commission in the Annual Activity Report for 2016.  

The ARiMR also monitors on an ongoing basis the incorporation of the corrective action plan into the financial aid mechanism i for 
fruit and vegetable producer groups with preliminary recognition (Observation 6, Annex I). 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: Specific examples should be provided in reply to questions 3.1 and 3.2. In our opinion, a topical example which clearly 
illustrates the Member State’s efforts to adapt to the ECA’s recommendations is implementation of the recommendations of ECA 
Special Report No 8/2016 - Rail freight transport in the EU: still not on the right track. This report formulated recommendations Nos 
6 and 7 on better use of EU funds by the Commission and Member States. The position of the IEOP MA is set out below, indicating 
that Poland is applying the ECA’s recommendations as regards the IEOP. 

The IEOP is an instrument whereby the objectives set out in the strategy, which is essentially ‘owned’ by the Ministry of 
Infrastructure and Construction, can be achieved. The ECA’s recommendations on that subject in the above-mentioned report fall 
within the remit of the Ministry of Infrastructure and Construction as they relate to transport policy and strategy. Rail freight projects 
which enhance access to maritime ports are also implemented within the framework of the Connecting Europe Facility (CEF).  

  Recommendation 6 – Consistent approach between policy objectives and fund allocation 

241 

 
 
 
 
 
 
 
 
 
a)  When allocating the available EU funds for transport infrastructure, the Commission and the Member States should bear in 
mind EU transport policy objectives, thereby contributing to a more stable, competitive and efficient rail freight transport 
system. EU funds should be targeted on bottlenecks, missing links (e.g. rail connections to ports and in cross-border areas) 
and other measures which can have a significant impact on the competitiveness of rail freight transport, like the renovation of 
points infrastructure and last-mile facilities.  

b)  Next, the Commission should monitor the portion of EU funds that is actually invested in projects solely or partially 

concerning rail freight.  

The amount of funding allocated to the development of the rail industry in Poland in 2014-20 (approx. €5 billion) fully reflects the 
EU’s policy and approach to promoting and supporting low carbon transport, to reducing congestion on roads and in city centres and 
to combating climate change. In this way, investments which improve the competitiveness of rail freight are being supported. 

EU funds dedicated to rail transport are distributed in accordance with the Transport Development Strategy adopted by the Cabinet in 
January 2013. This strategy sets targets and actions which will enable a competitive, efficient and environmentally-friendly transport 
system to be developed in Poland. The Transport Development Strategy’s implementing document is the 2014-20 IEOP. It provides, 
inter alia, for a greater role for rail transport in the national integrated transport system by filling gaps on mainlines in the TEN-T, 
including those covered by the AGTC Agreement, stretches connecting important industrial and business centres and lines 
connecting seaports with inland economic centres.  

The deployment of CF funds within the framework of the 2014-20 IEOP was made contingent on compliance with ex-ante 
conditionality requirements, i.e. making provision for a playing field which allowed for efficient implementation of programmes co-
financed with EU funds. These conditions entailed the need to ensure an appropriate strategic framework for investment priorities.  

The objectives of the rail projects implemented under the 2014-20 IEOP dovetail with the objectives defined in European and 
national strategy documents. These include: 

 

 

improving freight and passenger transport services;  

increasing capacity of railway lines; 

  making rail transport more accessible; 

 

improving safety of rail traffic, passengers, freight and road traffic at level crossings. 

The investments currently being implemented in Poland include projects which contribute to the development of a more competitive 
and efficient rail freight transport system on major freight corridors (e.g. C-E 65), including improved rail access to seaports. The 
following projects being implemented by PKP PLK S.A. are examples of this type of investment: 

1.  Work on an alternative link between Bydgoszcz and the Tricity, phase 1 Gdynia Główna - Kościerzyna; 

2.  Work on an alternative link between Bydgoszcz and the Tricity, phase 1I Maksymilianowo - Kościerzyna; 

242 

 
 
In the 2014-20 planning period work is continuing on the project to improve railway access to the Port of Gdańsk (bridge + twin-
track line) which was started as part of the 2007-13 IEOP. Completion of the project is scheduled for the fourth quarter of 2017.  

The project involves the modernisation of an 11 km stretch of line No 226 Pruszcz Gdański – Gdańsk Port Północny. It involves 
building new structures, networks and facilities and reconstructing existing ones. 

Its main objectives are: 

 

 

 

 

to reduce the length of rail transport at the expense of a slight increase in the cost of maritime transport; 

to reduce external transport costs by shifting freight consignments from road to rail; 

to save train drivers’ working time by eliminating delays; 

to make intermodal transport more attractive by reducing the costs of transporting goods. 

Implementing these projects will ensure that the line has the appropriate parameters and capacity, thereby facilitating the transport of 
goods to and from the port, which is located on the TEN-T core network. The Gdynia - Sopot - Gdańsk - Tczew stretch currently 
used for freight traffic is also heavily used by passenger traffic. Even minor disruption means major delays to freight trains. Further 
restrictions in movements of trains serving the port could result in carriers ceasing to use rail transport to handle consignments 
passing through the Port of Gdynia.  

A raft of investments to improve rail freight transport (in particular rail access to seaports) is also being carried out using Connecting 
Europe Facility (CEF) funds. 

In addition, funding of approximately PLN 1 billion has been earmarked for the development of intermodal transport under the 2014-
20 IEOP. 

Therefore investors can expect further improvements to logistical infrastructure in Poland. Within the framework of the ongoing call 
for tender in Measure 3.2 of the 2014-2020 IEOP, businesses can obtain EU funding for projects involving: 

 

 

 

 

the construction or reconstruction of intermodal terminals’ infrastructure, including dedicated road infrastructure, sidings or 
railway lines which link intermodal terminals with the road or rail network; 

the purchase or modernisation of equipment necessary for the operation of intermodal terminals, in particular cranes and 
other transhipment equipment and shunting locomotives; 

the purchase or modernisation of telematics and satellite systems for intermodal transport, and expenditure for the purpose of 
deploying them; 

the purchase or modernisation of rolling stock, including traction locomotives, and special carriages for intermodal transport 
(platforms). 

These investments are expected to facilitate integration of the various modes of the multi-modal transport system, which will make 

243 

 
 
logistical infrastructure more attractive to investors. 

They will reduce transit time and increase commercial speed, which will directly boost growth in rail freight and intermodal transport 
services. 

  Recommendation 7 – Selection, planning and management of projects 

a)  The Member States, together with the Commission, should improve coordination of rail investments to maximise efficiency 
and avoid fragmentation of work on rail networks. In that context, investments in rail freight corridors should be prioritised; 

b)  The Commission and the Member States should assess whether projects can contribute to the smoother operation and greater 
stability of the freight sector. Project applications should systematically incorporate quantitative targets for freight (e.g. 
targets for the quantity of transported goods, the number of freight trains, the average commercial speed of freight trains in 
relation to the maximum design speed, etc.). 

Re. a) According to the 2014-20 IEOP, EU funding will be targeted primarily on the following main rail corridors: E 20/C-E 20, E 
30/C-E 30, C-E 59, C-E 65, E-59 and E-75. In principle, investments will cover upgrading and renovation of existing railways within 
the TEN-T network used for passenger and freight transport while ensuring that the measures taken are fully compliant with the 
technical parameters required for rail infrastructure.  

Poland is taking action to improve coordination of rail investments with a view to maximising efficiency and avoiding fragmentation 
of work on rail networks. To a large extent, funding is going to projects implemented in rail freight corridors. 

Re b) When assessing funding applications, the following socio-economic effects are verified as part of the economic analysis of rail 
projects: 

  benefits in terms of time savings in freight transport; 

  benefits in terms of cost savings relating to pollution - the reduction in the environmental burden as a result of switching 

freight transport from road to rail, thereby reducing the number of vehicles on the roads; 

  benefits in terms of cost savings relating to climate change - as a result of work to renovate/modernise railways, freight 

traffic is transferred from the roads, thereby helping to reduce road haulage. Reducing road haulage results in lower CO2 
emissions, thereby limiting the costs of climate change caused by the vehicles. 

We also refer to Special Report No 12/ 2015 ‘The EU priority of promoting a knowledge-based rural economy has been affected by 
poor management of knowledge-transfer and advisory measures’ in which conclusions and recommendations were addressed to the 
Member States and the European Commission. 
 The conclusions and recommendations were reflected in the Commission’s description of measures M01 Knowledge transfer and 
information actions and M02 Advisory services, farm management and farm relief services in the 2014-20 RDP and in the 
mechanisms for implementing those measures.  

For measure M01 the scope of the knowledge transfer and information actions will be linked to individual 2014-20 RDP priorities  

244 

 
 
 These actions may include horizontal themes and themes dedicated to groups of beneficiaries. Training needs will be identified with 
the help of a ‘bottom-up’ system for collecting information in this sphere, allowing the subject area of actions to be matched more 
closely to the requirements of training participants and ensuring optimal targeting to the specific needs of beneficiaries. On the basis 
of the collected information, the Minister for Agriculture and Rural Development sets out the conditions governing the selection of 
beneficiaries - service providers. This includes specifying the target group for training, the subjects covered and the number of 
people to be trained. Under the conditions and procedure for granting aid, beneficiaries are selected in accordance with the rules of 
fair and transparent competition and they must have appropriate qualifications and experience in service provision. Verification of 
applications includes an examination of the reasonableness of costs. Provision has also been made for mechanisms for obtaining 
feedback on expectations and ensuring the quality of training. 

For Measure 02, the scope of advisory services is very broad. A ‘bottom-up’ system for collecting information in this sphere, 
allowing the subject area of actions to be matched more closely to the requirements of final beneficiaries of advisory services and 
ensuring optimal targeting to their specific needs, will help to identify the advice-related needs of farmers or forest owners (the final 
beneficiaries of advisory services). The beneficiaries of M02 are selected on the basis of public procurement law. The assumptions 
underpinning specific public procurement operations for the purpose of selecting beneficiaries draw on information on the advice-
related needs of final beneficiaries collected on a bottom-up basis. Effecting selections by way of public procurement is the best way 
of guaranteeing that beneficiaries are selected in accordance with the rules of fair and transparent competition and that the advisory 
bodies and the persons they employ to provide advisory services within the framework of this action (advisers) have appropriate 
qualifications and experience. In addition, public procurement ensures that the most economically advantageous tender, i.e. the one 
which represents the most advantageous balance between price and other criteria, i.e. qualitative and technical parameters, is 
selected. Provision has also been made for mechanisms for obtaining feedback on expectations and ensuring the quality of the 
advisory services taken up by final users. 

