Special Report No 16/98 on the implementation of appropriations for structural operations for the programming period 1994-1999, together with the Commission's replies (submitted pursuant to Article 188c(4)(2) of the EC Treaty)
C 347/48 EN Official Journal of the European Communities 16. 11. 98 SPECIAL REPORT No 16/98 on the implementation of appropriations for structural operations for the programming period 1994-1999, together with the Commission’s replies (submitted pursuant to Article 188c(4)(2) of the EC Treaty) (98/C 347/02) TABLE OF CONTENTS Paragraph reference Page 1. Introduction. 1. 1 2. Summary of main observations. 2. 1 — 2. 9 3. Financial programming and budgetary implementation of the structural operations. 3. 1 — 3. 12 4. Existing information on the implementation of structural operations. 4. 1 — 4. 7 5. Budgetary procedures for structural operations. 5. 1 — 5. 9 6. Delays in the utilisation of Community appropriations at the level of certain individual forms of intervention. 6. 1 — 6. 53 General observations. 6. 1 — 6. 13 Programming. 6. 14 — 6. 22 Financial channels. 6. 23 — 6. 33 Mobilisation of resources. 6. 34 — 6. 44 Implementation. 6. 45 — 6. 53 7. Conclusion. 7. 1 — 7. 8 TABLES. The Commission’s replies. 49 49 50 51 52 54 54 56 57 58 60 61 63 83 16. 11. 98 EN Official Journal of the European Communities C 347/49 1. INTRODUCTION implementation of 1. 1. This report deals with the Community appropriations for structural operations in the 1994-1999 programming period during the financial years 1994 to 1997. It examines in particular the utilisation of appropriations in relation to the overall funding granted to structural operations and to the Structural Funds for the period 1994-1999, in keeping with the decision of the Edinburgh European Council of 11 and 12 December 1992 and the provisions of the Act of Accession for the three new Member States. The consequences of this implementation of appropriations on future financing are analysed in relation to the financial perspective. The reasons behind the under-use of appropriations and the delays in the use of the overall financial allocations have been analysed with the aid of questionnaires sent to the Member States and on-the-spot visits. 2. SUMMARY OF MAIN OBSERVATIONS Commission’s main concerns every year is to achieve the planned levels of commitment. The techniques that have been developed to endeavour to achieve this aim require great effort on the part of the Commission and the Member States, especially as regards the amendments to financial plans. These plans are drawn up and amended in order to serve as a basis for making the necessary commitments (see paragraphs 3. 11-3. 12). 2. 5. The lack of reliable, up-to-date information on the physical and financial implementation of the structural operations at all levels of management (Community, national and regional) makes it very difficult to monitor these measures. Feedback on the actual state of progress of the operations is very slow. Certain budgetary and accounting practices and a complex and badly managed indexing system make it even more difficult to obtain an accurate picture of the situation. The attempts at setting up joint databases have met with failure. Consequently, the data which the Commission presents in its revenue and sheet as commitments not included in the balance sheet are not complete (see paragraphs 4. 1-4. 21). expenditure account and balance for the programming 2. 1. Overall, at 31 December 1997, the implementation of the structural operations achieved a level that was close to the initial estimates, in spite of the delays that had been noted at the beginning of the period. Nevertheless, significant disparities are apparent per field and per Member State (see paragraphs 3. 1-3. 4). In 1994 and 1995 there was found to be under-use 2. 2. of commitment and payment appropriations. In 1996 and 1997, by contrast, the rate of implementation for appropriations under the main headings, in particular the ERDF, the ESF and the Cohesion Fund, was almost 100 %. For the Community initiatives, however, the rate remained low. In 1997, the Commission was unable, because of the lack of payment appropriations, to act upon payment claims totalling around 1 500 Mio ECU (see paragraphs 3. 5-3. 7). for In order the delays to make up 2. 3. in implementation of the commitment appropriations of the Structural Funds (SFs), the 1999 budget will need to in addition to the provide for 3 171 Mio ECU appropriations originally planned financial perspective, i. e. about 2 % of the total appropriations of the SFs. The cases of under-use of payment appropriations that have been noted, particularly at the beginning of the period, have led to a use of own resources that was unnecessary. Part of the surpluses from previous financial years can be ascribed to this (see paragraphs 3. 8-3. 10). the in some headings 2. 6. The cases of under-use on concerning structural operations and lack of appropriations for others, coupled with the scale of the transfers of appropriations carried out within these budget headings, highlight reliable expenditure programming and the shortcomings of the budgetary (see paragraphs 5. 1-5. 10). forecasting procedures lack of the the 2. 7. The poor rate of utilisation of appropriations at the beginning of the period could have been foreseen, bearing in mind the delays in the adoption of the regulatory framework — the Community Support Frameworks (CSFs) and the single programming documents (SPDs) — and the forms of intervention, and the periods of time laid down (see paragraphs 6. 4-6. 7). the operations implementing for 2. 8. An analysis of the forms of intervention that have the lowest levels of use of appropriations shows that the delays in implementation relating to these are causally linked in particular to one or more of the facts or situations described below: — the differences between the Community budgetary and financial implementation procedures and the national ones (6. 8, 6. 10); — cases where the application of basic aspects of eligibility, such as the notion of legal and financial commitment, gives rise to some uncertainty (6. 9); 2. 4. The objectives for structural expenditure set by the financial perspective are reflected in the Community budget in terms of annual commitments. One of the — the difficulties in applying the integrated approach (6. 11, 6. 12, 6. 15, 6. 16, 6. 19, 6. 20); C 347/50 EN Official Journal of the European Communities 16. 11. 98 — weaknesses in the financial and physical monitoring, the Monitoring the malfunctioning of and Committees (6. 13, 6. 29); — lapses in the coordination (6. 17, 6. 18); — overlapping of the programming periods (6. 21); — the length of time taken for the presentation and handling of the payment claims (6. 32, 6. 33); — the optimism of the financing plans, the weak ex ante evaluations of the operations, particularly as regards lengthiness of the private administrative 6. 42, (6. 34-6. 39, 6. 50-6. 52); investments, and the procedures — fluctuations in the exchange rates (6. 43-6. 44); — the fact that some beneficiaries are not familiar with the eligibility rules (6. 45); — exceptional cirsumstances (6. 46, 6. 53). to the framework of 2. 9. Bearing in mind the limited resources that the Commission has at its disposal and the large number of programmes, the Court finds that the Commission has devoted considerable effort the programming, management and evaluation. One it has simplified the eligibility criteria and clearly divided up responsibilities within the Commission should give priority to applying genuine management by objective and by programme — a basic concept of the reform — at all levels (programming, evaluation, organisation, monitoring, checks). Attention should also be drawn to the efforts made by many administrators individual Member States. Nevertheless, the national systems need strengthening at the levels mentioned. The way some of the Monitoring Committees are run should also be improved. the partnership, the in 3. FINANCIAL PROGRAMMING AND BUDGETARY STRUCTURAL OF THE IMPLEMENTATION OPERATIONS In 1992, the Council made provision for a sum of 3. 1. 141 471 Mio ECU for commitment under the Structural Funds for the period 1994-1999, to which was added 4 747 Mio ECU in 1995 for the three new Member States. The annual distribution of these amounts was also planned (see Table 1). The complex procedure for allocating these resources by objective, Member State and Community initiative (CI) has not always been based on the Community objective criteria, mainly where initiatives are concerned, for which the procedure has, moreover, been lengthy (1). 3. 2. Out of a total of 137 634,5 Mio ECU at current prices that was provided for under the CSFs of the 12 Member States of that time for the entire period 1994-1999, 83 488,2 Mio ECU was committed between 1994 and 1997, i. e. 60,7 %. In relation to the estimates for the first four years (85 411,4 Mio ECU), this is a rate of 97,7 %. The volume of payments that have been made is 61 995,3 Mio ECU, i. e. 72,6 % of the planned commitments (see Table 2). This may be regarded as reasonable, in view of the start-up difficulties and the planned staggering of the payments. An additional period of two years is usually granted for making the payments to the beneficiaries, and the final implementation reports have to be presented within six months of the end of this period. 3. 3. A sum of 2 285,9 Mio ECU was committed under the CSFs of the three new Member States for the period 1995-1999, which represents 89,8 % of the amounts programmed for the first three years of that period. Payments totalled 1 636 Mio ECU, i. e. 64,3 % of the commitment estimates (see Table 3). These lower rates can be attributed to the fact that these States have had to set up procedures for managing the SFs. 3. 4. The degree of progress made in the programming in relation to the initial estimates differs from one Member State to another. The rate of commitment varies between 112,6 % and 71,2 %. For payments, the rates vary between 90,7 % and 47,4 %. In terms of objectives, Objective 1 (O1) has the best performance (101,3 % in commitments) whereas Objectives 5(a) (fisheries part) (75,4 %) and 5(b) (75,2 %) are lagging behind. 3. 5. Out of an amount of 14 471,1 Mio ECU programmed under the CIs for the period 1994-1999 and 9 078,6 Mio ECU for the first four years, commitments amounted to 7 661,5 Mio ECU, i. e. 84,4 % of the total planned for these years, and payments amounted to 4 165,3 Mio ECU, i. e. 45,9 % (see Table 4). The delays in the adoption of the guidelines and the difficulties encountered in drawing up and adopting the numerous programmes concerned are the cause of the low rates of implementation that have been noted, especially at the beginning of the period. The Court has already drawn (1) The corresponding data are included in a set of annexes to this report available on request from the European Court of Auditors (see Table 10). 