EU Budget Focused on Results Dr. Manfred Kraff, Deputy Director General DG Budget, EC Accounting Officer The Role of External Audit for Effective Public Sector Management 19 November 2015, Sofia

Outline Key Features of the EU Budget Why is performance a priority? What is EU Budget Focused on Results? Which are the key success factors? #EUBudget4Results

Key Features of the EU Budget The EU Budget is different from national budgets: Content – mainly financing investments, not public services and related administration  Hence, its small size (~ 1% EU GNI). Budget is expenditure driven and must be in balance Multiannual nature Commission is responsible for budget implementation, but 80% is implemented together with Member States Tightly controlled by: 1) Budgetary Authority (European Parliament (EP) and Council) 2) European Court of Auditors (ECA) 3) Discharge Authority (EP) #EUBudget4Results

Why is performance a priority? Comparison of ceilings 2007-2020 #EUBudget4Results

Why is performance a priority? Scarce resources Previously focus mainly on compliance and absorption, rather than performance Better spending debate during negotiations for 2014-2020 MFF Image problems of the EU budget Obligation towards the taxpayers and citizens Legal requirements of the Treaty #EUBudget4Results

"Make sure that every action we take delivers maximum performance and value added" Jean-Claude Juncker #EUBudget4Results

What is EU Budget Focused on Results? In WHICH areas do we spend? European public goods with higher EU added value of funds BFOR Relevant for: Annual budget discharge Mid-term review Post 2020 MFF 4. HOW do we communicate? 2. HOW do we spend? More leverage of EU funds More simplification efforts 3. How are we ASSESSED? Rigorous application and further development of our control framework #EUBudget4Results

1. In WHICH areas do we spend 1. In WHICH areas do we spend? European public goods with higher EU added value of funds Higher amounts in key growth and competitiveness areas Multiple objectives: example climate mainstreaming Flexibility of the EU Budget to respond to the emergencies ( i.e. migration) Performance-based budgeting at the EU level #EUBudget4Results

2. HOW do we spend? More leverage of EU funds More simplification efforts A system to measure and communicate past performance Higher leverage for EU money Performance improvements in the new MFF 2014-2020: Reinforced link to economic governance Programme performance framework + performance reserve Simplified delivery system #EUBudget4Results

3. How we are ASSESSED? Error rate trend Stopped the rising error rate trend, also thanks to effective application of financial corrections and preventive measures Stable in the past 3 years Source: ECA 2014 Source: ECA 2015 #EUBudget4Results

3. How we are ASSESSED? Managing legality and risks What if the level of error is still persistently high… Further simplification Redesign programme Multiannual residual error rate too high Multiannual residual error rate still too high ??? Additional cost-effective controls  Possible budgetary decisions on the basis of the assessment of the performance/error of the programme Deeper analysis of structural causes of errors in Member States  #EUBudget4Results

3. How we are ASSESSED? Performance The European Court of Auditors Chapter on performance in Annual Report Special Reports on different issues Performance in the European Union is assessed on the basis of the sound financial management principles (economy, efficiency and effectiveness), and covers inputs – financial, human, material, organisational or regulatory means needed for the implementation of the programme outputs – the deliverables of the programme results – the immediate effects of the programme on direct addressees or recipients impacts – long-term changes in society that are, at least partly, attributable to the EU’s action #EUBudget4Results

4. HOW do we communicate? EU Stakeholders Beneficiaries Citizens #EUBudget4Results

Which are the key success factors? Focus on results Simplification of the rules Financial corrections and recoveries Good cooperation with Member States Flexibility Leverage Accountability  External auditors have an important role #EUBudget4Results

EU Budget EU Budget http://ec.europa.eu/budget/index_en.cfm Projects database http://ec.europa.eu/budget/euprojects/ Budget Focused on Results – Conference http://ec.europa.eu/budget/budget4results/programme/index_en.cfm EU annual budget life-cycle http://ec.europa.eu/budget/annual/index_en.cfm EU Budget in my country http://ec.europa.eu/budget/mycountry/index_en.cfm #EUBudget4Results

Thank you! #EUBudget4Results