245 

 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Portugal 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

We have  established a series of verifications/checks that  are carried  out by the various  authorities in the  management  and control 
systems (managing authority, certifying authority and audit authority), including management, administrative and on-the-spot checks 
and checks by the certifying and audit authorities on systems and operations, all of which contribute to verifying the eligibility of 
expenditure and public procurement. 

In addition, there are guidelines covering these issues, including guidance for managing authorities on management checks (AD&C 
Rules,  No  2/2015),  which  also  cover  public  procurement.  The  managing  authorities  have  also  been  given  a  specific  checklist  for 
verifying compliance with Portuguese and Community rules. 

Note also that all the checks/audits have their own specific checklists. 

246 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

YES 

NO 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

As  regards  rural  development  investment  measures,  we  should  point  out  the  error  arising  from  insufficient  evaluation  of  the 
reasonableness  of  the  costs.  However,  because  of  its  formal  nature,  it  is  not  considered  a  quantifiable  error  in  the  ECA’s  control 
methodology. 

The  principal  error  occurring  with  rural  development  IACS  measures  is  non-compliance  with  commitments  according  to  control 
statistics. 

YES 

NO 

ineligible area 

Question 1.2.2 – Do you agree with the relative important of these error types? 

3.  Non-compliance 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

public 
with 
procurement rules 

Those mentioned above 

4.  Administrative 

error 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

We  have  created  instruments  to  simplify,  clarify  and  standardise  the  implementation  of various  measures.  These  tools  include  the 
relevant implementing legislation, guidelines and rules of procedure for beneficiaries and technical analysis, together with clear and 
objective information. 

The Portuguese authorities have drawn up an action plan for IACS measures to reduce these error rates. 

247 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Portugal systematically revises the parcel identification system (PIS) and land areas and uses on a four-yearly basis. 

In the specific case of areas with trees, an action plan has been drawn up to identify and exclude any ineligible areas. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

- the economic, social and territorial cohesion policy:  

Once Portugal has adopted its draft budget, the European Commission has at its disposal, for each physical indicator entered in the 
performance frameworks of the operational programmes, a description of the indicator that includes: a description of the indicator, 
the data source, the frequency of updates, the reasons for selection of the indicator, the indicative financial amount of the indicator 
for the priority and for the investment priority, and the assumptions used to set intermediate and final targets. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 

- the economic, social and territorial cohesion policy:  

248 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the 

data 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

The data on the performance-framework indicators that are sent to the European Commission each year in the annual reports on 
Implementation of the operational programmes are obtained from the information systems of the managing authorities. 
These indicators are all output indicators derived from the physical execution of the operations approved, so most calculations are 
done without the need for indirect assessments. 
Furthermore, national legislation provides for the establishment of results of operations in the form of agreed targets for output and 
result indicators, and these concur where possible with the indicators agreed with the European Commission for the OPs. The 
indicators reported by the managing authority are thus based on the scrutinised results of operations.  

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: By sending the reports to the bodies responsible for implementing the recommendations and following them up. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: By sending the reports to the bodies responsible for implementing the recommendations and following them up. 

249 

 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Romania 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

MDRAPFE, ACP: Yes; AA: No. 

AA: In the case of projects with ERDF funding, the most frequent error types in order of relative importance are as follows: 

1. Serious failure to respect public procurement rules 

2. Ineligible costs included in the expenditure declarations 

Where projects with ESF funding are concerned, the most frequent error types in order of relative importance are as follows: 

1. Ineligible costs included in the expenditure declarations 

2. Serious failure to respect public procurement rules       

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

AA:  The  AA  has  drawn  up  recommendations  as  part  of  the  system  audit  for  correcting  shortcomings  in  the  quality  of  first-level 
checks with a view to increasing the latter’s effectiveness and improving the internal control environment and working procedures 
for management verifications. Implementation of the recommendations is monitored in the follow-up missions. All this contributes in 
the long term to increasing financial discipline among those responsible for administering financial assistance, to lastingly reducing 
errors  in  the  spending  of  funds  provided  by  the  European  Union  and  to  improving  the  general  performance  of  the  national 

250 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
management and control system.    

ACP:  Unlike  in  the 2007-2013  programming  period,  when  the ACP’s  on-the-spot  verifications  were  focused  on  general  risks,  the 
additional verification procedure used in connection with expenditure declarations to the European Commission and applicable to the 
2014-2020 programming period is based on thematic verifications. In this case, the Public Procurement and Expenditure Eligibility 
themes cover the two major risks identified by the ECA (ineligible costs and non-compliance with public procurement rules). 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

AFIR, AA, ACP, AMPOPAM: Yes; APIA: No. 

APIA: Following the ECA audits carried out at APIA in connection with area-related rural development measures, no errors were 
identified. We therefore consider that the error in point 2 – overstated or ineligible area – has no basis.   

YES 

NO 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

YES 

NO 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

AMPOPAM: 

1. At the stage of verifying the conformity and eligibility of a funding application, the following aspects are checked: 

the  applicant  comes  within  the  category  of  eligible  beneficiaries  and  is  not  in  the  process  of  being  dissolved,  liquidated, 
- 
merged  or  reorganised.  For  this  purpose,  verification  is  made  of  ‘Recom  online’  /  Certificate  with  data  from  the  Register  of 

251 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Associations and Foundations and from the applicant’s instruments of incorporation. In addition, the Management Authority checks 
the insolvency bulletin on a daily basis; 

the  applicant  is  not  entered  in  the  debtors’  ledger  in  connection  with  amounts  outstanding  for  POP/POPAM  (Operational 

- 
Programme for Fisheries/ Operational Programme for Fisheries and Maritime Affairs); 

- 
the  activities  proposed  in  the  funding  application  are  listed  among  the  eligible  activities  in  the  Applicant's  Guide  for  the 
measure in question. In the event of ineligible activities’ being detected, it is requested that the budget for the project be corrected 
and the expenditure relating to the ineligible activities be included among the ineligible forms of expenditure. 

2. At various stages of the selection of funding requests or the monitoring of the contract, the following are checked: the aquaculture 
licence and the recent-information extract from the land register (issued no more than 30 days before the funding request is lodged), 
showing that the land and the buildings where the investment is to be made are free of any encumbrances. 

3. In accordance with the current legislation, the POPAM Management Authority checks the beneficiaries’ procurement process only 
ex  post  and  is  not  involved  on  an  ex-ante  basis,  the  ex  ante  check’s  being  carried  out  by  ANAP  (the  National  Agency  for  Public 
Procurement). After completing its check on acquisitions, the POPAM Management Authority checks all the acquisitions made by 
the beneficiaries and also examines any contractual changes made. In order to be reimbursed the expenditure relating to a purchase 
agreement,  both  public  and  private  beneficiaries  are  obliged 
the  procurement 
file/amendments/clarifications, which are checked using the ‘4-eyes’ system. Checks are made on whether the purchase was made in 
compliance with the applicable legislation and on whether the prices were reasonable. 

the  Management  Authority 

to  send 

  AA: The AA has drawn up recommendations in terms of the audit system for correcting shortcomings in the quality of first-level 
checks  with  a  view  to  increasing  the  latter’s  effectiveness  and  improving  the  internal  control  environment  and  the  working 
procedures  for,  in  particular,  assessing  and  selecting  projects  and  verifying  award  procedures.  The  recommendations  are 
implemented  in  the  follow-up  missions.  All  this  contributes  in  the  long  term  to  increasing  financial  discipline  among  those 
responsible  for  administering  financial  assistance,  to  lastingly  reducing  errors  in  the  spending  of  funds  provided  by  the  European 
Union and to improving the general performance of the national management and control system.  

   ACP: With reference to the European Maritime and Fisheries Fund: 

Unlike  in  the  2007-2013  programming  period,  when  the  ACP’s  on-the-spot  verifications  were  focused  on  general  risks,  the 
additional verification procedure used in connection with expenditure declarations to the European Commission and applicable to the 
2014-2020 programming period is based on thematic verifications. In this case, the ‘Evaluation and Selection’, ‘Public Procurement’ 
and  ‘Expenditure  Eligibility’  themes  cover  the  two  major  risks  identified  by  the  ECA  and  applicable  to  the  European  Fund  for 
Fisheries  and  Maritime  Affairs  (EMFF)  (ineligible  beneficiary,  activity,  project  or  expenditure,  and  non-compliance  with  public 
procurement rules). 

252 

 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

AA: Following the Commission’s findings presented in APIA’s annual reports on activities in Romania, an action plan was drawn up 
to reduce the error rates in connection with Integrated Administration and Control System (IACS) measures. The AA evaluates the 
measures taken by APIA and, in its annual certification report, reports to the Commission on the way in which the action plan has 
been implemented and on the stage reached by it. 

APIA: APIA has drawn up, and has forwarded to the European Commission, an action plan to reduce the error rate, established at 
above 2 %. This action plan includes measures to remedy the causes of the high level of errors, namely delays in updating the Land 
Parcel Identification System (LPIS) for implementing  the requirements of the new agricultural policy, and  mistakes in identifying 
and demarcating agricultural parcels declared by farmers. These measures relate to: 

- updating of total area of 41 860 km2 of orthophotos with reference to images from before 2013; 

- digitalising of physical blocks with a farmed area of 18 697 km2 with reference to orthophotos from before 2013; 

- updating of total area of 56 710 km2 on orthophotomap with reference to images acquired in 2013; 

- digitalising of physical blocks with a farmed area of 38 585 km2 with reference to orthophotos from before 2013; 

- updating of total area of 59 949 km2 on orthophotomap of images acquired in 2014; 

253 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- digitalising of physical blocks with a farmed area of 35 000 km2 with reference to orthophotos from before 2014; 

- updating the LPIS with the satellite images used to perform the 2016 remote sensing checks, partly so that LPIS QA might rectify 
the lack of orthophotos (carried out for 2017); 

- updating the LPIS with the satellite images used to perform the 2017 remote sensing checks, partly so that LPIS QA might rectify 
the lack of orthophotos; 

- updating the LPIS with information relating to set-asides for areas over 1 000 m2 obtained following the conclusion of a protocol 
between APIA and MADR; 

- updating the reference layer by land-use category for an area of approximately 80 000 km2;  

- increasing the efficiency of preliminary checks by: 

application during the process of submitting single payment requests;  

-  providing  clarifications  regarding  over-declarations  and  overlaps  generated  in  the  geospatial 

- handling over-declaration/overlap reports by means of clarifications from farmers in the matter 

of carrying out the preliminary check; 

- removing from the declared area those areas that are outside the limits of the physical block; 

- making on-site visits to help farmers identify agricultural parcels; 

- concluding cooperation protocols between APIA county centres and county/local councils  regarding the exchange of information 
on rental contracts for agricultural land administered by county/local councils; 

- predefining single payment requests with the results of on-the-spot checks;  

- providing all farmers with the vectorised and alphanumerical results of the traditional and remote-sensing checks; generating alert 
messages in the geospatial application if the parcel declared is demarcated differently to the parcel checked in the previous year; 

- holding information/training sessions on the use of information made available via the geospatial application. 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

AFIR: The programme monitoring system 

AM PNDR: The National Rural Development Programme is monitored and evaluated in accordance with Regulation (EU) No 
1303/2013 laying down common provisions on the European structural and investment funds (the Common Provisions Regulation), 
Regulation No 1305/2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) 
and repealing Council Regulation (EC) No 1698/2005, and Regulation No 808/2014 laying down the procedures for implementing 
Regulation No 1305/2013, which establishes detailed rules for applying the common framework for monitoring and evaluating rural 

254 

 
 
 
 
 
development policies. 