16. 11. 98 EN Official Journal of the European Communities C 347/51 attention to the shortcomings in the management of these CIs in its previous annual reports (2). implementation for commitment 3. 6. The rates of appropriations varied between 91,1 % in 1994 and 98,4 % in 1996. For payment appropriations, the corresponding rates rose from 72,5 % in 1994 and 80,3 % in 1995 to 98,6 % in 1997. The low rate of implementation for payment appropriations in 1994 and 1995 led to a very large volume of these appropriations being cancelled (5 330 Mio ECU in 1994 and 4 425 Mio ECU in 1995) (see Table 5). In 1997, however, the shortfall in appropriations on some headings, especially the ESF and the ERDF, meant that it was not possible to make payments totalling some 1 500 Mio ECU. in the disparities table highlights the 3. 7. This implementation of various structural operations. For example, the ERDF and the Cohesion Fund still show a rate of utilisation of commitment appropriations of nearly 100 %, whereas the CIs show mediocre results, especially in 1994 and 1997 (12,9 % and 61,4 % respectively). For the payment appropriations of the Cohesion Fund, the rate of utilisation was 52,5 % in 1994 but achieved almost 100 % in 1995, 1996 and 1997. The ERDF and the ESF used up virtually all their appropriations in 1996 and 1997 whereas in 1994 and 1995, together with the CIs, they were the cause of most of the cancellations of appropriations. 3. 8. The financial perspective was adjusted to the implementation conditions of the structural operations. These adaptations, not taking into account any cases of under-use that may arise in 1998, have led to about 3 171 Mio ECU and 118 Mio ECU in appropriations for commitments being carried forward to the financial year 1999 in respect of the SFs and the Cohesion Fund respectively. For appropriations for payments, the overall effects are in the region of 1 405 Mio ECU for the financial year 1999 (see Tables 6 and 7). In view of the ceilings fixed under the system of own resources and the Interinstitutional Agreement on budgetary discipline, the requisite appropriations could be entered in the 1999 budget. 3. 9. For all the SF objectives, the proportion of payments in relation to commitments is 74,2 % whereas for the CIs it is only 54,4 %. This proportion varies from one Member State to another, ranging for all the SFs from 88,4 % for Ireland to 57,4 % for Italy (1). comparative analysis of 3. 10. A the budgetary implementation with the annual estimates shows a lack of commitments and payments in 1994 for certain countries and objectives which stems from the fact that no aid measure had yet been adopted. This was the case in particular for Objective 2 (O2) in Spain, the only country which did not opt for the SPD formula, or for Objective 5(b) (O5b) in Belgium. The delays that were found at the beginning of the period were made up in 1996 and 1997. Thus, for example, the cumulated payments in relation to the estimates rose from 51,7 % in 1994 to 77 % in 1997 for O1, from 44,7 % to 65,6 % for O2 and from 34,5 % to 55 % for O5b. As regards Italy and for O1, this percentage rose from 18,6 % to 55,5 % (1). 3. 11. For all the O2 aid measures in the period 1994-1996, the financial plans drawn up under the initial programming had to be rescheduled, which meant that they were concentrated on the final year (see Table 8) and that large amounts from the Structural Funds (1) were transferred to the period 1997-1999. 3. 12. The Community’s rules for financial management were not intended to establish a precise, direct link between commitments and payments on the one hand and the progress of aid measures on the other, whether at the level of the administrators, the final beneficiaries or the ultimate beneficiaries (3). On the one hand, where the Community aid that is granted does not exceed 40 Mio ECU, the commitment for the whole period can take place at the time the decision is adopted. On the other hand, the link between the expenditure incurred and the Community appropriations disbursed is more and more tenuous. The rescheduling of the financial plans leads to new payments being made despite a low rate of progress in the aid measures. For some activities, the commitments and even the payments may temporarily be higher than the estimates, because the corresponding adjustments are not made until the first financial operation after an amendment. Lastly, the considerable delays in the circulating of financial data further reduce their value in terms of reflecting the true situation of the aid measures. As for the situation at 31 December 1997 regarding payments made by national, regional and local bodies to the final beneficiaries, no exact information can be provided because of the shortcomings and delays in the systems for monitoring data. 4. EXISTING INFORMATION ON THE IMPLEMENTATION OF STRUCTURAL OPERATIONS 4. 1. The task of analysing structural operations is hampered by shortcomings in the reliability and updating (2) See the Annual Report of the European Court of Auditors concerning the financial year 1995 — SME, Leader and Adapt; Annual Report of the European Court of Auditors concerning the financial year 1994 — Interreg. (3) Those involved here are, for example, project managers for operations coming under final beneficiaries or companies receiving support under aid schemes. C 347/52 EN Official Journal of the European Communities 16. 11. 98 of the information needed for this purpose. These weaknesses, which exist at various levels (Community, national and regional), concern in particular information about how the programming is progressing and details of the implementation of aid measures in the field. There is no overview of the whole situation regarding the programming of structural operations for a given period. is in fact to show, the Court (4), 4. 2. As requested by in 1996 the its revenue and Commission started expenditure account and balance sheet, information concerning the multiannual obligations connected with structural operations as off-balance-sheet commitments. The figures presented for the financial year 1997 are still incomplete (5). The the Commission departments draw up a the setting out off-balance-sheet commitments on the basis of the SF allocation in accordance with the financial perspective, deducting the cumulated commitments. This procedure does not make it possible to distinguish between, on the one hand, the amounts corresponding to existing legal obligations arising from decisions that have already been made, and, on the other, the amounts that still have to be allocated. Information on the Cohesion Fund was presented, for the first time, in 1998. that table regard 4. 3. The Commission’s practice with to commitments by annual tranches varies depending on the department concerned. These practices consist in making no adjustment to the commitments after reprogramming and in charging payments to the oldest commitments (6). They make monitoring difficult and lead to a situation where the aid measures are artificially fragmented into annual tranches and then this temporal link is forgotten when they are being implemented. In its Opinion No 4/97 (7), the Court recommended 4. 4. that the practice of committing structural measures by annual instalments be abandoned, as it ‘is an anomaly and an oversight of the fact that, for multiannual operations to which differentiated appropriations are allocated, it is the payment appropriations that must ensure conformity with budgetary annuality and the regularity of the amounts spent from one financial year to another’. (4) See the Annual Report of the Court of Auditors concerning the financial year 1994, paragraphs 5. 7 and 5. 113. (5) See the Annual Report of the Court of Auditors concerning the financial year 1997, Chapter 8 relating to the Statement of Assurance, paragraph 8. 58. (6) See the Annual Report of the Court of Auditors concerning the financial year 1996, Chapter 21, paragraph 21. 4. — Report in support of the 1995 DAS, Volume I, paragraphs 3. 34-3. 35. (7) Opinion No 4/97 of the European Court of Auditors on a proposal for a Council Regulation (Euratom, ECSC, EC) amending the Financial Regulation of 21 December 1997 applicable the European the general budget of Communities, paragraph 2. 16 of the Annex. to the objectives thus defined are de 4. 5. The practice of making commitments by tranche, provided for in the regulations governing the Structural Funds, is a deliberate exception to the general provisions laid down in the Financial Regulation. This commitment by tranche maintains the present paradoxical situation whereby the expenditure objective is fixed in terms of annual commitments of the Community budget. In reality, facto undermined right from the beginning of the period, when the programmes are adopted, as this adoption defines the total cost of the legal obligations entered into by the Community, with this cost itself being pre-defined under the financial perspective and the framework Regulation. The role played by the administrating departments thus consists in putting this situation on a formal footing by making the budgetary commitment, which then involves no more than merely making accounting entries. However, the number of operations, the complexity of the calculations required in order to put the operations on a yearly basis, and the cumbersome procedures for amending the financial plans for the measures all mean that the Commission departments concerned and the Member States have to devote a considerable portion of their resources to this. 4. 6. These operations are carried out throughout the duration of the programmes, but they assume greater importance at the end of each programming period when the majority of the financial plans have to be rescheduled. This situation, which was observed for the period 1994-1996 of Objective 2, will recur in 1999, for the sole purpose of being able to commit all the planned amounts of overall funding. 4. 7. It is difficult to obtain an overall picture of how the structural operations are being managed by the various Commission departments because this management is so compartmentalised. Databases have been set up in each of the departments, but no provision has been made for linking them up so that the data can be cross-checked and compared. Their main purpose is to enable the budgetary implementation of the portion of the aid measures managed in each department to be monitored; they are of only very limited use for overall monitoring. The ARINCO database has the advantage of being common to all the SFs, but, because of the lack of basic data, the poor quality of the data available and the failure to update them regularly, this instrument is inoperative. 5. BUDGETARY OPERATIONS PROCEDURES FOR STRUCTURAL the detailed 5. 