3 European Court of Auditors Independent Institution, External auditor of the Union (Art. 285 TFEU)Providing the Discharge authority (Council and EP) with the Statement of Assurance (Art. 287 TFUE)DAS = "Déclaration d'Assurance"On the reliability of the EU annual accounts and on the legality and the regularity of the underlying transactionsResults of ECA 's audits as reflected in its Annual ReportBasis for EP Discharge
4 What is audited by the Court? Audits of sample operationsBased on Commission "transactions" in 2011160 ESF; 20 others (EGF, IPA, direct management)Grouped as 8 transactions per OP (including LV, LT)Management and Control Systems2 Audit authorities in DAS 2011 (including LV AA: clasified in cat 1)DG EMPL's Annual Activity Report 2011Special Reports: "corrective capacities", " closure"
5 Process with MS and Commission Audit by ECACommission and MS receive Preliminary findingsPartnership MS and CommissionCommission assists MS in preparing observations/argumentationCommission also sends its own assessment/comments to the CourtRe-assessment SPF by CourtIf issues remain: tripartite meeting (ECA, COM, MS)Final Assessment ECAResults feed into DAS – Annual Report
6 Errors (ESF) Number of Errors: 85 ESF error frequency: 27% - 2010 DAS Chapter 6 of the 2011 ECA's Annual Report (Section 1):error rate 2.2%Number of Errors: 85ESF error frequency:27% DAS53% DASQuantifiable ErrorsNon Quantifiable Errors ESF61% DAS39% DAS34% DAS66% DAS
7 DAS 2011 ESF errors Number of errors Grouping of errors 25 Eligibility (1.2% of the 2.2% error)21Audit trail15Public procurement (0,36% out of 2,2%)11 National level EU level 1 mixed13Management control system(Selection procedure, state aid, reporting errors)11Other
8 DAS 2011/ESF Public procurement From breaches to public procurement rules, 11 out of 15 are only linked to national law.- Value of the contracts is below the thresholds of the Directives- Training financed by the ESF falls within Annex II B
9 DAS 2011/ESF Public procurement 3 Cases with financial findings;- 1 Split contracts- 2 Non respect of proceduresFollow up: significant breaches in PP quantified as 100% error
10 DAS 2011/ESF Public procurement 12 cases of Non-financial findingsIncluding 3 findings in LT;- 2 (Non)publication of tender results- 1 Selection procedures (treatment of VAT)
11 Some significant findings based on FSFs Public procurementLimited impact: mostly limited compliance issues (procedural aspects)Examples:Direct award: absence of competition under EU threshold or for training activities under Annex I.b of Dir. 2004/18 (eligibility)No / Late publication of award notice (compliance)Selection criteria introduced or modified after call publication (compliance)Call for proposal launched by political authority instead of MA (compliance)
12 Other identified weaknesses in ESF Audits - Cut-off dates for framework contracts- Unjustified/ limiting selection criteria- Short deadlines for submission of offers- Conflict of interest?
13 EligibilityIneligible costs (main source of errors) : eligibility criteria of participants not met, participants outside target group, unclear segregation between usual and project's capacity building activities under technical assistance, incorrect calculation of costs, incorrect allocation of overheads, inclusion of employment termination benefit in project's costs; VATNon-respect of national eligibility rules: non-compliance with national accreditation rules for training companies, non-respect of requirements for final implementation reports, application for funding sent after national deadline, non-compliance with national PP rules – impact of "gold plating"
14 ConclusionsNational eligibility rules should be carefully evaluated and simplification envisagedSimplified cost options: current and next programing period!Management verifications (including Public procurement)!Tripartite meetings have a substantial impact on DAS errors
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