The Management Authority and AFIR establish indicators that will be used for monitoring the National Rural Development 
Programme in accordance with the Common Monitoring and Evaluation System. Thus, in order to show the extent to which the 
programme’s specific objectives and priorities have been met, financial indicators, output indicators, target indicators and indicators 
specific to the performance framework relating to measures under the National Rural Development Programme are collected and 
calculated. 

The main source of data for performance indicators is constituted by the electronic information systems – SPCDR and the Integrated 
Administration and Control System (IACS) – used for registering, storing, managing and reporting data relevant to the programme 
and the implementation thereof and to be found at, respectively, the two paying agencies, AFIR and APIA. 

The main sources of information for these data bases are the application forms (for funding and payment) and the 
contracts/commitments of beneficiaries. 

The types and sources of important evaluation data are as follows: 

• Monitoring data, including that for monitoring the results of the programme, is provided by the beneficiaries and institutions 
involved in the physical and financial implementation of the programme and is collected from sources identified in the guidance 
documents drawn up by the Commission in the context of the Common Monitoring and Evaluation System (CMES) (application for 
funding, application for payment, IACS, databases of the Paying Agency and of the supplier of training or consultancy services, etc.). 
Such monitoring data is collected and assembled in an APIA & AFIR database and in facilities peculiar to the management 
authorities and is forwarded to the central management authority.  

• The disaggregated data is collected from non-beneficiaries (for the control group/counterfactual analysis) and/or from samples 
representative of the sector (for the sectorial analysis) through regular surveys, including the Farm Structure Survey (ASA) and the 
survey of the Farm Accountancy Data Network (RICA), and using country-specific research). 

• The specific data is collected periodically, through the various bodies/ministries with different rural development priorities and 
areas of work. 

• The statistical data is used for contextualised sectorial analysis and assembled in accordance with EU requirements. The statistical 
data taken by management authorities from the bodies authorised to provide official data is used for evaluation purposes by said 
authorities. 

Data providers such as the INS and RICA are also involved in the Evaluation Coordination Committee, and they collaborate on an 
ongoing basis in the process of evaluating the National Rural Development Programme, meaning that there is an awareness of the 
need for data and information.  

- the economic, social and territorial cohesion policy:  

MDRAPFE: Where the ERDF, Cohesion Fund and ESF are concerned, what we understand by performance indicators are financial 

255 

 
 
indicators, included in the performance framework of the operational programmes, and output and result indicators referring to 
specific objectives. 

The data source in relation to the financial indicators included in the performance framework is the accounting system of the 
certification and payment authority. 

The data source in the case of output indicators and ESF result indicators comprises project beneficiaries who report data in 
accordance with the conditions of the funding contracts.  

The data sources for Cohesion Fund or ERDF result indicators comprise national or European statistics (INS and EUROSTAT) and, 
for a limited number of cases, administrative sources from relevant ministries. 

The process of collecting and processing data is based on metadata that has been drawn up for each indicator before implementation 
of the programme is proceeded with. Verifying the quality of the data is part of the system of verification and control of the 
operational programmes. 

Example: Management Authority for the Administrative Capacity Operational Programme (AM POCA): The main source from 
which data relating to output performance indicators is collected comprises the funding contracts signed by AM POCA. In the case 
both of the two financial indicators relating to the performance framework and of all the other POCA indicators, the source from 
which data is collected comprises the beneficiary of the POCA funding. Data is collected in principle from intermediate progress 
reports and from the final report, which accompany applications for reimbursement of expenses incurred by beneficiaries while the 
project is being implemented. The beneficiary’s obligation to provide this data is stated in the Applicant’s Guide and the funding 
contract plus related annexes. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

  AFIR : Reconciliation of the financial indicators with AFIR’s specialist departments  
  AM PNDR: To ensure the quality of the data and a uniform approach, procedures have been drawn up in both the payment agencies 
and the Management Authority for establishing monitoring indicators, staging posts and principles that need to be complied with for 
monitoring purposes and for collecting data, calculating indicators, analysing data and reporting results to the Management Authority 
for the National Rural Development Programme, to the Monitoring Committee and to the European Commission. Thus, in order to 
show the extent to which the programme’s specific objectives and priorities have been met, financial indicators, output indicators, 
target indicators and indicators specific to the performance framework relating to measures implemented by AFIR will be collected 
and calculated. There will also be centrally conducted verifications of whether projects have been classified according to priorities 
and areas of intervention, as described in the datasheets. Moreover, financial indicators (commitments, payments made) are verified 
through monthly and annual reconciliations carried out in conjunction with the specialist departments. 

 

- the economic, social and territorial cohesion policy:  

256 

 
 
 
 
 MDRAPFE: The process of collecting and processing data is based on metadata that has been drawn up for each indicator before 
implementation of the programme is proceeded with. Verifying the quality of the data is part of the system of verification and control 
of the operational programmes. 
• Example: - Management Authority for the Administrative Capacity Operational Programme (AM POCA): The quality of the 
performance-indicator data is ensured through AM POCA’s internal work procedures system, which is designed, on the one hand, to 
prevent insufficient or inadequate data from being received and, on the other, to enable qualitative analyses of the data to be 
conducted for the purpose of verifying its accuracy. 
• Tools made available to the beneficiaries who implement projects, such as ‘The Beneficiary’s Handbook’ or other useful 
information to be found on the Management Authority’s website www.poca.ro, are also used to prevent insufficient or inadequate 
data from being received. 
• Also very useful are the direct telephone line on which beneficiaries can put questions connected with the implementation of 
projects, and the contact details, made available to beneficiaries, of the AM POCA officer designated for monitoring the 
implementation of the projects contracted.  
• Through Axis 3 – Technical Assistance, AM POCA also periodically carries out training sessions for beneficiaries on all the 
implementation phases of a project – something that helps improve the quality of the data provided by beneficiaries. 
• Through the progress report on the implementation of the project activities, the data received is verified by project officers. The 
progress report that accompanies the application for reimbursement of expenditure is structured in such a way as to enable complete, 
high-quality data to be collected. This data is, firstly, checked on paper by the officer charged with validating expenditure in terms of 
its quality and its compliance with the requirements of the technical report on progress and in relation to the Annex on participants in 
training activities, and it is ensured that the expenditure is validated only if such expenditure helps achieve the relevant programme 
indicators. Secondly, the data is also checked in situ when monitoring visits are made for the purpose of helping beneficiaries 
implement projects.  
• All the data received is analysed for quality by programme monitoring officers who, on the basis of the information provided by 
beneficiaries in the progress reports and of information at the AM POCA unit where all the project contracts are stored, ensure that 
beneficiaries have correctly reported the project indicators for use in achieving the programme indicators. They are also in constant 
contact both with the project officers and the validating officers, the object being to address and correct situations likely to affect the 
quality of the data received from beneficiaries. 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

257 

Question 3 

Follow-up 
recommendations 
by 
formulated 

of 

the 

 
 
 
 
 
ECA 
in 
Reports 

its  Special 

Reply: APIA’s reply: Where possible, following the ECA’s final reports drawn up once the audit missions have been finalised, APIA 
refashions beneficiary payment files in which quantifiable or non-quantifiable errors have been detected and does so with a view to 
correcting errors pointed out by the ECA.  

AMPOPAM’s  reply:  The  Management  Authority  does  not  receive  the  reports  from  ECA  audit  missions  directly.  These  are 
forwarded to the Management Authority by the AA, and the replies concerning the implementation of the recommendations are also 
forwarded to the Authority. In accordance with the procedure for monitoring the implementation of the recommendations in the audit 
reports, the staff of the Programming, Methodology and Monitoring Department distribute the reports received to the bodies that are 
responsible for the aspects referred to and responsible for centralising the latter’s replies in order to forward them to the AA. If there 
are aspects with financial implications, the staff of the Audit Service launch the irregularities procedure for the aspects indicated in 
these reports and seek to recover any debts. 

AFIR’s reply: On DG AGRI’s recommendation, AFIR has drawn up an action plan for reducing the error rate. The plan covers the 
main shortcomings identified by the external auditors in their mission audits concerning compliance with the EU provisions and, in 
the  light  of  this  plan,  AFIR  proceeds  to  the  stage  of  implementing  the  recommendations  using  the  implementation  deadlines  and 
indicators envisaged for this stage. The plan is discussed and periodically updated with DG AGRI representatives in the framework 
of  bilateral  agreements.  An  action  plan  for  reducing  the  error  rate  was  last  submitted  to  the  European  Commission  in  September 
2017.  

AA’s reply: In the event of the ECA’s reports being of relevance to the activities of the AA, the latter identifies the internal measures 
it envisages taking. In the case of the ECA/European Commission recommendations concerning the funds’ management and control 
system and the expenditure declared for the projects financed from European funds  – recommendations not relating directly to the 
AA’s  activities  –  the  Audit  Authority  takes  account  of  the  findings  concerned  and,  to  the  extent  agreed,  reports  to  the  European 
Commission on the degree to which the recommendations have been implemented.  

MDRAPFE’s reply: The recommendations are taken into account in drawing up plans for the measures across national sector policies 
– measures towards which the recommendations are directed. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: AMPOPAM’s (Management Authority for the Operational Programme for Fisheries and Maritime Affairs’) reply: The 
Management Authority does not receive the reports from ECA audit missions directly. These are forwarded to the Management 
Authority by the AA, and the replies concerning the implementation of the recommendations are also forwarded to the Authority. In 
accordance with the procedure for monitoring the implementation of the recommendations in the audit reports, the staff of the 
Programming, Methodology and Monitoring Department distribute the reports received to the bodies that are responsible for the 

258 

 
 
 
 
 
aspects referred to and responsible for centralising the latter’s replies in order to forward them to the AA. If there are aspects with 
financial implications, the staff of the Audit Service duly launch the irregularities procedure for the aspects indicated in these reports 
and seek to recover any debts. 