1. An analysis has been made of budgetary implementation of commitment and payment appropriations (1). This has taken account of not only transfers in the strict sense but also ‘reassignments’ of appropriations within a budget item. In the case of the 16. 11. 98 EN Official Journal of the European Communities C 347/53 CIs, a single budget item was created for each of these initiatives or their different aspects. However, the aid is granted under the ERDF, the ESF, the EAGGF-Guidance or the FIFG without this fact being reflected in the budget. When the items concerned by the CIs are implemented, the internal allocations are made by the authorising officer responsible for the management of each Fund. The ‘reassignments’ consist in reallocating the appropriations available under the CIs between the different SFs. implementation rates were only 12,9 % for commitments and 41,2 % for payments. The need to budgetise these amounts, which it was obvious beforehand could not be mobilised, was justified by the Commission as a necessary to stage subsequent years, by way of interpretation of paragraph 10. 2 of the Interinstitutional Agreement on budgetary discipline and improvement of the budgetary procedure. transfer unused allocations in order to 5. 2. The scale of the transfers and ‘reassignments’ of appropriations, which involve several thousand million ecu each year in both commitments and payments and which concern virtually all the items, is evidence of the lack of rigour in the budgetary estimates. Cases of considerable under-use of appropriations were offset by overruns on appropriations elsewhere. By way of example, the ERDF O2 payment appropriations, there was a negative transfer of 584,5 Mio ECU in 1996 (33 %) and a positive transfer of 874,6 Mio ECU in 1997 (48 %). regards as situation. The 5. 3. There are several circumstances that can explain commitment this appropriations globally adopt the annual objectives laid down in the financial perspective. These appropriations are broken down by budget heading on the basis of the financial plans for the CSFs and SPDs. estimates for 5. 4. The estimates for payment appropriations are drawn up by applying percentages, calculated in accordance with the theoretical and historical trend in payments, to the commitment appropriations of the year and to the amounts still to be settled. 5. 5. The forecasts for appropriations are drawn up by the Commission departments at the beginning of the preceding financial year, and the initial entries of appropriations in the budget and the way in which they are broken down by item are rough estimates which, as is apparent right from the beginning of the budgetary procedure, bear little relation to reality. Until 1998, neither amending letters nor preliminary draft amending and supplementary budgets were drawn up to take account of the true trend in aid measures and the continual amendments to the financial plans. The Commission rectifies this situation by making use of transfers. 5. 6. In 1994, given the late adoption by the Commission of the guidelines relating to the CIs, it became apparent that the majority of the programmes could not be approved during the year. However, transfers were made to the budget items for the CIs from the reserve (Chapter B0-4 0 of the budget). They proved to be unnecessary, because at the end of the financial year 1994, the 5. 7. The financial plans for the aid measures, drawn up by year, bring together the planned expenditure for the entire period of eligibility of the commitments. It is therefore logical to conclude that the figures shown in these plans represent estimates of commitments for the measures. However, when amendments are made, the revised plans include the expenditure actually incurred for the years that have passed plus new estimates for the years still to come. They thus become hybrid in nature and are in fact made up of neither commitments nor payments but of a mixture of these two categories of operations. The latter years of the commitments’ period of eligibility are thus artificially inflated since they contain payment estimates that can be carried out in the Member States for two extra years not included in the financial plans. The usefulness of these plans is thus limited, and yet they constitute a key element in the process of drawing up the preliminary draft budget. 5. 8. The indexing method for the SFs was made more flexible for the period 1994-1999 (8). The additional resources generated by the indexation of each CSF, SPD and CI have to be calculated by the Commission departments, at the latest by the beginning of each year, by applying the indexation rate for the year in question to the annual instalments referring to the same year and to the following years. These resources can be used to increase the Community aid of existing aid measures and/or to finance new operations. The Monitoring Committees propose these allocations, which are decided by the Commission. 5. 9. In practice, and bearing in mind the delays at each stage of this procedure, the resources arising from indexation have not been used and have thus remained potential, pending a formal decision by the Commission, without having been recorded. For example, the resources transferred from the 1994-1996 period to that of (8) Commission Regulation (EC) No 402/94 of 23 February 1994 amending Regulation (EEC) No 1866/90 on arrangements for using the ecu for the purposes of the budgetary management of the Structural Funds. C 347/54 EN Official Journal of the European Communities 16. 11. 98 1997-1999 under the O2 were not used until the decisions to grant them were taken in 1997 and 1998. This situation makes it even more difficult to keep abreast of the state of progress of the programming. 6. DELAYS IN THE UTILISATION OF COMMUNITY APPROPRIATIONS AT THE LEVEL OF CERTAIN INDIVIDUAL FORMS OF INTERVENTION General observations period were not adopted until July 1993 (10). It was thus difficult for the aid measures to start up as of 1 January 1994, as that left only five months to set up the partnership, draw up the plans for the various objectives and submit them to the Commission (11), define and adopt the decisions concerning the CSFs or, where appropriate, the SPDs, make suitable ex ante evaluations, and present and approve the aid requests. Furthermore, the plans under O2 and O5b could not be drawn up until the lists of eligible areas were determined, and the Commission did not do this until 20 and 26 January 1994 respectively (12). implementation; 6. 1. As part of this audit, an analysis was made of the various reasons that may underlie the delays in the utilisation of Community appropriations, classified below in four categories: programming, financial channels, this mobilisation of resources and involved examining the documents available, in particular the implementation and evaluation reports and the minutes of the Monitoring Committees. This work was followed up by audit visits to the Member States and by a questionnaire sent to selected administrators; Table 9 shows a summary of the replies received. For the purposes of drafting this questionnaire, a list was drawn up of the reasons actually behind the cases of under-use of appropriations. Apart from reasons of a structural nature, such as the large number of aid measures or the delays in the adoption of the CIs, about 40 reasons were identified. The questionnaire was the to administrators of intervention co-financed by the ERDF and belonging under Objectives 1 and 6 which, at 31 December 1996 (midway through the implementation period), had the lowest rates of use of appropriations of all the SFs (9). It should be emphasised that the questionnaire is therefore targeted at a particular sub-population and that the replies cannot be extrapolated to all the aid measures. Even though the sample of programmes is not representative of this whole, the results of the survey have nevertheless proved to be useful for illustrating the problems involved in using appropriations. forms of examined the 31 thus sent the eligible areas, 6. 3. The coordination Regulation stipulated, except where otherwise provided for by the Member State concerned, that, within three months of the entry into force of the Regulation (3 August 1993) or the drawing-up of the lists of corresponding plans should be submitted, and within six months of these plans being received the Commission Decisions approving the CSFs should be adopted. Lastly, the CSFs and the SPDs for O1 were adopted in the summer of 1994, and those relating to O2 in December 1994. Subsequently, the CSFs had to be made more specific by means of the adoption of the OPs, overall subsidies and individual projects. It would have been expedient if this process could have been completed in 1994, but this was not possible. 6. 4. Furthermore, the same coordination Regulation (13) required the Commission and the Member States to ensure that the actions accounting for at least two thirds of the Fund aid for the first year of the CSFs be approved by the Commission within two months of the adoption of the decision relating to the CSFs. This was not the case, especially with regard to O1 in Italy and O2 in Spain. 6. 2. The majority of the administrators who replied to the questionnaire regarded the delays in the adoption of the CSFs and SPDs as the chief cause of the low rates of utilisation of Community appropriations. The regulations governing the SFs for the 1994-1999 programming 6. 5. Furthermore, at 31 December 1997, large amounts of the planned overall funding had still not been distributed, and there were the results of the indexation. As regards the period 1997-1999 of the O2, for which the delays in the adoption of the regulations cannot be used by way of justification, several decisions to grant aid were not approved until 1998. (9) 54 replies to the questionnaire were received. This number is higher than the 31 interventions selected because, for some interventions, several partners replied separately. O1 was chosen because of its size (it represents more than two thirds of the overall funding for the SFs) and because all the Funds are involved in it. O6 was selected because it is analogous with O1. The analysis of O2 was made on the basis of records. (10) Regulations (EEC) No 2080/93, (EEC) No 2081/93, (EEC) No 2082/93, (EEC) No 2083/93, (EEC) No 2084/93, (EEC) No 2085/93 of 20 July 1993 (OJ L 193, 31. 7. 1993). (11) Regional development plans (O1); regional and social conversion plans (O2); rural development plans (O5b); plans under Objectives 3 and 4. (12) Commission Decisions 94/169/EC and 94/197/EC. (13) Article 10(2) of Regulation (EEC) No 4253/88. 16. 11. 98 EN Official Journal of the European Communities C 347/55 6. 6. One of the other main causes of the delays in the utilisation of Community appropriations is, in the eyes of the majority of administrators, the slowness of the Community and national procedures set up in order to ensure compliance with Community rules. 