Brussels, 02/12/2010 (Agence Europe) - Like last year, and despite some improvements, it is cohesion policy that has attracted the greatest criticism of the management and monitoring of EU budget expenditure. The European Parliament's budgetary control committee has asked the European Commission to unveil an action plan, as part of its work on the discharge of the 2009 budget, to allow the automatic suspension of payments where there is mismanagement or improper auditing of EU funding.
The European Court of Auditors explained in its annual report for 2009, published early last month, that a large number of payments for Cohesion Fund projects are subject to error - some 36% of the 180 projects audited in 2009, in fact. The Court of Auditors says that the most likely error rate is 5%. It explains that at least 30% of the detected errors should and could have been detected and corrected by the member states before they made their “Declarations of Assurance”.
EU Regional Policy Commissioner Johannes Hahn said that the content of the European Court of Auditors' report on the EU's budget for 2009 showed that “we are on the right track”. Work is paying off (like the 2008 action plan to boost surveillance of Structural Fund activity) and will continue to do so, he explained, listing improvements like the fact that two thirds of the projects audited by the Court were not subject to error; all the administrative and auditing systems for the two programming periods (2000-6 and 2006-13) are effective or partially effective and for the first time, none of the systems is in the red. As proof that the sanctions system is working: “We interrupted payments 43 times in 2009. If, within six months, there was no solution for the problem, we blocked the payments completely”. The commissioner concluded that cohesion policy was making a contribution to the European Union.
EU Social Inclusion Commissioner Lászlo Andor said that from 2008 onwards, the Commission had adopted a very clear policy for the European Social Fund (ESF) to suspend payments for programmes where management weaknesses had been identified, explaining that the Commission had taken the responsibility to suspend flows of money when in doubt. That did not, however, mean that efforts had not continued, he added, explaining that the work to date now needs to be consolidated and inspiration drawn from the European Court of Auditors' comments to further improve the management of funding and reduce the percentage of errors. Andor stressed the importance of improving the actual effectiveness (rather than the number) of controls through the single audit system. Ways need to be found to simplify the rules and procedures (and thereby avoid efforts) and the Commission will encourage member states to be stricter in their controls before they sign off the accounts. The Court of Auditors criticises the financial corrections made by the member states. Andor said he was aware that the Court rightly believes this is a big problem, but the Commission believes the situation is improving although more work remains to be done.
Automatic payment suspension. The European Parliament's rapporteur on discharge of the 2009 budget, Jorgo Chatzimarkakis (ALDE, Germany), welcomed in the reduction in errors: “But I hope this is structural and not coincidence”. He criticised the fact that between 1994 and 2006, the EU had wrongly paid out €7.7 billion in funding from the Cohesion Fund and had only recovered €706 million of that.
The rapporteur called for payment suspension to be automatic when problems are detected without the need for action by politicians. Chatzimarkakis said his colleagues backed him here, wanting the Commission to set up an action plan to suspend payments automatically. This is one of the budgetary control committee's main demands.
Ingeborg Grässle (CDU) regretted the delays in recovering wrongly allocated funding.
Derek Vaughan (S&D, UK) and Peter Skinner (S&D, UK) criticised the use of Structural Funds for relocating companies within the EU. They referred to Twinings, a British tea manufacturer which is using €12 million in EU grants to move part of its operations from the UK to Poland. Jean-Pierre Audy (EPP, France) agreed that by financing such operations “we are financing our own unpopularity”.
The chair of the EP's budgetary control committee, Luigi De Magistris (ALDE, Italy) expressed concerns about organised crime infiltrating public procurement procedures, as is allegedly the case in Abruzzi in Italy. The next budget discharge hearing will be on 13 January 2011 with Commissioner Piebalgs (Development). (L.C./transl.fl)