AFIR’s reply: Such recommendations are implemented at programme level.  

AM PNDR’s reply: If the ECA recommendations addressed to the Member States also concern the National Rural Development 
Programme, account is taken of these, where appropriate, when modifying the programme or, if applicable, when implementing it.  

AA’s reply: The AA informs itself of the types of error presented each year in the DAS reports to the ECA and, according to the 
types of error, an analysis is carried out of the degree to which such error types relate to the management and control 
system/beneficiaries under the national operational programmes, taking account of the specific features of each individual country. If 
certain types of error stem from Romania, the intention is to make such error types known to the Audit Authority’s auditors when the 
various internal training sessions/working meetings are held.  

MDRAPFE’s reply: In preparing the Partnership Agreement and the Operational Programmes, account has been taken of the 
thematic concentration. 

259 

 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Slovakia 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Ministry of Transport and Construction: The management and control mechanisms for the OP Transport/OP II have been updated to 
prevent such errors. 

Ministry of the Economy: When implementing the OP Competitiveness and Economic Growth, corrective measures were taken in 
the  areas  at  issue,  including  alerting  staff  of  the  Managing  Authority/Intermediate  Body  under  the  Managing  Authority  to  errors, 
updating/developing  the  procedures  laid  down  in  the  management  documentation,  retraining/training  staff  (especially  in  checking 
public procurement procedures and payment requests and performing on-the-spot checks). 

A number of measures were taken during the 2007-2013 programming period to prevent errors in public procurement (training staff 
responsible for checking public procurement together with training and advice for beneficiaries, publishing and regularly updating 
information  on  the  most  frequent  errors  and  shortcomings  identified  during  checks  by  the  Managing  Authority  and  the  Public 
Procurement  Office  on  the  public  procurement  process  and  the  consequences  of  these  errors,  introducing  the  possibility  for 
beneficiaries  to  submit  public  procurement  documentation  for  ex  ante  assessment  before  its  publication,  introducing  a  condition 
whereby  public  procurement  procedures  for  a  project’s  main  activities  have  to  be  declared  when  a  grant  application  is  submitted, 
development  of  aids  for  applicants  in  the  form  of  a  public  procurement  checklist  and  other  methodological  guidelines  for 
beneficiaries), which have been followed up in the 2014-2020 programming period. The Managing Authority had already stepped up 

260 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
its  cooperation  with  the  Public  Procurement  Office  during  the  2007-2013  programming  period.  As  regards  the  eligibility  of 
expenditure,  the  Intermediate  Body  performs  a  100 %  administrative  check  and  an  on-the-spot  financial  check  under  Act  No 
357/2015 on financial control and internal auditing and amending certain acts (‘the Financial Control and Internal Auditing Act’), the 
latter with a view to obtaining the assurance that all documents presented and controlled during the administrative check are truthful, 
that goods, works and services have actually been supplied and that the project’s outputs/results have been achieved. 

Ministry of Agriculture and Rural Development: The following measures have been taken: working procedures for the performance 
of  administrative  and  on-the-spot  checks  have  been  adapted,  IT  systems  have  been  updated,  staff  have  been  trained,  applicants’ 
awareness of the most frequent errors has been raised (training, webpage), undue payments have been recovered. 

Ministry  of  Labour,  Social  Affairs  and  the  Family:  The  following  measures  have  been  taken:  an  emphasis  on  prevention 
(organisation of information sessions for beneficiaries), strict definition of the types of eligible expenditure, introduction of limits on 
expenditure, introduction of tools to simplify the declaration of expenditure (unit costs and a flat rate, which has led to a fall in the 
amount  of  ineligible  expenditure),  introduction  of  unannounced  on-the-spot  checks/inspections  at  beneficiaries’  premises, 
performance of an initial on-the-spot check during a project’s implementation phase, establishment of a coordination committee for 
cooperation  in  checking  public  procurement,  activity  of  a  working  group  for  cooperation  in  public  procurement,  establishment  of 
FAQs  for  public  procurement  and  publication  of  the  most  frequent  errors  in  the  public  procurement  process  on  the  Managing 
Authority’s webpage and publication of messages warning beneficiaries to fix the estimated value of a contract, introduction of ex 
ante  checks  on  projects  with  regard  to  the  proper  drafting  of  public  procurement  processes/procedures  and  the  admissibility  of 
delegating certain activities to third parties before the project is approved, introduction of an obligation for beneficiaries to draw up a 
schedule of public procurement under the approved programme for the purpose of verifying beneficiaries’ procurement procedures in 
the planned public procurement process in terms of the Public Procurement Act and achieving the project’s objectives, introduction 
of ex ante checks on above-limit contracts (beneficiaries have been informed of the obligation to submit draft public procurement 
notices and draft tender documents for above-limit contracts for ex ante checks and documents on the calculation of the estimated 
value of contracts for checks by the Managing Authority before the scheduled announcement of a public procurement procedure), 
introduction  of  an  administrative  check  on  the  quality  of  public  procurement  on  a  random  sample  of  six  public  procurement 
operations  from  the  list  of  own  records  of  checked  public  procurement  operations  at  least  once  every  six  calendar  months, 
introduction of repeat administrative checks on public procurement (e.g. on the basis of the results of on-the-spot checks, government 
audits, European Commission audits, etc.), introduction of on-the-spot checks on public procurement documentation. 

Ministry of Education, Science, Research and Sport: Training seminars and courses for Ministry staff, applicants and beneficiaries, 
issue of guidelines and instructions. 

Ministry of the Environment: As the OP Quality of Environment projects are financed by the Cohesion Fund, which is covered in the 
ECA’s 2016 Annual Report under the heading of ‘Economic, social, and territorial cohesion’, the steps taken by the Ministry of the 
Environment are set out in that section of this questionnaire. 

  As regards the eligibility of expenditure 

The provider performs a 100 % administrative check and, if necessary, an on-the-spot financial check under the Financial Control 

261 

 
 
and Internal Auditing Act, performing at least one on-the-spot financial check during the implementation of a project. The latter is 
normally performed on completion of a project so that all aspects of the project’s implementation can be checked. The purpose of an 
on-the-spot  financial  check  is  to  obtain  assurance  that  all  documents  presented  and  controlled  during  the  administrative  check  are 
truthful, that goods, works and services have actually been supplied and that the project’s outputs/results have been achieved. 

By organising training and providing advice on project and financial management for beneficiaries the provider fulfils the objective 
of  eliminating  beneficiaries’  errors  in  the  performance  of  their  obligations  under  grant  agreements,  thereby  preventing  ineligible 
expenditure as far upstream as possible. Training concerns, for instance, the quality of documents submitted on public procurement, 
payment requests, monitoring reports, etc. 

  As regards public procurement 

Managing authorities/intermediate bodies perform financial control of compliance with Slovak and EU rules when procuring goods, 
services, works and related procedures under the Financial Control Act, which covers checks on public procurement procedures for 
the award of contracts. Managing authorities/intermediate bodies are deepening their cooperation with the Public Procurement Office 
to improve the quality, reliability and effectiveness of public procurement checks. 

  General remarks concerning the ineligibility of beneficiaries and activities 

Under Article 125(4)(c) of the General Regulation and point 2 of Annex XIII thereto and on the strength of the experience acquired 
and  lessons  learned  from  the  2007-2013  programming  period,  a  systematic  approach  has  been  adopted  under  the  OP  Quality  of 
Environment  for  identifying,  assessing,  managing  and  monitoring  risks  that  could  adversely  affect  the  implementation  of  the  OP 
Quality of Environment and, ultimately, the achievement of its objectives. The OP Quality of Environment risk-management system 
serves as an early-warning system, which provides information on undue risks and suspicious circumstances pointing to irregularities 
and triggers action to reduce the identified risk to a minimum. Exchange of information/open communication is a key feature of this 
risk-management.  Risk-management  is  a  continuous  process,  which  is  performed  for  the  OP  Quality  of Environment  by  the  OP’s 
own risk-management  working group. A potential risk can be identified by any  member of staff. Where relevant,  the ARACHNE 
search and data-mining tool can also be used under the National Strategy for the Protection of EC Financial Interests in the SR, as 
amended, in order to identify projects that might be vulnerable to the risk of fraud, conflict of interests or irregularities. 

Office  of  the  Government:  Retraining  administrative  staff  and  alerting  them  to  errors,  ex  ante  checks  on  public  procurement, 
publication of most frequent errors in the public procurement process on the webpage, ex ante checks on applications and advice for 
beneficiaries, drafting of risk analyses for checks. 

262 

 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Ministry of Agriculture and Rural Development: The following measures have been taken: working procedures for the performance 
of administrative and on-the-spot checks have been adapted, IT systems have been updated, staff and applicants have been trained, 
information has been published on aid provided, questions and answers have been published, undue payments have been recovered. 

Ministry of the Environment: These error types tend not to concern the OP Quality of Environment. In the relevant cases, there is an 
overlap with the issues addressed in question 1.1, so the means of preventing errors are the same as those described in the answer to 
question 1.1.3. 

263 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

Ministry  of  Agriculture  and  Rural  Development:  The  following  measures  have  been  taken:  adapting  the  LPIS  register  and  IACS 
system, providing training and guidance for applicants, alerting applicants to the most frequent errors, recovering undue payments. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Ministry of Agriculture and Rural Development: The data necessary for monitoring project aid are collected at project level from the 
grant application and the monitoring reports for each project. Data on non-project aid under the RDP and direct payments are taken 
from the submitted applications in the IACS system. Data on the common market organisation needed for monitoring purposes are 
taken from applications for prior approval of measures and applications for the payment of aid after completion of a measure. Data 
on certain market organisation measures are also taken from reports on the effects of support and the fulfilment of the objectives 
specified in the application for support. Data on schools programmes and operational programmes run by the Ministry of Agriculture 
and Rural Development are also obtained each year from cooperating institutions (National Agricultural and Food Centre - Research 
Institute of Agriculture and Food Economics (NPPC-VÚEPP), the Public Health Authority, Ministry of Education, Science, 
Research and Sport). 

- the economic, social and territorial cohesion policy:  

Ministry of Transport and Construction: Under the OP Transport/OP II , the Ministry obtains most data for the OPs’ performance 

264 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
indicators from the ITMS/ITMS2014+ information systems and communicates with the Commission via the SFC system. 