6. 7. Further delays may be caused by the integration of national budgetary implementation procedures with the management of Community appropriations relating to the implementation of multiannual programmes. Thus, where the way in which the expenditure is managed does not depend on the origin of the funds, the slowness of the budgetary implementation procedures linked to the existence of Community co-financing is not regarded as an important factor in the delays. However, where new procedures have to be added, or where separate files have to be made for the management of the Community appropriations and the national counterpart funds, the administrators regard this factor as important or very important. Often, lengthy administrative procedures that have to be gone through for Community appropriations the national procedures for budgetary implementation, and this does not make it easy for the aid measures to go ahead speedily and flexibly. Where this integration is done large number of tailor-made project by project, a budgetary and accounting operations have to be carried out when it is implemented. there are integrated to be into the governing provisions 6. 8. The financial implementation of the SF multiannual aid measures are based on the Community budgetary implementation procedures for differentiated appropriations. At both Community and national level, two different periods exist side by side: one for implementing commitments and the other for making payments. However, this concept of multiannual commitment is very often alien to the budgetary procedures applied in the Member States by the public authorities and by businesses. 6. 9. The concept of legal and financial commitment at national level and the determination of the point in time when this was done are basic factors in establishing the eligibility of expenditure (14). Determining these dates poses a very important problem for the administrators, which is difficult to overcome in practice, and it gives rise to uncertainty. In some cases and in order to introduce certainty as to the date of commitment, new procedures In other cases, protracted have been introduced. (14) The concept of commitment was once again spelled out in eligibility sheet No 3 in April 1997. The ‘compulsory legal provisions’ and the ‘commitments of the necessary financial means’ were defined as the decisions taken by the final beneficiaries to implement the eligible operations and the allocation of the corresponding public funds (OJ L 146, 5. 6. 1997, p. 1). discussions are being held in the Member State and with the Commission. This state of affairs has resulted in solutions that in some cases are directly opposed to each other, and which the administrators concerned than on clearly established procedures: some reject the expenditure incurred if there is the slightest doubt as to its eligibility; others keep all the expenditure, leaving it up to any subsequent checks to sort out the eligible items from the ineligible ones. fact depend more on in 6. 10. The beginning of a programme’s period of eligibility means the date as of which the first payments can be made. However, if the initial date of commitment of the expenditure were to be established, this would make it possible to ascertain that the co-financing related to new projects and not to projects that were already under way or even completed. For the commitments, only a final date has been fixed, thus making it easier to carry out expenditure, in haste, at the end of the period. The financial implementation provisions ought to be closer to the Member States’ procedures and should not deviate from the aims of a programme-based approach. 6. 11. The impact that the co-financing of structural operations has on the capacity to utilise Community appropriations differs according to whether existing or new operations are involved. When the SFs co-finance existing operations, progress is rapid; it may even happen that the SFs reimburse expenditure that has already been the SFs co-finance new incurred. However, when operations, progress is much slower, because of the need to start up all the implementation procedures. than if they are if their effect 6. 12. The difficulties in coordinating a large number of both Community and national administrators have led to delays in implementation, especially in the case of multi-fund programmes. The integrated approach which, as far as structural aid is concerned, should be playing a larger role, is based on the idea that the impact of the various measures will be greater is implemented separately. combined than However, in many cases the multi-fund programmes are no more single-fund sub-programmes which are managed independently of each other and are even governed by implementing provisions that differ depending on the Fund. This also applies to numerous CI programmes where several Funds are involved but each contributes very small amounts. These situations slow down the procedures without offering any real added value. Some Member States, having discovered the shortcomings of the multi-fund approach during the preceding period, have cut down on the number of programmes of this type that they present. juxtaposition of a C 347/56 EN Official Journal of the European Communities 16. 11. 98 in of the the instrument partnership effectiveness 6. 13. The Monitoring Committees ought to constitute a fundamental by ascertaining that the aid measures are being implemented efficiently. The Court has already pointed out the need to the Monitoring improve Committees (15). They fail to operate properly because they were set up late, they do not hold enough meetings, their procedures for adopting decisions are lengthy and they are not organised in a suitable manner (too little time for studying the documentation or for allowing a large number of participants involved). Furthermore, the Monitoring Committees’ decisions usually consist only of proposals submitted to the national authorities and to the Commission requiring explicit confirmation, which once again sets lengthy procedures in motion. to be Programming 6. 14. The procedures for adopting the documents that form part of the programming are slow, both at Community level (where most of the DGs are involved) and at national level (where there needs to be close consultation between the various partners). The time needed may depend on and administrative structures of the Member States, and on the effectiveness of the partnership. institutional the in adapting 6. 15. The delays in Italy may be explained by the difficulties the national and regional management structures, which were more suited to management by project than by programme, to bring them into line with the reform of the SFs. These structures and their powers have undergone considerable changes, which has not made it any easier to set up an effective partnership, capable of rapidly overcoming the difficulties the various that have arisen during programming phases. The Community procedures have been designed for the management of programmes and they are not geared to finding speedy solutions to problems that arise for individual projects. 6. 16. The weakness of some programmes submitted to the Commission and the efforts made by the latter to improve their quality have resulted in delays in their adoption. However, in many cases, these delays are disproportionate to the improvements that have to be made. They stem more from the Commission’s difficulties in managing the plethora of forms of intervention that have been proposed, in coordinating its departments and in building up an effective partnership culture with the Member States. In some cases, it took several months or (15) Most recently in the Annual Report concerning the financial year 1996, paragraphs 7. 15-7. 19 and 7. 59. even years for the detailed rules for implementing the individual projects to be laid down, following exchanges of correspondence and discussions which did not make much headway. As regards Italy, for example, at 31 December 1994, only 5 130,3 Mio ECU of aid had been approved out of a planned total of 14 860 Mio ECU, and programmes presented in 1994 were not adopted until 1997. 6. 17. The global subsidy for Andalusia, presented in April 1994, was approved in September 1995 and the related agreement was signed in January 1996. Also, the suspensive clause relating to the ‘risk capital’ measures which was included in the decision was not rescinded until November 1997. such as 6. 18. Often, suspensive clauses could have been avoided or rescinded earlier if there had been better coordination within the Commission and between the Commission and the Member States. There have also been cases where suspensive clauses have been introduced following purely formal difficulties, lack of precise identification of an aid scheme that had in fact already been approved by the Commission. Files relating to these clauses have been shelved for a very long time (sometimes for years) without any significant headway being made, especially in the case of the most innovative measures. Frequently, the delays in overcoming these problems, especially within the framework of the aid measures for the O2 for 1994-1996, have led to the operations concerned being replaced by more traditional measures. the 6. 19. The fact that the annual financial plans drawn up in the SPDs/OPs are unrealistic has also contributed to the low rates of utilisation of appropriations. As a rule, these plans have been drawn up following the increase in the annual commitments provided for in the financial perspective without taking into account their feasibility on the ground. Right from the time the plans were drawn up, the administrators of the programmes were already aware that it would be impossible to abide by the annual allocation laid down in the financial plans. This state of affairs is corroborated by the amendments made to these plans and the scale of these amendments. had two aspects which 6. 20. Furthermore, a considerable impact on the way in which the aid measures were implemented at the beginning of the period were neglected at the time of the programming. The first was the delay in adopting the aid measures. Admittedly, the eligibility of the expenditure began on 1 January 1994 for requests presented to the Commission before the end of April 1994, but the selection procedure for the individual operations was not able to get properly under way in most cases until the programmes were adopted. It was only in cases where advance financing of possible the measures made was aid 16. 11. 98 EN Official Journal of the European Communities C 347/57 that the operations were able to start up at the proper time. However, under the system of payment of Structural Fund advances and the programme concept, advance financing by the SFs is supposed to be the norm. 6. 