Sunday 30 May 2010

More or less control in the supervision of EU funds? - On the Commission Communication

It is no secret that the EU is spending a good amount of its budget through funds that are given to diverse recipients all across the Union, and so a discussion on how these funds are spent is always worth having.

They are worth having because almost every EU citizen, business, public authority or non-governmental organisation is directly or indirectly concerned.

In this regard, I find the newly published Commission Communication
"More or less controls? Striking the right balance between the administrative costs of control and the risk of error"
a very good start and probably the right way to go.

This seems to be the beginning of a discussion about what is a "Tolerable Risk of Error" (TRE) when it comes to the spending of EU funds, and while this communication "just" covers the fields of "Research, energy and transport" and the "European Agricultural Fund for Rural Development" it is foreseen to continue this exercise in other policy areas, too.

The big question raised in the communication is whether it is worth spending more money on controlling how EU funds are used when the amount of money and effort you have to invest to do so exceeds the the financial gains you have.

The conclusion is, if I read the document correctly, that a certain margin of error should be formally introduced that is somewhere between 2 and 5% because there a balance between effectiveness of control and efficiency of administrative costs spent seems to be reasonable.

More background information is in the two accompanying Commission Secretariat documents SEC(2010)640 (on the rural development policy area) and SEC(2010)641 (on the research, energy and transport policy area). As so often, both documents are not yet available in the respective PRE-LEX procedure, so thanks to the Council register for making it public first!

According to the agenda of last week's Commission meeting, Commissioners Semeta (Audit and Anti-Fraud; on the picture) and Lewandowski (Financial Programming & Budget) are responsible for this process.

I suppose it'll be interesting to follow this process and to listen to the upcoming debate between control freaks and laissez-faire freaks in the Council, the European Parliament and all around in the stakeholder community.

Picture: © European Parliament (flickr) / CC BY-NC-ND 2.0


Neville Bezzina said...

Hi Julian, thanks for the interesting post. This is of direct connection with what happened recently in my country.

Recently, the Commission cut off all funds for Youth In Action and Lifelong Learning Programmes (temporarily, according to the National Agency) to Malta, due to mismanagement in the funds given and lack of accountability. We don't know what this really means however.

As a result, the University of Malta, which was involved in heavy promotion of the Erasmus programme over the past years had to advise all students not to proceed in their preparations for their placement. Student and youth organisations applying for project funds similiarly are being left in the dark about what's happening. The mainstream media (which is mostly controlled by the two major political parties) is not helping student get information.

My question is, does this happen often with the Commission? What are the current rules for accountability of funds and how can they be breach to lead to this? Youths are not being told anything. I would appreciate you pointing me to the website of the relevant agency with this information.

All youth organisations have mobilised together to petition the government and Commission for action, and we're hoping things will be resolved soon

Thanks for the blogging :)

Julien Frisch said...

Hi Neville,

thanks for your comment!

I actually don't know how often this happens nor do I know about the particular case, but maybe someone from the Commission reading this can help with an answer…

Neville Bezzina said...

Thanks for replying, all student organisations have now signed the petition and sent it to the Commission. Hopefully some action will be taken soon!