Ministry of the Economy: As Intermediate Body for the Operational Programme Research and Innovation, the Ministry’s source of 
data concerning the OP’s indicators is the ITMS2014+ monitoring system. This system permits data to be collected and the relevant 
indicators for individual projects to be monitored. These data are automatically entered in the information system by monitoring.  

Ministry of Labour, Social Affairs and the Family For the years 2014-2016 data was collected manually from beneficiaries’ 
monitoring reports because work on the data-collection function in ITMS2014+ was still under way. This functionality is now 
available. 

Ministry of Education, Science, Research and Sport: Under the operational programmes managed by the Ministry, data for the OPs’ 
performance indicators are taken from the ITMS/ITMS2014+ information systems and other in-house sources. 

Ministry of the Environment: Under the OP Quality of Environment, the source of data for performance indicators (performance 
framework) is the ITMS2014+ monitoring system, an information system covering standardised programme and project management 
processes. Among other things, the system monitors, compiles and aggregates the relevant measurable indicators for projects up to 
programme level. Before it is approved, each project undertakes to meet a measurable indicator value (the ratio of the planned key 
indicator value to the amount of eligible projector expenditure is the aspect of evaluation that most affects the outcome of the 
project’s evaluation), which is fixed by the managing authority according to the activities supported. The managing authority also 
fixes a tolerance for deviation from actual fulfilment of the target value for the relevant measurement indicators from the plan. Data 
are fed into the IT system by regular monitoring of projects and monitoring reports. 

Central Coordination Body for the 2014-2020 programming period: At project level, these are the monitoring reports and additional 
monitoring data that form part of the payment requests drawn up by beneficiaries. At national level, they are the ITMS2014+ IT 
monitoring system and the annual reports on the operational programmes’ performance. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Ministry of Agriculture and Rural Development: Project aid: verification of the data in the grant application and monitoring reports 
for  each  project  is  subject  to  administrative  checks  and  the  key  information  on  operations  needed  for  monitoring  and  evaluation, 
including  key  information  on  each  beneficiary  and  project,  are  recorded  and  stored  electronically.  The  system  for  collecting, 
registering, checking and verifying data ensures that the data compiled are of sufficient quality. Data on non-project aid under the 
RDP and direct payments are taken from the submitted applications in the IACS system, which are subject to administrative checks 
and  on-the-spot  checks  and  are  used  for  calculating  aid.  In  the  case  of  the  common  market  organisation,  data  in  applications  are 
verified  by  an  administrative  check.  The  key  information  on  applicants,  the  measures  carried  out  and  payments  are  recorded  and 
stored electronically. Data are also verified by on-the-spot checks. 

- the economic, social and territorial cohesion policy:  
 Ministry of Transport and Construction:: The Ministry continuously monitors the fulfilment of performance indicators and take-up 

265 

 
 
 
of the operational programme (OP Transport/OP II) and includes these data in the annual report on an operational programme’s 
performance, which also includes an assessment of the performance framework. Data are taken largely from the ITMS/ITMS2014+. 
Data are also verified by on-the-spot checks. 
Ministry of the Economy: The quality of data provided to the Commission are verified by an administrative check. The data provided 
by beneficiaries in their regular monitoring reports are verified by on-the-spot financial checks to ensure their validity (e.g. 
employment contracts and social insurance records are checked when new jobs have been declared). 
Ministry of Labour, Social Affairs and the Family The basic implementation and monitoring rules for beneficiaries are laid down in a 
manual for beneficiaries, who also receive guidance from project managers at managing authorities/intermediate bodies, and data are 
verified during on-the-spot checks. Procedures at managing authorities/intermediate bodies are laid down in the ESIF management 
system for the 2014-2020 programming period and in the manual of procedures of the OP Human Resources managing 
authorities/intermediate bodies. 
Ministry of Education, Science, Research and Sport: The quality of data provided to the Commission are verified by an 
administrative check. Key information on applicants, measures taken and payments made are entered and stored electronically in the 
ITMS/ITMS2014+ information systems and other in-house records. Data are also verified by on-the-spot checks. 

Ministry of the Environment: Data in monitoring reports are verified by on-the-spot financial checks or by administrative checks on 
the documentation provided. Beneficiaries provide documentation on project monitoring at regular intervals, making it possible to 
monitor a project’s progress and, if need be, intervene in good time (assuming the situation is reversible). Outputs/achievements are 
subject to quality control by verifying the values for performance indicators. 

of 

YES 

NO 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: 

Ministry  of  Labour,  Social  Affairs  and  the  Family  For  the  purposes  of  the  recommendations  made  in  special  reports  (IZM  -  Nos 
3/2015  and  17/2015),  the  Centre  for  Labour,  Social  Affairs  and  the  Family  and  the  Social  Insurance  Agency  have  held  working 
meetings for the purpose of concluding an agreement on sharing data, which will also be used for monitoring the Youth Guarantee in 
Slovakia, enabling the situation of young people to be monitored six, 12 and 18 months after they accept an offer under the Youth 
Guarantee. This step will significantly reduce the high percentage of young people whose situation was unknown and make it easier 
to assess the sustainability of the results of individual measures taken to reduce unemployment among people under the age of 29. 

266 

Question 3 

Follow-up 
recommendations 
formulated 
by 
in 
ECA 
Reports 

the 
its  Special 

 
 
 
 
 
 
An addendum to the cooperation agreement between the Centre for Labour, Social Affairs and the Family and the Social Insurance 
Agency  was  concluded  in  November  2016.  The  first  output  of  monitoring  the  Youth  Guarantee  in  Slovakia,  which  included  data 
from the Social Insurance Agency, was delivered in February 2017. The delay was caused by the technically demanding nature of the 
process. 

Office of the Government: The ECA has proposed no specific measures for the OP Technical Assistance in its specific reports. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: 

Ministry of Agriculture and Rural Development: We are monitoring the ECA’s recommendations in its specific reports and taking 
them into account in the management and implementation system. Recommendations concerning the activities of the Paying Agency 
will be taken into account by adopting specific measures. 

Office of the Government: We are monitoring the ECA’s recommendations in its specific reports and taking them into account in the 
management and implementation system. The following measures will be taken on the basis of the recommendations: retraining 
administrative staff and alerting them to errors, ex ante checks on public procurement, publication of most frequent errors in the 
public procurement process on the webpage, ex ante checks on applications and advice for beneficiaries, drafting of risk analyses for 
checks. 

267 

 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

Slovenia 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Reply of the Ministry of Infrastructure (MZI): As IB, the MZI carries out: 100 % of administrative verification before certification of 
claims and on-the-spot checks; checks on how public procurement procedures are implemented before certification of the first claim, 
as well as checks of public procurement procedures for every annex; MZI staff take part in various forms of training within these 
areas. 

MF-CA reply: 

a) The issuing of instructions for the recovery of designated EU funds for the 2014-2020 programming period, version 02/2017, No 
544-18/2017/,  by  the  Ministry  of  Finance  (MF).  These  instructions  define  the  practices  and  procedures  for  the  repayment  of 
designated  EU  funds  in  case  of  identified  ineligible  expenditure  of  these  funds  They  apply  to  all  stakeholders  involved  in  the 
implementation of the Operational Programme for the implementation of European Cohesion Policy for the 2014-2020 programming 
period for the investment for growth and jobs objective. (MF SUSEU/CA) 

b)  The  establishment  of  the  new  Certifying  Authority  accounting  system  (eCA),  which  is  used  for  data  controls  in  the  submitted 
claims  for  payment  from  EU  funds,  to  maintain  accounting  records  of  claims  submitted  to  the  EC,  and  to  manage  EU-fund 
reimbursements  to  the  national  budget.  Incorporated  into  the  application  are  the  EC  rules  and  requirements  that  are  essential  for 

268 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
verifying expenditure and the CA controls used to detect any irregularities before payment claims and accounts are submitted to the 
Commission. 

Reply of the Government Office for Development and European Cohesion Policy (SVRK): Clear instructions on the implementation 
of checklist-based management verifications, the use of various publicly available tools for mining (e.g. Gwin), carrying out on-the-
spot  checks  in  the  earliest  possible  stage  of  the  operation  (and  repeating  them  for  larger  operations),  the  verification  of  the  tasks 
delegated to the intermediate bodies (IB), cooperation with the IBs in the event of uncertainties or difficulties in implementing the 
administrative verifications  

Reply of the Ministry of Labour, Family, Social Affairs and Equal Opportunities (MDDSZ):  

Before any operations are implemented, the MDDSZ carried out a risk analysis and produced additional measures to prevent errors. 
In some cases it carried out unannounced visits to beneficiaries to verify the implementation of planned activities and  - to prevent 
double funding - it checked individual beneficiaries’ eligible costs under both the ESF and other sources of funding. In case of errors, 
the MDDSZ orders beneficiaries to return any unduly received funds. 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

3.  Non-compliance 

with 

public 

Reply  of  the  Ministry  of  Agriculture,  Forestry  and  Food  (MKGP):  At  the  MKGP,  which  carries  out  the  tasks  of  the  Managing 
Authority  (MA)  for  the  2014-2020  Rural  Development  Programme,  a  special  group  was  appointed  by  the  competent  minister  to 
reduce  the  error  rate  in  the  implementation  of  measures  from  the  rural  development  programme  as  far  back  as  2010  and  it  has 

269 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
procurement rules 

4.  Administrative 

error 

continued its work during the 2014-2020 programming period. The Group is very active and on the basis of errors identified by the 
MKGP (which it also reports annually as part of the mandatory statistics to the European Commission — DG AGRI) and analyses of 
the  causes  of  errors,  it  draws  up  action  plans  and/or  individual  measures  to  reduce  the  incidence  of  errors.  The  error  rate  in  the 
implementation  of  the  measures  of  the  Rural  Development  Programme  had  decreased  significantly  by  the  end  of  2013.  The  key 
measures to reduce the error rate were more information provision to beneficiaries (workshops, seminars) about the most common 
causes of errors related to eligibility conditions and a reduction in the amount of sanctions in the case of non-compliance with other 
obligations. It is significant that the Group reduces the error rate through continuous and up-to-date monitoring of operating errors 
and what causes them.  

The latest meeting of this Group was this week. We find the error rate in 2016 (reported 15.7.2017) to be within manageable bounds, 
we  have  also  taken  measures  to  retain  a  manageable  error  percentage  through  enhanced  information  provision  to  beneficiaries 
implementing agri-environmental and climate measures, organic farming and the LEADER measure. 

Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

3.  Administrative 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

error 

MKGP Reply: In 2017, the MKGP Error Rate Reduction Group, set up to monitor and reduce the error rate for Rural Development 
Programme measures in 2017, extended its work to all CAP measures whose entitlement is area-linked. This month we addressed 
errors for individual direct payment schemes in 2016 and found that certain schemes required additional information to ensure that 

270 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
obligations were properly fulfilled. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

- the economic, social and territorial cohesion policy:  

MZI reply: Data on OP ECP (Operational Programme for the implementation of European Cohesion Policy) indicators are obtained 
on the basis of regular half-yearly reports by beneficiaries that are sent to the MZI (as an Intermediate Body) for all directly approved 
OP ECP operations. On this basis, the data are aggregated and forwarded to the MA for further processing and transmission to the 
European Commission.  

SVRK Reply: Following approved tenders and directly approved operations, the MA currently adds the performance framework 
indicators to its information system (IS) when it certifies the instruments. Annual monitoring of outputs currently takes place such 
that that the MA obtains information from the individual intermediate bodies responsible for implementation of individual 
instruments. The MA has drawn up special tables, with timelines and indicator descriptions, in accordance with the Operational 
Programme and the Monitoring and Evaluation Plan prepared by its offices. A new special module for monitoring and reporting is 
being prepared, which will allow data to be monitored at least twice a year to enable intermediate bodies to enter data to the 
instruments effectiveness module. We expect the module to be in place in the course of 2018. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

- the economic, social and territorial cohesion policy:  
MZI reply: To ensure that the information provided is true, correct and complete, the beneficiary’s project manager - with the support 
of an engineer - daily manages and monitors the implementation of works and reports on them to the Intermediate Body (the MZI). 
Output indicators are checked and monitored by the intermediate body on-the-spot and on the basis of operating licences issued for 
operations. For programme-specific result indicators, such as reducing the time and cost of implementing operations, the beneficiary 
orders an analysis, which is used to calculate achievement of the indicators. The veracity and regularity of meeting the financial 
indicator requirements is ensured by conducting 100 % administrative checks on all intermediate body operations. 

SVRK Reply: We ensure data is correct and high quality by ensuring that intermediate bodies receive clear guidance on reporting 
and that when communicating with them we verify that they understand the content and method of measuring an indicator. It is vital 

271 

 
 
 
 
 
 
that indicators are understood in the same way in the implementation phase as in the phase of preparation and approval by the CA 
and that there is regular communication between the MA and intermediate body on indicator monitoring and reporting.  

Question 3 

YES 

NO 

of 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply:MKGP Reply: The MKGP very seriously examines ECA audit findings related to audits carried out in Slovenia or in other 
Member States relating to the contents of Chapter 2 — Natural Resources (CAP and CFP) and verifies how the recommendations are 
taken into account and included in procedures. We also take ECA findings and recommendations into account during the drawing up 
of  the  Rural  Development  Programme  and  the  adoption  of  national  implementing  regulations  for  the  implementation  of  the  CAP. 
The  MKGP  has  prescribed  a  compulsory  form  summarising  the  ECA’s  essential  findings  on  agriculture  and  rural  development, 
which must be used during the coordination phase for any national provisions in this area. The form requires a clear statement of how 
the (new) arrangements will take ECA recommendations into account. 

SVRK Reply: In the light of the ECA’s findings from the audits carried  out in Slovenia for Objective 1, the MA has updated and 
corrected its instructions, manuals, checklists and reported these measures to the ECA, as well as the European Commission. In cases 
where the findings had financial consequences, the MA implemented corrective measures — either at the system or beneficiary level 
—  depending  on  the  nature  of  the  audit  findings.  The  MA  took  these  experiences  into  account  when  drawing  up  instructions  for 
2014-2020 financial perspective. 

MDDSZ Reply: There are no specific recommendations relating to the MDDSZ, however, we accept the general recommendations. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: SVRK Reply: In relation to taking into account the ECA recommendations for Slovenia in the preparation of the Partnership 
Agreement/Operational Programme during the drawing up of both documents, there was no indication (from the European 
Commission or from the MA or competent ministries) that there was a specific recommendation concerning Slovenia alone. During 
the drawing of the two documents, we did not therefore specifically take any such recommendation into account. 

MDDSZ Reply: There are no specific recommendations relating to the MDDSZ, however, we accept the general recommendations. 

272 

 
 
 
 
 
 
 
 
 
 
Spain 

YES 

NO 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

ERDF: Yes; ESF: No. 

The most common types of error relating to the ESF in Spain are, in order of importance: 

- Ineligible costs included in the expenditure declarations; 

- Ineligible projects/activities or beneficiaries; 

- Failure to maintain compliance with the conditions of the aid. 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

YES 

NO 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

273 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ERDF. 

A new eligibility order has been approved for the ERDF. Training has been stepped up in this area, in both the specific and general 
courses relating to the ERDF. The approval of the new Law on Public Procurement, which transposes the new Directives, should also 
help  improve  public  procurement  and  reduce  irregularities.  The  MA  assessed  the  capacities  of  the  Intermediate  Bodies  before 
allocating tasks to them, paying particular attention to staff training on checks to identify possible irregularities. In the management 
and control systems, efforts have been made to enhance quality checks and internal  monitoring within the bodies that manage the 
ERDF, and a number of upstream checks have been put in place (tender documents, simplified costs). 

ESF.  

For the 2014-2020 MFF, having learnt lessons from the previous period, a number of actions and procedures have been put in place 
within the ESF management and control systems. These include: 

- Entering into a contract for the provision of technical assistance to carry out quality checks on the managing authority. 

- Reducing the compliance periods for the conditions for receiving the aid. 

- Enhancing guidance for and the training of managers and staff working for the managing and certifying authorities, intermediate 
bodies and beneficiaries. 

A  number  of  general  and  specific  training  days  have  been  held  focusing  on  risk  management  and  fraud  prevention,  and 
simplification. 

- Incorporating risk-assessment procedures into all operations, which will establish risk-mitigation checks for risk and fraud alerts, as 
well as checklists to be included with the supporting documents when submitting projects and/or operations for co-financing. 

- Stepping up quality-control checks for all operations, based on the level of risk, to be carried out by the managing authority before 
the operations are certified.  

-  Categorising  the  intermediate  bodies  based  on  the  outcome  of  system  audits  and  checks  on  operations.  Where  appropriate,  this 
categorisation will involve more wide-ranging checks. 

- Drawing up and disseminating a guide to using simplified cost methods to facilitate their use by intermediate bodies. Furthermore, 
the managing authority has worked directly with the beneficiaries of the operations that it selected to develop simplification methods 
to  be  used  in  each  operation.  Work  is  also  ongoing  with  the  Commission  to  create  simplified  cost  methods  approved  by  the 
Commission; if appropriate, these may be approved by delegated acts. 

YES 

NO 

Question 1.2.1 – Do you agree that these are the most common error types? 

274 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
If you do not agree, then please describe other major error types:  

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

YES 

NO 

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Improvements  to  the  declaration  process  (mandatory  declaration  and  approvals)  and  dissemination  efforts;  Improved  control 
procedures; Improvements to IT systems; Improvements to the Land Parcel Identification System; Improvements to national  rules 
and guidelines. 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

275 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

2.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

3.  Administrative 

error 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.3.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

Improvements  to  the  declaration  process  (mandatory  declaration  and  approvals)  and  dissemination  efforts;  Improved  control 
procedures; Improvements to IT systems; Improvements to the Land Parcel Identification System; Improvements to national  rules 
and guidelines. 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Declarations from farmers, statistics from the Integrated Administration and Control System (IACS) and non-IACS statistics, 
payment details, data from the database of basic payment entitlements, data from the Land Parcel Identification System. 

- the economic, social and territorial cohesion policy:  

ERDF. National Institute of Statistics (INE), regional institutes of statistics, public bodies responsible for sector-related policies at 
national and/or regional level. 

ESF. Direct monitoring of the microdata gathered in each activity co-financed by the ESF, making reference to the situation of the 
participants once they have concluded or abandoned the activities. Optionally, employment registers can be used to check their 
employment situation. 

276 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
the 
for 
data 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

This data is checked systematically by the Certifying Body. 

- the economic, social and territorial cohesion policy:  
ERDF. Official and public data sources have been chosen. 

ESF. Before entering into co-financed actions, an analysis is carried out of the microdata taken from the individual databases 
recording the changing situation of the participant.  
Furthermore, official employment data taken from the Employment Service register are used, showing the participants’ employment 
record. 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply:  ERDF.  As  regards  the  ERDF,  Spain  has  created  a  programming  structure  in  which  the  OPs’  axes  match  the  Thematic 
Objectives, which makes it significantly easier to check compliance with the thematic concentration requirements. 

Whenever the operational programmes are rescheduled, Spain reviews compliance with the thematic concentration at Member State 
level, so as to ensure that the programme continues to comply with this requirement. As part of the 2017 Technical Review, a new 
version of the Association Agreement is being drawn up, which will include the new ERDF allocations for each Thematic Objective, 
so that checks can be carried out on compliance with the concentration requirements. This detailed information has been sent to the 
European Commission.  

There are certain exceptions, such as the Urban Axis, which is broken down into four Thematic Objectives, two of which (TO2 and 
TO4) are in the concentration. However, the Urban Axis represents only a small proportion of the overall programme and it can also 
be broken down in order to check the concentration requirements. Furthermore, a range of reference values has also been set for each 
of its thematic objectives. 

ESF. During the financial and territorial planning process for the cohesion funds, the managers of the ESF and the other funds send 
their proposed financial data to the DG for EU Funding in the Ministry of Finance and Public Administration. This DG collects and 

277 

 
 
 
 
 
 
 
 
 
compiles all the financial information. After making the necessary adjustments to ensure compliance with the thematic concentration 
criteria, it then sends this data to the Commission, which confirms compliance. Once they have been approved, each Fund submits its 
financial tables and sends them to the Commission through SFC. 

For  the  ESF,  the  application  created  to  manage  and  monitor  the  ESF  in  the  2014-2020  MFF  includes  approvals;  as  a  result, 
compliance  with  the  thematic  concentration  requirements  is  ensured  during  both  the  planning  and  the  monitoring  phases  of  the 
operational programmes. 

EAFRD and EAGF. This work is carried out by the coordinating body (FEGA). Recommendations are set out in national law (Royal 
Decrees)  and  in  guidelines  (coordination  circulars).  They  are  also  discussed  at  regular  meetings  with  the  paying  agencies 
(Coordination Groups). They are also checked with the European Commission during the various clearance of accounts procedures 
resulting from its audit visits. 

YES 

NO 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: ERDF. As regards the ERDF, Spain has created a programming structure in which the OPs’ axes match the Thematic 
Objectives, which makes it significantly easier to check compliance with the thematic concentration requirements. 