21. The second aspect was linked to the completion of the aid measures of the preceding periods and to the cases of overlapping in the commitment and payment periods at national level. Thus, during the first years of the new generation, expenditure that could have been eligible for both periods was allocated to that of 1989-1993 in order to finish up the still unused aid. This had the effect of reducing the potential expenditure for the 1994-1999 generation. This aspect had a great impact on the Member States and regions that had the largest backlogs in the closure of previous aid measures. 6. 22. The procedures for amending the SPDs and the aid measures of the new generation aimed at simplification by increasing the powers of the Monitoring Committees. However, in practice, the procedure that was followed was the formal adoption of new decisions by the Commission, a cumbersome procedure requiring the inter-departmental consultations and organisation of involving the same difficulties as those connected with the adoption of the CSFs/SPDs/OPs. In some cases, because of the delays, the proposals for amendments were obsolete even before they were decided on. Financial channels for Community 6. 23. The complexity of the financial channels at all levels (Community, national, banking), the periods of time needed for each authorising procedure and the large number of parties involved mean that it takes a very long time final funds beneficiaries. Furthermore, because of this complexity, it is difficult to monitor what stage of their journey the funds have reached. The Court has on several occasions referred to the difficulties arising from the duration and the diversity of the financial channels (16). reach the to 6. 24. As regards the funds reaching the beneficiaries, the coordination Regulation stipulates that the latter should receive the amounts of advances and payments in the shortest possible time which should not, as a rule, exceed three months from the date when the Member State received the beneficiaries’ claims satisfy the conditions stipulated for making the payment (17). As these conditions have not appropriations, provided that the been sufficiently defined, and bearing in mind the existing procedures, the periods of time taken to pass the funds on to the beneficiary are very variable. As a rule, payments to the beneficiaries are made by the national authorities as and when the Community payments are received, but the criteria and lengths of time taken for these payments depend on conditions over which the beneficiary has no control, such as the point in time when the expenditure threshold that triggers Community payment is crossed. In any case, the progress made by the measures concerned is not the main criterion. This being so, it becomes difficult to draw up estimates for the cash funds of the beneficiaries. two things happen 6. 25. When there are delays in carrying out an aid simultaneously. For measure, measures that are proceeding normally, the beneficiaries find themselves penalised by the delays in the other measures and have to arrange advance financing for them if they want to continue with them. In the case of measures that are proceeding very slowly or not at all, the beneficiaries are paid advances which they do not necessarily yet need. As part of SEM 2000 (18) and in the proposal for a new Regulation on the Structural Funds, the Commission tackled the question of the use of the interest likely to be generated by the funds thus paid to the final beneficiaries. It considered the possibility of the interest thus earned by the advances being allocated to the aid measure concerned, in order to ensure that this interest be used in compliance with the objectives of the Community operation. 6. 26. In the case of aid schemes where the body which grants the aid is regarded as the final beneficiary, the existing procedures, especially in some countries (such as Sweden or Finland), allow advances to be paid to the final beneficiaries only on certain conditions. As a result, Community advances remain with the administrating body pending the completion of the work or the investments. In cases where the aid schemes represent a significant part of the aid measures, and bearing in mind that the annual financial plans drawn up are unrealistic, these aid measures may proceed in accordance with the administrators’ estimates in terms of the decisions to grant aid the utilisation of Community appropriations will remain low until the completion of the investments and the payment of the aid that has been granted. to undertakings, but 6. 27. An analysis of the situation at 31 December 1996 regarding the OP for Saxony-Anhalt shows that the public expenditure increased from around 10 % in 1994 to 82 % in 1996 in relation to the initial plans, a rise (16) For example, the Annual Report of the Court of Auditors concerning the financial year 1993, paragraph 6. 5. (17) Article 21(5) of Regulation (EEC) No 4253/88. (18) See eligibility sheet No 8 (SEM 2000). C 347/58 EN Official Journal of the European Communities 16. 11. 98 which represented about 47 % of the total for the years 1994-1996 and 21 % of the total for the programme (19). However, if the decisions to grant aid are scrutinised, it transpires that the programme as a whole was already almost fully implemented (84 %). As a result, the delays in the implementation of the programme are not due to the to to programming that did not take into account the time taken for the implementation of the projects and the characteristics of the type of operation being co-financed. It should be noted that a considerable increase in the rates of aid in 1995 made it possible to allocate the Funds more quickly. lack of projects finance, but rather 6. 30. Most of the Member States cite difficulties in gathering financial data from the beneficiaries as a major factor in the delays in using appropriations. These difficulties lead not only to errors in the expenditure declarations but also to delays in drawing them up and, consequently, in the funds being received. These same difficulties, coupled with the length of the channels along which the data have to be sent, prevent the setting-up of procedures allowing a declaration of expenditure to be drawn up as soon as the threshold for triggering the payments has been reached. 6. 28. The way in which Community and national payments are concentrated at the end of the year and the fact that decisions relating to aid measures, whether they are initial decisions or amending ones, are adopted at the end of the year have adverse consequences for the beneficiaries, who, being subject to annual budgets, can only watch whilst their estimates are undermined or are modified. If the funds arrive in the following financial year, lengthy budgetary procedures are often needed to integrate these funds into their budgets. In some Member States, these funds are not allowed to be entered in the budget and used unless their arrival can be guaranteed. In other cases, the appropriations that are not used at the year-end are not automatically carried over. 6. 29. One of the weakest points in the management of the aid measures is the financial and physical monitoring of the operations that are being carried out. As there are many operations and the beneficiaries are scattered, effective procedures need to be set up making it possible to monitor the operations and their expenditure by co-financed operation. These beneficiary and by it easier to draw up the procedures should make declarations of expenditure, which must, moreover, be based on a suitable set of accounts (20). The Court has noted (21), in particular in the context of the DAS, that these declarations of expenditure are not always reliable, bearing in mind the unsuitable nature of the procedures introduced for drawing them up and checking them (22). (19) See ‘Interim evaluation of the measures taken under the EU Structural Funds in Saxony-Anhalt in the period from 1994 to 1996’ — Ministry for Economic Affairs, Technology and European matters — Saxony-Anhalt. (20) The financial implementation provisions applicable to the aid measures included in the CSFs, SPDs provide for systems of separate accounting to be used. (21) Annual Report of the European Court of Auditors concerning the financial year 1996, paragraph 6. 25. DAS report of the European Court of Auditors concerning the financial years 1996, 1995 and 1994. (22) The new Regulation (EC) No 2064/97 of 15 October 1997 aims to provide a better framework for the financial control carried out by the Member States on the operations co-financed by the Structural Funds (OJ L 290, 23. 10. 1997, p. 1). 6. 31. The national administrators are not always aware of the thresholds triggering the Community payments. Furthermore, additional delays occur once the data have been gathered because they have to be processed, certified and passed on. In Sardinia, payment claims were not triggering submitted, even payments had been exceeded. The expenditure incurred by 31 March 1997 had reached a level that would have allowed payment of the 1994 balance and of the first two advances for 1995, i. e. 68,8 Mio ECU, but it was not until October 1997 that an additional expenditure declaration was sent to the Commission. considerably thresholds though the 6. 32. The number of cases arising where disbursement of several payments is requested on the basis of a single expenditure declaration confirms the need to make more checks to ensure that the Member States submit their claims on the basis of a programme staggered throughout the year, as stipulated in Article 19. 3 of the coordination time Regulation. Furthermore, the Commission the declarations and authorising payment should not exceed two months starting from the date on which a valid claim is received, but this time-limit is not always complied with, especially as regards payments of balances (23). the scrutinising taken by for 6. 33. All the time taken to transmit and process the data delays the payment of Community appropriations. Their level of utilisation is not representative of the true state of progress of the aid measure, which is only partly known when the annual reports are being drawn up or when meetings of the Monitoring Committees are held. Mobilisation of resources 6. 34. Difficulties arise in using the national, regional and private counterpart funds in accordance with the planned the ex ante assessments are weak or in cases where there are no prior feasibility studies taking into account the procedural time timetable, especially when (23) See Special Report on the closure of the ERDF forms of intervention. 16. 11. 98 EN Official Journal of the European Communities C 347/59 needed. The optimistic nature of the financing plans for the operations becomes apparent when it comes to actually preparing the implementation of certain projects and when use of the counterpart funds gets under way. in cases involving 6. 