1. Performance audit: How do we add value ?  2 practical examples & some suggestions Luc T‘Joen Principal Auditor, Team Leader Transport and Energy performance audits European Court of Auditors* * The opinions expressed by the auditor in no way binds the Institution. 1

2. Content The European Court of Auditors Why do public sector auditors carry out performance audits? Two practical examples: 1. seaports infrastructures (Special Report N° 4/2012); 2. Marco Polo (Special Report N° 3/2013) The new audit on maritime transport (headlines) Some suggestions 2

3. Content The European Court of Auditors Why do public sector auditors carry out performance audits? Two practical examples: 1. seaports infrastructures (Special Report N° 4/2012); 2. Marco Polo (Special Report N° 3/2013) The new audit on maritime transport (headlines) Some suggestions 3

4. The European Court of Auditors (ECA): what is it, and what not? Independent external audit body (since 1975); 5th European Institution since Treaty of Maastricht (1992) based in Luxemburg  The Court examines whether financial operations have been properly recorded, legally and regularly executed and managed with an eye to economy, efficiency and effectiveness. 4

5. Content The European Court of Auditors Why do public sector auditors carry out performance audits? Two practical examples: 1. seaports infrastructures (Special Report N° 4/2012); 2. Marco Polo (Special Report N° 3/2013) The new audit on maritime transport (headlines) Some suggestions 5

6. Why ? (ECA context) Sound financial management is embedded: - in the EU-Treaty (Article 317) - In the Financial Regulation (Article 27) Mandate of EU-Treaty: Article 287 (.. ECA shall examine.. whether the financial management has been sound) ECA’s mission: to assist the discharge authority and contribute to improvements in financial management  also affects policies 6

7. Content The European Court of Auditors Why do public sector auditors carry out performance audits? Two practical examples: 1. seaports infrastructures (Special Report N° 4/2012); 2. Marco Polo (Special Report N° 3/2013) The new audit on maritime transport (headlines) Some suggestions 7

8. Did transport infrastructure projects in seaports co-financed by Structural Funds in the 2000-2006 period achieve their objectives? Sub-question 1: “Did the audited projects have appropriate objectives ?” PROJECTS ADDRESSING A TRANSPORT POLICY OBJECTIVE PROJECTS ADDRESSING OTHER SF OBJECTIVES (GROWTH, EMPLOYMENT…) PROJECTS ADDRESSING NEITHER TRANSPORT NOR OTHER SF OBJECTIVES 8

9. Sub-question 2: Did the audited projects deliver their expected outcomes? GOOD PROJECTS NOT IN LINE WITH EU TRANSPORT PRIORITIES (e.g. tourism, fishing) BAD PROJECTS (wrong selection and bad implementation) ‘RIGHT’ PROJECTS (investment in port infrastructure e.g. new quay for freight vessels) UNSUCCESSFUL PROJECTS (e.g. projects never completed or “cathedrals in the desert”) Project performance (results/impact) Consistency with EU transport policy objectives 9

10. Project Results consistent 1. Were the objectives of the projects selected consistent with the EU-transport or other policy objectives indicated in the OPs?  10 2. Were the audited projects effective?  Overview by value of projects

11. Many unfinished, and unused infrastructures 11

12. Content The European Court of Auditors Why do public sector auditors carry out performance audits? Two practical examples: 1. seaports infrastructures (Special Report N° 4/2012); 2. Marco Polo (Special Report N° 3/2013) The new audit on maritime transport (headlines) Some suggestions 12

13. Is Marco Polo an effective programme? The sub-questions: 1. Did the Commission plan, manage and supervise Marco Polo so as to maximise its effectiveness? 2. Has the implementation of projects been effective?

14. Main audit results & recommendations 1. MP did not support the policy objectives 2. Output targets were not reached; quantities shifted are uncertain 3. No impact on reducing international road freight transport (not enough activity, not well designed for businesses) 4. poor sustainability and (a lot of) deadweight 5. No market survey done to assess real needs  Review fundamentally the approach: IF after 2013 funding is envisaged: - assess market needs and potential - design simple scheme - assess infrastructure funding possibilities - take up MS best practices

15. Content The European Court of Auditors Why do public sector auditors carry out performance audits? Two practical examples: 1. seaports infrastructures (Special Report N° 4/2012); 2. Marco Polo (Special Report N° 3/2013) The new audit on maritime transport (headlines) Some suggestions 15

16. Is maritime freight transport in Europe supported by a coherent EU strategy and effective funding support? 1. Strategy part: effectiveness of long term infrastructure planning, including the “corridor” approach of CEF for maritime freight projects, of the “ex-ante conditionalities” in 2014-2020, 2. Project part: assess needs, costs versus benefits, selection criteria, relevance to the strategy, outputs produced, use of the infrastructures, results and impact Audit work at the Commission, in MS (Spain, Italy, Germany, Poland and Sweden) 20 ports to audit (including case studies); 3 most material projects sampled/port, with 1 project to audit in-depth sampled randomly (the other 2 to be checked on output&use) This includes 5 « old ports » (empty or not connected ports audited in 2010) to assess what changed, if any, since 2010 16

17. Content The European Court of Auditors Why do public sector auditors carry out performance audits? Two practical examples: 1. seaports infrastructures (Special Report N° 4/2012); 2. Marco Polo (Special Report N° 3/2013) The new audit on maritime transport (headlines) Some suggestions 17

18. Suggestions Be clear on the notion of Motorways of the Seas  no confusion on terminology and on objectives (to support multimodality, or not) Assess the potential upfront carefully Talk to market operators/key stakeholders and avoid distorsion of competition  map existing lines ? Ensure sustainability and avoid deadweight Make sure the EU funding adds value (leverage effects) Monitor closely to measure the impact, and act timely if downfall compared to initial expectations 18