Whenever the operational programmes are rescheduled, Spain reviews compliance with the thematic concentration at Member State 
level, so as to ensure that the programme continues to comply with this requirement. As part of the 2017 Technical Review, a new 
version of the Association Agreement is being drawn up, which will include the new ERDF allocations for each Thematic Objective, 
so that checks can be carried out on compliance with the concentration requirements. This detailed information has been sent to the 
European Commission.  

There are certain exceptions, such as the Urban Axis, which is broken down into four Thematic Objectives, two of which (TO2 and 
TO4) are in the concentration. However, the Urban Axis represents only a small proportion of the overall programme and it can also 
be broken down in order to check the concentration requirements. Furthermore, a range of predefined reference values has also been 
set for each of its thematic objectives. 

ESF. During the financial and territorial planning process for the cohesion funds, the managers of the ESF and the other funds send 
their proposed financial data to the DG for EU Funding in the Ministry of Finance and Public Administration. This DG collects and 
compiles all the financial information. After making the necessary adjustments to ensure compliance with the thematic concentration 
criteria, it then sends this data to the Commission, which confirms compliance. Once they have been approved, each Fund submits its 
financial tables and sends them to the Commission through SFC. 

For the ESF, the application created to manage and monitor the ESF in the 2014-2020 MFF includes approvals; as a result, 

278 

 
 
 
 
 
compliance with the thematic concentration requirements is ensured during both the planning and the monitoring phases of the 
operational programmes. 

EAFRD and EAGF: This work is carried out by the coordinating body (FEGA). Recommendations are set out in national law (Royal 
Decrees) and in guidelines (coordination circulars). They are also discussed at regular meetings with the paying agencies 
(Coordination Groups). When the recommendation relating to a given Member State could affect the Spanish paying agencies, the 
issue is brought before the FEGA and discussed in the relevant Coordination Group. 

279 

 
 
 
 
Sweden 

Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
respect 
public 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

YES 

NO 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

The types of error described are probably common in a European perspective. The Swedish ESF Council, over time, has taken action 
to prevent such errors occurring. Due to this improvement work, very low error rates have been detected in recent years. The error 
types described are regarded as common in the RDF but we have had very low error rates in recent years. We think that the low error 
rates are a result of our proactive work to prevent the error types described. 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

Measures undertaken by the ESF Council to prevent errors are information and training actions and the development of guidelines, 
procedures  and  templates.  To  prevent  errors  within  the  RDF,  a  management  and  control  system  has  been  created  which  has  been 
approved by the Swedish Financial Supervisory Authority (ESV). Smaller amounts have been itemised in the expenditure reports and 
they are linked to the ESV’s observations. The observations are very small (error rate of 0.6%), which indicates that the management 
and  control  system  works.  No  new  measures  have  been  undertaken  in  2017.  No  serious  instances  of  non-compliance  with  public 
procurement rules have been identified and there is no suspicion that such are occurring. No further action has been taken, therefore. 

280 

 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

1.  Ineligible 

Question 1.2.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

public 
with 
procurement rules 

4.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

An  effort  to  produce  simpler  rules  and  the  review  and  improvement  of  rules,  so  that  desk  officers  can  guide  applicants  properly. 
Clear communication to applicants in the programmes, implementation of e-services, other electronic tools and checks, training of 
desk officers when procedures are updated and new rules produced, implementation of simplified cost alternatives, and will increase 
this if the rules admit it, benchmarking work in relation to other funds in the funds coordination work concerning the interpretation of 
joint rules. 

281 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

2.  Ineligible 

Question 1.3.2 – Do you agree with the relative important of these error types? 

beneficiary, 
activity, project or 
expenditure  

3.  Administrative 

error 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

The  order  is  correct  if  we  look  only  at  how  often  the  errors  occur.  The  Swedish  Board  of  Agriculture,  however,  finds  it  more 
problematic if aid is disbursed despite total or major lack of eligibility for the activity, project or expenditure, compared with when 
aid is paid despite small parts of an area not being managed entirely according to the conditions. 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

It should be easy to get it right. A system of electronic applications with pre-completed information and automatic checks leads to 
substantially  fewer  errors  than  manual  processing.  We  put  a  lot  of  effort  into  using  clear  language  in  all  communication,  so  that 
applicants understand what they are entitled to and need to do. We strive to make the rules as simple and clear as possible and that 
they will be regarded as reasonable and relevant. 

Question 2.1 

- the common agricultural policy:  

the 
Please  describe 
main  sources  of  data 
for 
the  performance 
indicators you provide 
to  the  Commission  in 
the areas of: 

Project and business support and environmental investments  

The beneficiary answers questions in the e-service, in both the application and on final payment, which generate the performance 
indicators. Some indicators are registered by the desk officer in the Board of Agriculture’s FLIT system. All data is then read over to 
the BoA’s data store BLIS, where the indicators are extracted.  

Context indicators are taken from Eurostat.  

282 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Environmental aid, compensatory aid, organic production, animal welfare compensation  

Beneficiaries register their applications in the e-service SAM internet. The aid forms are then managed in the databases in which 
information for reporting is gathered. The main databases used are Ararat and Gerd, which were developed earlier, and Jorden which 
is new for the current programming period. All data are then read over to BLIS, where the indicators are extracted.  

Context indicators are taken from Eurostat. 

- the economic, social and territorial cohesion policy:  

Social Fund: The immediate performance indicators are based on reports from the projects and the long-term ones are based on 
questionnaires to participants.  

Regional Fund: Statistics Sweden and the government-run Agency for Growth Policy Analysis. 

Question 2.2 

- the common agricultural policy:  

Please  describe  how 
you  ensure  that  the 
data 
the 
for 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

BLIS is a data store which is used to bring together different data sources. The system administrator for BLIS works together with 
analysts to produce data for the performance indicators. Lists of cases within the reporting are produced to check the data. The lists 
are systematically checked against the source systems to ensure that the correct figures are included.   

- the economic, social and territorial cohesion policy:  
Social Fund: Performance indicators are produced in cooperation with Statistics Sweden, and their quality procedures are used. There 
is also a feedback procedure to project managers in which participant reports and other reports from the projects are checked against 
each other.  

Regional Fund: We rely on the specialist agencies, which produce the performance indicator outputs. The performance indicators 
selected in the programmes are those which Sweden has used earlier, and which were produced using a clear definition for the 
calculation of outputs. 

283 

 
 
 
 
 
 
 
 
 
 
 
Question 3 

YES 

NO 

of 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply:  Usual  procedures  from  the  MA  if  the  if  Sweden  is  audited.  Otherwise,  Council  conclusions  are  dealt  with  in  the  Council 
working groups. The paying authority follows up audit comments irrespective of which body carried out the audit.  

The  BoA  has  a  programme  management  forum  which  deals  with  recommendations  from  different  reports  when  they  see  the 
effectiveness of support from the Rural programme, the maritime and fisheries programme and the regional development and social 
fund programme for community-led local development. 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: The Social Fund uses information to prevent errors via training, information and templates. 

The Regional Fund follows up Recommendations and uses them on a more strategic level to improve the management and control 
system and to work more proactively to prevent errors from arising. 

Common Agricultural Policy: no follow-up takes place. This is because the view is that there are no opportunities for prioritisation. 

YES 

NO 

284 

 
 
 
 
 
 
 
 
 
 
 
 
Question 1.1 

Economic, social and 
territorial cohesion 

The most typical error 
types in diminishing 
order of importance 
are: 

  Ineligible 
included 
expenditure 
declarations 

in 

costs 
the 

  Serious  failure  to 
public 
respect 
procurement rules 

  Ineligible 

project/activities 
or beneficiaries 

United Kingdom 

Question 1.1.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.1.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Reflecting  their  different  circumstances,    different  Managing  Authorities  across  the  UK  had  different  views  on  the  relative 
importance of these error types: 

England ESF Managing Authority: 

1. Ineligible costs included in the expenditure declarations,  

2. Ineligible project/activities or beneficiaries,  

3. Serious failure to respect public procurement rules 

Department of Communities and Local Government (England ERDF MA):  

The highest rate of errors is in the area of procurement.  

Welsh and Scottish Governments:  

1.Serious failure to respect public procurement rules;  

2. Ineligible costs included in the expenditure declarations;  

3. Ineligible project/activities or beneficiaries 

Northern Ireland Department of Finance:  

285 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.Serious failure to respect public procurement rules;  

2. Ineligible costs included in the expenditure declarations;  

3. Ineligible project/activities or beneficiaries 

Question 1.1.3 – Please describe actions you have taken to prevent such errors: 

England ESF Managing Authority:  

Training    for  all  MA  staff  with  all  regulations  and  procedures  for  Beneficiaries  covered  by    detailed  guidance  and  subject  to  the 
MA’s contract management and compliance regimes – majority of procurement is via the governmental CFOs who have their own 
national procurement regimes and standards in-built  

Department of Communities and Local Government (England ERDF MA):  

1. Guidance published on procurement for applicants  

2. Set up a network of ERDF delivery personnel to ensure consistency in treatment of projects. 

Welsh Government:  

1. provision of training,  

2. comprehensive guidance on WEFO’s “Rules” covering these topics 

3. periodic workshops discussing common issues/themes and promoting good practice. 

4. appointment of an internal procurement expert to provide advice and guidance to MA staff. 

Scottish government:  

Changes  were  made  when  developing  the  2014-2020  programmes,  including  fewer,  larger  operations;  larger  delivery  agents  with 
increased capacity; moves towards SCOs; pre-payment checks; risk assessment and risk based checking systems. 

Northern Ireland Department of Finance:  

1. Provision of Training, guidance  

2. Insisting on the use of  NI central Government’s  centre of procurement  excellence  for procurement  exercises  undertaken within 
certain Measures. 

286 

 
 
 
Question 1.2.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types:  

YES 

NO 

YES 

NO 

Question 1.2.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types:  

Question 1.2.3 – Please describe actions you have taken to prevent such errors: 

Proactive  Land  Change  Detection;  training;  ongoing  communications  with  customers  to  reiterate  the  requirement  for  accuracy  in 
declarations; application of Key and Ancillary controls; scrutiny of all applications and claims; Robust OTSC and Admin checks; 
Guidance and advice to applicants/beneficiaries on scheme requirements. 

Question 1.2 

Rural development, 
the environment, 
climate action and 
fisheries 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

2.  Overstated 

or 

ineligible area 

3.  Non-compliance 

with 
public 
procurement rules 

4.  Administrative 

error 

287 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 1.3 

EAGF 

The most typical error 
types in diminishing 
order of importance 
are: 

1.  Overstated 

or 

ineligible area 

2.  Ineligible 

beneficiary, 
activity, project or 
expenditure  

3.  Administrative 

error 

Question 1.3.1 – Do you agree that these are the most common error types? 