35. The task of mobilising public resources takes time, and this is often underestimated. Thus, it is virtually inevitable that there will be delays or even log jams, especially large-scale projects or innovative measures, which are usually complex. When the regional and local authorities that receive the aid do not have a large degree of financial independence, the delays in the payment of the national counterpart funds have a knock-on effect on the implementation of the operations, as the Court has already pointed out (24). 6. 39. This is also the case for the OPs in the new German Länder, which are based on private investment. An analysis of the co-financed projects made during the evaluation process for the Saxony-Anhalt OP showed that 30 % of the projects were suffering from delays of about two years. The amount of the investments underwent considerable changes in 41 % of the projects (27 % to increase the investments and 14 % to reduce them). The scale of these modifications and delays also in the ex ante evaluations of shows shortcomings projects. Some of the chief reasons cited by the beneficiaries to explain the main delays in the investments or their reduction during implementation include not only the length of the procedures needed before the work can be started but also the economic situation of their sector, the overall trend in their business, financing and cash-flow problems and delays due to suppliers and service providers. 6. 36. The SPD for Corsica was based on major public infrastructure projects, in particular the main road from Ajaccio to Bastia, the treatment of waste water, refuse treatment and water-supply works. Sometimes major projects have not yet been the subject of an agreement in respect of their implementation (road project) or it has been very difficult to find counterpart funds (public building). This has led to delays in settling the financial plans or even to a project that was originally planned being abandoned. funds 6. 37. Thus, for the projects relating to refuse treatment under this SPD, for want of sufficient public counterpart funds for financing two incinerators, the authorities tried to mobilise private counterpart through a ‘public-service delegation’ whereby the private sector carries out a project intended for the general public and runs it at a profit by means of an operating concession. However, because the negotiations with the Commission to re-define the concept of eligible expenditure took a long time (more than 15 months) and because of legal problems, all that was achieved was that implementation of these operations may still be envisaged within the framework of the SPD. 6. 38. The mobilisation of private counterpart funds is difficult to control, because it depends on numerous factors. For this mobilisation to take place, the files have to be sufficiently well advanced and their feasibility properly established. Within the framework of the aid measures where there is considerable private involvement, the investments are affected by the economic situation and their progress is less easy to forecast. This is the case for the O2 programmes, which are aimed at regions suffering from industrial decline. (24) For example, see the Annual Report concerning the financial year 1996, paragraphs 7. 52-7. 57. that replied the authorities 6. 40. The budgetary restrictions relating in particular to the stabilising of public finances in the run-up to the creation of the economic and monetary union are not regarded by the questionnaire as one of the most important factors in the low rate of utilisation of appropriations. There was not found to be any connection between these restrictions and the level of use of Community appropriations, which has been on the increase since 1994. A study on this subject drawn up on behalf of the European Parliament concludes that this trend was not found to have any direct influence on the implementation of appropriations in the various cases examined by the authors (25). to 6. 41. Several reasons may be cited to explain this situation. On the one hand, the authorities of the Member States have endeavoured not to curtail their budgetary contribution to the co-financed operations so as to avoid delaying the arrival of Community funds. On the other hand, the changes made to the programmes make it possible, by replacing measures, to select the projects for which national counterpart funds are available. at still projects which were 6. 42. New the drawing-board stage were introduced into the OP for Sardinia. This policy, which is, moreover, the one most in keeping with the spirit of the regulations, should have been accompanied by financial plans that took account of the lengthiness of the procedures. The latter mean that in many cases the projects do not get off the ground until some years after they have been decided. It should be (25) Factors influencing the utilisation of Structural Fund appropriations. European Parliament. Directorate-General for Studies. June 1997. C 347/60 EN Official Journal of the European Communities 16. 11. 98 borne in mind that it is not the lack of national public appropriations to assist regional development in Sardinia that is behind the difficulties in making use of the Community appropriations. The regional budget made for a volume of expenditure provision potentially eligible for co-financing that was comparable to that of the public expenditure planned in the programme for the entire period 1994-1999. for 1997 in 6. 43. The variations the national currency/ecu exchange rate have adverse effects on the utilisation of Community appropriations. These effects stem from the fact that the measures are implemented in national currency and that the accounts for their aid measures and their financial plans are drawn up in ecu. In the event of a devaluation, there needs to be an increase in the expenditure in national currency in order to achieve the amounts provided for in ecu. If there is a revaluation, this leads the Community counterpart, which has to be covered by national expenditure. relative decrease to a in to the amendments 6. 44. In both cases, the programming is thus altered and, if there is no speedy reaction, the impact may be the if considerable, especially exchange rate occur at the end of the period. In Italy, the failure to take effective action in response to this situation had adverse repercussions on the closure of the preceding period. In other Member States, provision was made for measures to alleviate the consequences of this situation, such as making the declaration of expenditure in ecu, making the declaration of expenditure in national currency at a faster rate or creating stocks of projects (overbooking). Implementation 6. 45. Despite the length of time that has elapsed since the 1988 reform of the SFs, the beneficiaries are still rules and familiar with Community insufficiently procedures. The difficulties experienced in Sardinia concerning key elements of the aid measure, such as the terms ‘commitment’, ‘final beneficiary’ and ‘eligibility of expenditure’, could have been curtailed if they had been the partnership. The clarified misunderstandings eligible expenditure, which have led to the total cost being taken into account instead of the public expenditure, have had as a consequence a delay in the implementation of 38,3 Mio ECU of Community appropriations. the context of to determining relating in unforeseeable, others ought to have been borne in mind when the programming was being carried out. By way of example, the new Member States had to introduce major changes to their procedures and departments in order to adapt themselves to the management mechanisms of the Community programmes, which gave rise to lengthy delays in relation to the programming, which was drawn up as though the administrators and procedures were operational from the very beginning of the period. In Greece, the implementation of the industry OP required 21 new legislative texts or regulations. 6. 47. Where Article 24 of Regulation (EEC) No 4253/88 on the reduction, suspension and suppression of aid is applied, even though this does not happen frequently, this may have an effect, even indirectly, on the progress of the programmes. By way of example, one of the Spanish programmes (Cantabria) suffering from delays was affected by the reimbursement of amounts that were not used for implementing a major project during the period 1989-1991 (26). Furthermore, delays in this programme also stemmed from the fact that the 1994 regional budget was not adopted until March 1995. In the end, the 1994 tranche had to be cancelled and the 1995 one considerably reduced. There are also — more frequent — cases where the Commission de facto suspends payments for several months or even several years, whilst waiting for its disagreements with the Member State concerned to be settled (27). 6. 48. Several administrators have cited examples of delays connected with the lack of suitable coordination at the Commission. Where different departments each interpret matters differently, this has an adverse effect on the way the aid measures are managed, without the Member States always being aware of the reasons for these delays. One of the main difficulties encountered by the administrators of the multi-fund Hainaut SPD was due to three projects being charged to the ESF rather than to the ERDF, thus requiring the transfer of the funds relating thereto, and to the different financial management systems of the Funds (multiannual for the ERDF and the EAGGF, annual for the ESF). According to the administrators concerned, this situation has led to a delay of several months in the ESF payments. 6. 49. The balance of each commitment is not paid until the annual implementation report has been drawn up and sent to the Commission and then approved by the latter. These stages continue to lead to delays. In some cases, In several cases, the delays can be attributed to 6. 46. exceptional circumstances, such as the reorganisation of departments, political changes, natural catastrophes or changes in the administrative environment. Whilst some their very nature of these circumstances are by (26) See the Annual Report of the European Court of Auditors concerning the financial year 1994, paragraph 4. 74. (27) See the Annual Reports of the Court of Auditors concerning the financial years 1994 and 1995, paragraphs 5. 42-5. 44 and paragraphs 6. 16-6. 19. 16. 11. 98 EN Official Journal of the European Communities C 347/61 the payment of the balance cannot be made because the corresponding authorities have failed to present the required annual report or because this report is not of a sufficiently high standard. involving some 12 Mio ECU had to be replaced following the Court’s audit. 6. 