1. 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 November 2015, Sofia

2. 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

3. 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

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

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

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

7. 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

8. 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

9. 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 :
Reinforced link to economic governance
Programme performance framework + performance reserve
Simplified delivery system
#EUBudget4Results

10. 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

11. 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

12. 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

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

14. 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

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

16. Thank you!
#EUBudget4Results