If you do not agree, then please describe other major error types: 

YES 

NO 

YES 

NO 

Question 1.3.2 – Do you agree with the relative important of these error types? 

If you do not agree, then please indicate your perception of the order of importance of the most common error types: 

Question 1.3.3 – Please describe actions you have taken to prevent such errors: 

Proactive Land Change Detection; improved guidance to customers; internal training; investment in land management controls e.g. 
EFA layer; continued to encourage on-line take up; verification checks of paper claims to mirror system based preliminary warnings 
when  data  is  missing  or  incorrect;  Use  of  LPIS;  robust  OTSC  and  administrative  checks;  advice  and  guidance  to  applicants  on 
scheme rules. 

Question 2.1 

- the common agricultural policy:  

Please  describe 
the 
main  sources  of  data 
the  performance 
for 
indicators you provide 
to  the  Commission  in 
the areas of: 

Paying Agency claim management system and payment system information; information held on Paying Agency system registers 
(Land Parcel Identification System; Entitlement Register; Customer Register).  Annual Implementation Report; Annual Control 
Statistics. 

- the economic, social and territorial cohesion policy:  

Management Information returns 

Intermediate Bodies 

288 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Question 2.2 

- the common agricultural policy:  

Sample checks against claim information; checks to ensure data is consistent with other reports; checks against regulatory thresholds 
(to identify potential anomalies); administrative checks and QA checks undertaken on data. 

- the economic, social and territorial cohesion policy:  
review of source data/ use of ILO definitions of unemployment/economic activity and carry out independent verification exercises 
unless Office of national statistics are available to evidence activity  

Please  describe  how 
you  ensure  that  the 
the 
for 
data 
performance 
indicators you provide 
to the Commission are 
of  sufficient  quality  in 
the areas of: 

Question 3 

of 

YES 

NO 

Follow-up 
recommendations 
formulated 
by 
ECA 
in 
Reports 

the 
its  Special 

Question 3.1 – Do you follow up recommendations addressed by the ECA specifically 
to your country? 

Reply: England ESF Managing Authority : If Applicable we would  ensure that all necessary actions are taken to implement  ECA 
recommendations. 

Northern  Ireland  Department  of  Finance:  If  Applicable  to  ERDF/ESF  we  would  ensure  that  all  necessary  actions  are  taken  to 
implement ECA recommendations. 

Department  of  Communities  and  Local  Government  (England  ERDF  MA):  If  the  recommendation  applies  to  an  ERDF  project  in 
England  or  a  systemic  issue,  we  take  action  to  correct  the  ‘fault’  or,  if  we  do  not  consider  there  is  a  fault,  we  will  respond 
accordingly. 

Welsh Government: WEFO’s Certifying Authority undertake reviews to ensure all recommendations have been followed up. From 
2016, WEFO’s financial Governance function has also taken on responsibility for ensuring these recommendations are adequately 
followed up._ 

UK Co-ordinating body: The Court’s opinion is taken into account in the development and application of controls.  All ECA Audit 
recommendations  are  brought  to  the  attention  of  scheme  managers  and  a  management  response  is  requested.    Progress  is  then 
monitored  and  the  Head  of  the  Paying  Agency  is  aware  of  progress  and  conclusion  at  monthly  accreditation  meetings.    Finance 
Department  provide  the  periodic  expenditure  information  to  UKCB  in  respect  of  the  2014/20  SRDP  ensuring  that  all  financial 
information is reported in accordance with the applicable regulations.  This includes expenditure and recovery information applicable 

289 

 
 
 
 
 
 
 
 
to the reporting period.  Forecast information is provided on a 6 monthly basis. 

Question 3.2 – Do you follow up recommendations addressed by the ECA to Member 
States in general? 

Reply: Welsh Government: Where WEFO is aware of recommendations raised on other Member States that are relevant to WEFO’s 
programmes, these would be considered to ensure WEFO’s processes are sufficient 

YES 

NO 

UK Co-ordinating Body: General recommendations are reviewed to identify if any scheme changes are required. 

290 

 
 
 
 
 
 
 
 
 
 
ANNEX IV – Member States' replies to Part B of the Questionnaire 

PART B  

Please enter any general comments you have concerning the 2016 Annual report or general issues relating to the discharge procedure 

Austria 

Federal Ministry for Agriculture: We have repeatedly established that the ECA, in its assessment of the random sample, makes no distinction between errors 
of a purely formal nature and those with a financial impact. This partly explains the difference between the Commission and ECA error rates. It also means 
there are lesser grounds for accepting the ECA findings. 

Bulgaria 

MI  The  findings  set  out  in  ECA’s  Annual  Report  for  2016  with  regard  to  output  indicators  (Chapter  6,  Note  6.50)  in  audited  operations  concern  OP 
Development  of  the  Competitiveness  of  the  Bulgarian  Economy  2007-2013.  It  should  also  be  noted  that  with  regard  to  the  design  of  the  system  for 
measuring/assessing  implementation,  a  significant  improvement  has  been  achieved  during  the  programming  period  2014-2020  by  addressing  the  problems 
identified in the 2016 Annual Report at the stage of the programming OP Innovations and Competitiveness 2014-2020 (OPIC).  

The result and output indicators (set at the level of investment priorities) for OPIC 2014-2020 are in line with the legal framework for the European Structural 
and Investment Funds and the rationale for the interventions under the programme. The achievement of the respective investment priorities of the operational 
programme is measured through the result indicators, which comprise valid statistical data. These indicators assess the impact of the individual measures on 
the achievement of the expected results under the respective investment priority. All projects financed under the OPIC within an investment priority contribute 
to the achievement of the goals of the investment priority concerned through specific results measured through output indicators. Output indicators measure 
the direct effects or ‘outputs’ of programme implementation. 

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Denmark 

Denmark is pleased that, for the tenth consecutive year, the Court was able to give a positive opinion on the reliability of the accounts and thus considers that 
the EU’s accounts give a fair view of revenue and expenditure, and of the EU’s financial position. It also welcomes the fact that the Court issued a favourable 
opinion on the legality and regularity of the transactions relating to own resources and of the payments in the areas of ‘Natural resources - market and direct 
support’ and ‘Administration’. 

However, Denmark regrets that the Court had to issue an adverse opinion on payments as a whole for four out of five categories of expenditure. It is a Danish 
priority to work towards an audit opinion with fewer reservations. In that light, it is a positive development that the error rate for 2016 was an improvement on 
the previous years and that for the first time the Court gave a qualified opinion on the overall 2016 payments instead of an adverse opinion. 

Denmark  takes  the  view  that  both  the  Commission  and  the  Member  States  bear  responsibility  for  ensuring  satisfactory  implementation  of  the  budget,  and 
therefore stresses the importance of using all available instruments for fuller implementation of the EU budget. It is important for the Commission to focus its 
efforts on headings (and Member States) where error rates are considerably higher than 2 %. In that connection, requirements  for increased control must be 
proportionate to the increased administrative burden and the financial risks to the EU budget. 

It  is  therefore  also  a  priority  for  Denmark  to  focus  on  the  underlying  reasons  for  the  complexity  and  to  work  towards  simpler  rules,  which  will  ease 
administration for both authorities and beneficiaries. 

Finland 

As regards the CAP, the eligibility rules and the requirement to check each condition cause a heavy workload and do not reflect the actual risk. Member States 
should be allowed to carry out real risk-based checks in order to reduce checks and focus on high-risk cases. At present this is not possible, because Member 
States are punished for overly efficient risk-based checks by having additional control requirements imposed on them. 

Poland 

With regard to the findings set out in the ECA’s 2016 Annual Report, Poland regards as a positive development that, unlike in previous years, the Court ruled 
that the underlying transactions for 2016 are legal and regular in all material respects; 

We also welcome the continuation of the positive trend whereby the estimated error rate for payments from the EU budget has fallen again (to 3.1 % in 2016) 
in all areas of intervention, irrespective of the type of management involved (centralised or shared). 

In  particular,  the  error  rate  is  falling  in  the  area  of  shared  management,  where  there  are  28  different  management  and  control  systems.  In  view  of  the 
simplifications and changes made for the 2014-20 programming period, we expect the error rate in this area to fall again in the next few years. 

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We agree with the Court’s conclusion that outstanding commitments (RAL) remain one of the main challenges faced by the EU budget in the coming years. 
We would draw your attention to the Court’s conclusion that, at the end of the current MFF and during the  first few years of the next financial framework, 
arrears may accrue which will require realistic budget appropriations to cover forecast commitments. 

Poland also supports the ECA’s finding that there should be a coherent approach to the question of whether special instruments should be included in MFF 
payment ceilings. We believe that commitments and payments for special instruments should be counted separately from MFF ceilings. 

We repeat our suggestion that the involvement of EC staff in EU Delegations in checks on projects, or even implementation of parts thereof, be increased. 
Poland believes that greater involvement by the EC in implementing EU-funded projects - and thereby closer cooperation with beneficiaries - would lead to a 
reduction in the margin of error. 

We also note that the Guidelines for Member States’ public authorities and services prepared by the Commission contain outdated information on the role 
played  by  the  Supreme  Audit  Office  in  connection  with  the  communication  of  audit  findings  made  by  the  Court  of  Auditors  (ECA).  This  concerns  the 
following paragraph: ‘Please note that the communication of audit findings adopted by the ECA during audit missions to your country and included in the 
2016 Annual Report is done through the National Supreme Audit Institutions. Therefore, if you want to obtain copies of the statements of preliminary findings 
issued by the ECA, please contact the National Supreme Audit Institution of your country.’ 

Last  year  the  Supreme  Audit  Office  informed  the  Court  of  Auditors  that  it  would  no  longer  coordinate  the  transmission  of  notifications  of  planned  ECA 
audits/ECA audit findings to the national authorities and that it would no longer coordinate the national authorities’ replies. A similar situation applies in most 
Member States. 

At present, information on these audits is copied to the Supreme Audit Office (with the right to second a Supreme Audit Office auditor to take part in the ECA 
audit), while exchanges of correspondence on the subject of ECA audits in Poland take place directly between the Court and the auditees/bodies involved in 
the  audits.  This  concerns  all  audits  (including  financial  and  DAS  compliance  audits  and  performance  audits).  As  such,  the  Supreme  Audit  Office  is  not 
involved in communicating ECA audit findings. 

We therefore propose that the Guidelines for Member States’ public authorities and services which may be provided by the European Commission in the next 
few years be amended accordingly. 

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