50. It often happens that where there are delays or failures concerning a measure or a project that accounts for a large portion of the OP in financial terms, the whole of the aid measure is put into jeopardy. The aid measure’s financial progress is held up whilst waiting for the amendment procedures to be finalised. In Sardinia, in the case of two projects accounting for 28 % and 35 % of the total cost, implementation had not even started halfway through the period. The programme was not amended until December 1997, despite the fact that the various partners involved had pointed out the need to its change implementation. beginning from right the of it 6. 51. The individual operations and projects often encounter difficulties which mean that they are late in getting off the ground in relation to the beneficiaries’ forecasts. The latter tend to be over-optimistic, a tendency fuelled by the lack of any feasibility studies and the administrators’ practice of accepting these forecasts without checking whether they are plausible. During the procedures concerning expropriation, the tendering of public contracts or the evaluation of the environmental impact, it is rare for delays not to occur. 6. 52. From a detailed analysis of the OPs for Sardinia and Corsica it is apparent that the implementation delays stemmed from the periods of time that were inherent in the procedures or were needed to reach agreements between the various partners. In the case of the most the important measure of gasification plant, the technical difficulties experienced in carrying out the project and the problems in agreeing on the financial plan with the banking partners had not yet made it possible to finalise the drafting of the project. In the end, this measure was cancelled when the programme was amended in December 1997. for Sardinia, the OP are there sometimes 6. 53. Furthermore, other circumstances that give rise to delays and cost increases: for example, unforeseen technical difficulties may occur, contractors may go bankrupt, additional work may have to be done, etc. These delays are exacerbated by the slowness of the procedures to amend the measures concerned, to take account of these circumstances or changes in priorities. The irregular expenditure found during the checks may also give rise to delays, in view of the fact that these items of expenditure have to be withdrawn the expenditure declarations and replaced by those from alternative projects. This was the case in Saxony-Anhalt where a major investment project from 7. CONCLUSION 7. 1. The way in which the budget estimates are drawn up needs to be improved in order to avoid cases of under-utilisation of appropriations and to cut back the volume of transfers. governing provisions 7. 2. The budgetary implementation of the structural operations, especially those relating to commitment by annual tranches, need to be reviewed so as to ensure consistency with the Financial Regulation and with all the budgetary provisions. the the In revising the provisions governing the financial 7. 3. and budgetary structural implementation of operations, the aim should be to make them simpler, more transparent and less cumbersome. The proposals relating to the new Structural Fund Regulations which the Commission presented on 18 March 1998 contain a simplification in this area, in particular by introducing for new rules indexing. for commitments by tranche and reproducing 7. 4. To date, the financial programming of the CSFs and the forms of intervention of the structural operations has been done by the chart of annual expenditure set out in the financial perspective. It is very hard for this approach to take account of feasibility on the ground and it results in a muddled picture being given of the implementation of the aid measures. The financial plans are of little practical use and they are amended time and again and yet they still do not reflect the actual estimates for the implementation of the measures any better. The fact that the amounts recurring annually are concentrated in the latter years of the programming period could lead to difficulties in closing the aid measures for the period 1994-1999, thus reproducing the situation observed at the time of the closure of the aid measures for the preceding periods (28). For the forthcoming period 2000-2006, every effort should be made to ensure that there is genuinely meaningful programming based on a realistic timetable. 7. 5. Improved information systems at the Commission and in the Member States would make it possible for all the partners to have a reliable, up-to-date picture at any time of the situation regarding the aid measures and the (28) Special Reports on the closure of the ERDF aid measures and of O5b. C 347/62 EN Official Journal of the European Communities 16. 11. 98 projects receiving Community co-financing (29). One step in the right direction that has been considered in the recent proposals for a regulation for the SFs is to require implementation reports to be drawn up by calendar year instead of by tranche, but this would not suffice unless the data in these reports were better analysed and used. Making the SF financing more transparent should be a priority aim and, to this end, better use should be made of computer techniques. 7. 6. In order to make the rules for paying funds to beneficiaries more transparent, the Commission should make plans together with the Member States for measures to improve the financial channels and to shorten the time taken for payments to be made at all levels, as already recommended by the Financial Controller in his report on this subject, drawn up in 1992 (30). If more frequent use were made of the accounts opened on behalf of the Commission with the national own resources (31), this would have the effect of cutting down the number of operations and intermediaries involved in the transfers between the Commission and the Member States. for making treasuries available in improvement 7. 7. It is clear from the causes of the delays found in the use of Community appropriations that there is still room for the SF management systems. Programming continues to be weak, as do the ex ante evaluation and the analysis of the feasibility of the aid measures and their operations and projects. Processing of the financial data at all levels of management still takes a long time. When measures are being planned, the time taken for implementing the various procedures needed is often underestimated. The Community management procedures are usually cumbersome and slow and they still dovetail poorly with the national procedures, especially at budgetary in mind the shortcomings that have been found, the partnership should be strengthened and the Monitoring Committees’ role and the way they work should be reviewed. level. Bearing 7. 8. Despite the shortcomings pointed out in this report, credit should be given to the Commission and to many national administrators for the efforts they have made. These efforts need to be stepped up, particularly in the context of the partnership, in order to improve the management of the structural operations. This report was adopted by the Court of Auditors in Luxembourg at its meeting on 23 September 1998. For the Court of Auditors Bernard FRIEDMANN President (29) Aimed particularly at more precise and more easily accessible information on the projects that are financed (Annual Report of the Court of Auditors concerning the financial year 1997, Chapter 8 relating to the DAS, paragraph 8. 66). (30) SEC(92) 1912 final of 5. 11. 1992. Final report on the financial channels relating to the transfer of Structural Fund payments to the Member States. (31) Regulation (EEC, Euratom) No 1552/89, Art. 9. 16. 11. 98 EN Official Journal of the European Communities C 347/63 Annual distribution of the Structural Fund and FIFG resources available for commitment for the period 1994-1999 Allocation of the Structural Funds to the existing Members States (at 1992 prices and in Mio ECU) Table 1 1994 1995 1996 1997 1998 1999 1994-1999 Objective 1 13 220 14 300 15 330 16 396 17 820 19 280 96 346 Objectives 2-5b 6 915 7 180 7 410 7 630 7 870 8 120 45 125 Total 20 135 21 480 22 740 24 026 25 690 27 400 141 471 Overall (in %) 14,23 % 15,18 % 16,07 % 16,98 % 18,16 % 19,37 % 100,00 % Objective 1 (in %) 13,72 % 14,84 % 15,91 % 17,02 % 18,50 % 20,01 % 100,00 % Objectives 2-5b (in %) 15,32 % 15,91 % 16,42 % 16,91 % 17,44 % 17,99 % 100,00 % Source: Conclusions of the Presidency. Edinburgh European Council of 11-12 December 1992. Allocation of the Structural Funds to the new Member States (at 1995 prices and in Mio ECU) Objective 1 Objectives 2-5b Objective 6 Total 1995 1996 1997 1998 1999 1995-1999 32 728 131 891 34 749 138 921 37 765 147 949 39 782 159 980 42 798 166 184 3 822 741 1 006 4 747 Overall (in %) 18,77 % 19,40 % 19,99 % 20,64 % 21,19 % 100,00 % Objective 1 (in %) 17,39 % 18,48 % 20,11 % 21,20 % 22,83 % 100,00 % Objectives 2-5b (in %) 19,05 % 19,60 % 20,02 % 20,46 % 20,88 % 100,00 % Objective 6 (in %) 17,68 % 18,62 % 19,84 % 21,46 % 22,40 % 100,00 % Source: Council Decision of 1. 1. 1995 adapting the instruments relating to the accession of new Member States (OJ L 1, 1. 1. 1995, p. 1). Comparison between resources available under the CSFs, for the entire period 1994-1999, and the implementation by objective and by Member State (EUR 12) Table 2 Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal U. Kingdom Total (Mio ECU) 748,5 457,8 349,7 267,6 46,7 % 35,7 % 76,4 % 58,4 % 13 985,3 8 554,0 8 447,3 6 754,6 60,4 % 14 333,9 8 767,2 8 530,0 6 129,8 59,5 % 26 965,8 16 493,4 17 634,6 13 553,2 65,4 % 2 245,4 1 373,4 967,9 821,3 43,1 % 5 762,3 3 524,4 3 612,6 3 192,3 62,7 % 15 236,2 9 319,1 8 608,2 5 072,9 56,5 % 153,8 94,1 57,7 51,1 37,5 % 14 333,9 8 767,2 9 870,6 7 952,4 68,9 % 2 419,7 1 480,0 1 490,9 1 117,2 61,6 % 96 184,9 58 830,5 59 569,5 44 912,5 61,9 % 48,3 % 42,8 % 50,3 % 36,6 % 55,4 % 33,3 % 33,3 % 55,5 % 46,2 % 46,7 % 98,8 % 97,3 % 106,9 % 70,5 % 102,5 % 92,4 % 61,3 % 112,6 % 100,7 % 101,3 % 79,0 % 69,9 % 82,2 % 59,8 % 90,6 % 54,4 % 54,4 % 90,7 % 75,5 % 76,3 % 349,4 222,2 226,0 152,4 64,7 % 123,0 78,0 86,1 63,4 70,0 % 1 604,8 1 019,2 1 056,9 720,2 65,9 % 2 474,8 1 571,5 1 263,5 842,0 51,1 % 3 866,4 2 454,9 2 320,3 1 685,3 60,0 % 1 498,2 951,3 936,3 524,8 15,4 9,7 15,7 9,2 62,5 % 101,9 % 666,2 420,2 361,6 238,0 54,3 % 4 693,4 2 979,7 2 704,4 2 011,7 57,6 % 15 291,6 9 706,7 8 970,8 6 246,8 58,7 % 43,6 % 51,6 % 44,9 % 34,0 % 43,6 % 35,0 % 59,8 % 35,7 % 42,9 % 40,9 % 101,7 % 110,4 % 103,7 % 80,4 % 94,5 % 98,4 % 160,6 % 86,1 % 90,8 % 92,4 % 68,6 % 81,3 % 70,7 % 53,6 % 68,7 % 55,2 % 94,3 % 56,6 % 67,5 % 64,4 % 476,5 303,1 297,8 308,4 196,2 189,7 1 990,0 1 265,7 1 038,9 1 888,6 1 201,2 1 135,9 3 282,2 2 087,6 1 706,1 1 757,4 1 117,8 1 085,8 23,6 15,0 14,1 1 105,7 703,3 680,9 3 460,5 2 201,0 2 603,1 14 292,9 9 090,9 8 752,2 235,7 170,5 874,1 882,1 1 361,8 498,8 13,3 583,1 1 688,8 6 308,2 62,5 % 61,5 % 52,2 % 60,1 % 52,0 % 61,8 % 59,7 % 61,6 % 75,2 % 61,2 % Objective 1 1994-1999 Objective 1 1994-1997 Commitments 1994-1997 Payments 1994-1997 Commitments 1994-1997/Estimates 1994-1999 Payments 1994-1997/Estimates 1994-1999 Commitments 1994-1997/Estimates 1994-1997 Payments 1994-1997/Estimates 1994-1997 Objective 2 1994-1999 Objective 2 1994-1997 Commitments 1994-1997 Payments 1994-1997 Commitments 1994-1997/Estimates 1994-1999 Payments 1994-1997/Estimates 1994-1999 Commitments 1994-1997/Estimates 1994-1997 Payments 1994-1997/Estimates 1994-1997 Objectives 3 and 4 1994-1999 Objectives 3 and 4 1994-1997 Commitments 1994-1997 Objectives 3 + 4 Payments 1994-1997 Objectives 3 + 4 Commitments 1994-1997/Estimates 1994-1999 C 3 4 7 6 4 / E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n C o m m u n i t i e s 1 6. 1 1. 9 8 Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal U. Kingdom Total (Mio ECU) 49,5 % 55,3 % 43,9 % 46,7 % 41,5 % 28,4 % 56,3 % 52,7 % 48,8 % 44,1 % 98,3 % 96,7 % 82,1 % 94,6 % 81,7 % 97,1 % 93,9 % 96,8 % 118,3 % 96,3 % 77,8 % 86,9 % 69,1 % 73,4 % 65,2 % 44,6 % 88,5 % 82,9 % 76,7 % 69,4 % 174,0 130,0 1. 093,3 333,7 1 783,2 696,1 39,9 120,8 369,6 4 740,6 116,1 86,6 726,2 221,0 1 184,6 462,4 26,5 79,5 245,5 3 148,3 105,4 80,0 77,8 61,8 683,9 533,2 60,6 % 59,8 % 62,6 % 165,2 142,6 1 123,6 817,1 49,5 % 63,0 % 372,1 239,5 16,5 15,2 39,3 21,0 53,5 % 41,4 % 32,6 % 126,6 2 710,4 97,2 2 007,6 34,2 % 57,2 % 46,0 % 47,6 % 48,8 % 42,7 % 45,8 % 34,4 % 38,0 % 17,4 % 26,3 % 42,3 % 90,8 % 89,8 % 94,2 % 74,8 % 94,8 % 80,5 % 62,3 % 49,5 % 51,6 % 86,1 % 68,9 % 71,4 % 73,4 % 64,5 % 69,0 % 51,8 % 57,3 % 26,4 % 39,6 % 63,8 % 25,1 143,2 76,3 122,5 194,4 16,6 95,1 50,5 81,1 128,9 24,7 19,6 69,9 58,2 37,8 28,9 82,3 65,9 94,9 66,4 137,6 91,3 47,6 25,6 1,1 0,9 1,1 0,3 47,7 31,6 15,6 12,7 90,8 838,8 60,1 556,1 45,4 40,9 419,2 318,5 98,6 % 48,8 % 49,5 % 67,2 % 48,8 % 34,6 % 98,0 % 32,6 % 50,0 % 50,0 % 78,2 % 40,7 % 37,8 % 53,8 % 34,2 % 18,6 % 29,4 % 26,5 % 45,0 % 38,0 % 149,0 % 73,5 % 74,7 % 101,5 % 73,6 % 52,2 % 120,1 % 49,3 % 75,5 % 75,4 % 118,3 % 61,2 % 57,1 % 81,2 % 51,5 % 28,0 % 36,0 % 40,1 % 68,0 % 57,3 % Payments 1994-1997/Estimates 1994-1999 Commitments 1994-1997/Estimates 1994-1997 Payments 1994-1997/Estimates 1994-1997 Objective 5a (agriculture sector) 1994-1999 Objective 5a (agriculture sector) 1994-1997 Commitments 1994-1997 Payments 1994-1997 Commitments 1994-1997/Estimates 1994-1999 Payments 1994-1997/Estimates 1994-1999 Commitments 1994-1997/Estimates 1994-1997 Payments 1994-1997/Estimates 1994-1997 Objective 5a (fisheries sector) 1994-1999 Objective 5a (fisheries sector) 1994-1997 Commitments 1994-1997 Payments 1994-1997 Commitments 1994-1997/Estimates 1994-1999 Payments 1994-1997/Estimates 1994-1999 Commitments 1994-1997/Estimates 1994-1997 Payments 1994-1997/Estimates 1994-1997. 1 6 1 1 9 8. E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n C o m m u n i t i e s C 3 4 7 / 6 5 Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Portugal U. Kingdom Total (Mio ECU) 78,9 51,2 24,9 14,8 31,6 % 55,3 35,9 24,2 20,5 43,7 % 1 257,3 816,0 719,3 531,1 57,2 % 680,4 441,6 425,7 331,2 62,6 % 2 293,3 1 488,3 1 170,2 870,2 51,0 % 923,3 599,2 278,8 136,4 30,2 % 6,1 4,0 2,6 2,0 42,8 % 153,7 99,8 62,3 44,5 40,5 % 837,2 543,3 358,0 250,9 42,8 % 6 285,7 4 079,1 3 065,9 2 201,6 48,8 % 18,7 % 37,1 % 42,2 % 48,7 % 37,9 % 14,8 % 32,6 % 29,0 % 30,0 % 35,0 % 48,6 % 67,4 % 88,1 % 96,4 % 78,6 % 46,5 % 65,9 % 62,4 % 65,9 % 75,2 % 28,8 % 57,1 % 65,1 % 75,0 % 58,5 % 22,8 % 50,3 % 44,6 % 46,2 % 54,0 % 1 852,4 1 167,0 1 028,6 770,0 55,5 % 759,9 491,8 447,6 374,5 58,9 % 20 007,0 12 431,6 11 983,9 9 442,1 59,9 % 14 333,9 8 767,2 8 530,0 6 129,8 59,5 % 32 465,8 20 009,8 20 707,2 15 816,9 63,8 % 13 664,9 8 717,7 7 383,0 5 622,2 54,0 % 5 762,3 3 524,4 3 612,6 3 192,3 62,7 % 20 248,8 12 541,1 11 328,9 6 497,9 55,9 % 86,1 56,1 50,0 40,0 58,1 % 2 247,9 1 428,5 1 217,4 950,4 54,2 % 14 333,9 8 767,2 9 870,6 7 952,4 68,9 % 11 871,2 137 634,5 85 411,6 83 488,2 61 995,3 60,7 % 7 509,6 7 328,4 5 206,7 61,7 % 41,6 % 49,3 % 47,2 % 42,8 % 48,7 % 41,1 % 55,4 % 32,1 % 46,4 % 42,3 % 55,5 % 43,9 % 45,0 % 88,1 % 91,0 % 96,4 % 97,3 % 103,5 % 84,7 % 102,5 % 90,3 % 89,1 % 85,2 % 112,6 % 97,6 % 97,7 % 66,0 % 76,1 % 76,0 % 69,9 % 79,0 % 64,5 % 90,6 % 51,8 % 71,3 % 66,5 % 90,7 % 69,3 % 72,6 % Objective 5b 1994-1999 Objective 5b 1994-1997 Commitments 1994-1997 Payments 1994-1997 Commitments 1994-1997/Estimates 1994-1999 Payments 1994-1997/Estimates 1994-1999 Commitments 1994-1997/Estimates 1994-1997 Payments 1994-1997/Estimates 1994-1997 Total Estimates 1994-1999 Total Estimates 1994-1997 Commitments 1994-1997 Payments 1994-1997 Commitments 1994-1997/Estimates 1994-1999 Payments 1994-1997/Estimates 1994-1999 Commitments 1994-1997/Estimates 1994-1997 Payments 1994-1997/Estimates 1994-1997 Source: Drawn up by the European Court of Auditors on the basis of SINCOM. C 3 4 7 6 6 / E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n C o m m u n i t i e s 1 6. 1 1. 9 8 16. 11. 98 EN Official Journal of the European Communities C 347/67 Comparison between the resources available under the CSFs, for the entire period, and the implementation by objective and by Member State (EUR 3) Table 3 Austria Finland Sweden Total (Mio ECU) Objective 1 1995-99 Objective 1 1995-97 Commitments 1995-97 Payments 1995-97 Commitments 1995-97/Estimates 1995-99 Payments 1995-97/Estimates 1995-99 Commitments 1995-97/Estimates 1995-97 Payments 1995-97/Estimates 1995-97 Objective 2 1995-99 Objective 2 1995-97 Commitments 1995-97 Payments 1995-97 171,5 93,9 83,76 55,74 48,9 % 32,5 % 89,2 % 59,4 % 104,4 60,9 77,2 57,2 171,5 93,9 83,76 55,74 48,9 % 32,5 % 89,2 % 59,4 % 459,1 266,4 292,2 194,0 165,4 96,2 109,3 73,3 189,3 109,3 105,8 63,6 Commitments 1995-97/Estimates 1995-99 73,9 % 66,1 % 55,9 % 63,6 % Payments 1995-97/Estimates 1995-99 54,8 % 44,3 % 33,6 % 42,3 % Commitments 1995-97/Estimates 1995-97 126,6 % 113,6 % 96,8 % 109,7 % Payments 1995-97/Estimates 1995-97 93,9 % 76,2 % 58,2 % 72,8 % Objectives 3 and 4 1995-99 Objectives 3 and 4 1995-97 Commitments 1995-97 Objectives 3 + 4 Payments 1995-97 Objectives 3 + 4 408,3 238,8 298,0 219,0 354,1 218,1 212,7 132,3 537,6 312,6 203,1 123,8 1 300,0 769,4 713,8 475,1 Commitments 1995-97/Estimates 1995-99 73,0 % 60,1 % 37,8 % 54,9 % Payments 1995-97/Estimates 1995-99 53,6 % 37,4 % 23,0 % 36,5 % Commitments 1995-97/Estimates 1995-97 124,8 % 97,6 % 65,0 % 92,8 % Payments 1995-97/Estimates 1995-97 91,7 % 60,7 % 39,6 % 61,8 % Objective 5a (agricultural sector) 1995-99 Objective 5a (agricultural sector) 1995-97 Commitments 1995-97 Payments 1995-97 399,0 232,8 207,5 189,1 342,3 198,3 181,9 166,7 173,7 101 54,0 48,7 915,0 532,1 443,5 404,5 Commitments 1995-97/Estimates 1995-99 52,0 % 53,1 % 31,1 % 48,5 % Payments 1995-97/Estimates 1995-99 47,4 % 48,7 % 28,1 % 44,2 % Commitments 1995-97/Estimates 1995-97 89,1 % 91,7 % 53,5 % 83,3 % Payments 1995-97/Estimates 1995-97 81,2 % 84,0 % 48,2 % 76,0 % C 347/68 EN Official Journal of the European Communities 16. 11. 98 Objective 5a (fisheries sector) 1995-99 Objective 5a (fisheries sector) 1995-97 Commitments 1995-97 Payments 1995-97 Austria Finland Sweden Total (Mio ECU) 2,1 1,2 2,0 1,0 23,8 13,6 23,0 18,4 41,4 24,0 40,2 32,0 67,2 38,9 65,2 51,4 Commitments 1995-97/Estimates 1995-99 96,8 % 96,7 % 97,2 % 97,0 % Payments 1995-97/Estimates 1995-99 48,4 % 77,3 % 77,4 % 76,5 % Commitments 1995-97/Estimates 1995-97 162,7 % 168,9 % 167,2 % 167,7 % Payments 1995-97/Estimates 1995-97 81,3 % 135,1 % 133,1 % 132,2 % Objective 5b 1995-99 Objective 5b 1995-97 Commitments 1995-97 Payments 1995-97 424,9 247,9 179,6 137,2 201 104,5 85,9 54,3 142,7 83,0 69,5 40,0 768,5 435,4 335,1 231,5 Commitments 1995-97/Estimates 1995-99 42,3 % 42,8 % 48,7 % 43,6 % Payments 1995-97/Estimates 1995-99 32,3 % 27,0 % 28,0 % 30,1 % Commitments 1995-97/Estimates 1995-97 72,5 % 82,3 % 83,8 % 77,0 % Payments 1995-97/Estimates 1995-97 55,3 % 52,0 % 48,2 % 53,2 % Objective 6 1995-99 Objective 6 1995-97 Commitments 1995-97 Payments 1995-97 Commitments 1995-97/Estimates 1995-99 Payments 1995-97/Estimates 1995-99 Commitments 1995-97/Estimates 1995-97 Payments 1995-97/Estimates 1995-97 475,9 263,9 272,3 163,7 260,7 146,0 80,1 60,0 736,6 410,0 352,4 223,8 57,2 % 30,7 % 47,8 % 34,4 % 23,0 % 30,4 % 103,2 % 54,8 % 86,0 % 62,0 % 41,1 % 54,6 % Total Estimates 1995-99 Total Estimates 1995-97 Commitments 1995-97 Payments 1995-97 1 510,2 1 562,5 1 345,4 4 417,9 875,5 848,1 659,2 894,6 885,1 608,6 775,9 552,7 368,1 2 546,1 2 285,9 1 636,0 Commitments 1995-97/Estimates 1995-99 56,2 % 56,6 % 41,1 % 51,7 % Payments 1995-97/Estimates 1995-99 43,7 % 39,0 % 27,4 % 37,0 % Commitments 1995-97/Estimates 1995-97 96,9 % 98,9 % 71,2 % 89,8 % Payments 1995-97/Estimates 1995-97 75,3 % 68,0 % 47,4 % 64,3 % Source: Drawn up by the European Court of Auditors on the basis of SINCOM. 16. 11. 98 EN Official Journal of the European Communities C 347/69 Comparison between the resources available under the Community initiatives, for the entire period 1994-1999, and the budgetary implementation by initiative and by year Table 4 Year of the commitment (Mio ECU) 1994 1995 1996 1997 1994-1997 1998 1999 Grand Total Interreg II Estimates Commitments 1994-1997 Payments 1994-1997 438,9 0,0 0,0 508,0 557,9 227,7 523,0 752,0 423,5 551,8 2 021,6 747,4 793,3 458,6 1 768,5 357,6 1 008,8 Commitments/Estimates 0,0 % 58,9 % 89,1 % 87,5 % 87,5 % Payments/Estimates 0,0 % 24,1 % 44,3 % 49,9 % 49,9 % 3 562,3 1 768,5 1 008,8 49,6 % 28,3 % Leader II Estimates Commitments 1994-1997 Payments 1994-1997 217,0 0,3 0,0 244,9 468,5 132,7 257,9 251,7 133,6 273,9 157,8 104,1 993,8 878,3 370,4 Commitments/Estimates 0,1 % 101,5 % 100,1 % 88,4 % 88,4 % Payments/Estimates 0,0 % 28,7 % 37,0 % 37,3 % 37,3 % 379,2 404,2 1 777,2 878,3 370,4 49,4 % 20,8 % ADAPT Estimates Commitments 1994-1997 Payments 1994-1997 207,9 0,0 0,0 231,7 307,7 152,6 244,9 222,4 87,0 260,9 125,4 147,9 945,3 655,5 387,5 Commitments/Estimates 0,0 % 70,0 % 77,5 % 69,3 % 69,3 % Payments/Estimates 0,0 % 34,7 % 35,0 % 41,0 % 41,0 % 339,8 361,4 1 646,4 655,5 387,5 39,8 % 23,5 % SME Estimates Commitments 1994-1997 Payments 1994-1997 147,0 0,0 0,0 158,8 203,5 67,7 176,9 181,9 88,7 190,0 133,3 123,6 672,7 518,8 280,1 Commitments/Estimates 0,0 % 66,6 % 79,9 % 77,1 % 77,1 % Payments/Estimates 0,0 % 22,1 % 32,4 % 41,6 % 41,6 % 203,5 216,2 1 092,5 URBAN Estimates Commitments 1994-1997 Payments 1994-1997 107,1 0,0 0,0 121,7 157,4 58,1 124,2 215,0 108,1 129,5 118,1 75,6 482,6 490,5 241,9 199,5 212,5 Commitments/Estimates 0,0 % 68,8 % 105,5 % 101,6 % 101,6 % Payments/Estimates 0,0 % 25,4 % 47,1 % 50,1 % 50,1 % PESCA Estimates Commitments 1994-1997 Payments 1994-1997 38,1 23,7 11,8 42,1 29,4 5,3 44,6 134,6 20,6 47,4 21,5 33,8 172,2 209,1 71,6 62,7 66,6 Commitments/Estimates 62,2 % 66,2 % 150,4 % 121,4 % 121,4 % Payments/Estimates 31,1 % 21,4 % 30,3 % 41,6 % 41,6 % Rechar II Estimates Commitments 1994-1997 Payments 1994-1997 95,1 0,0 0,0 102,7 172,5 75,6 108,6 119,9 61,6 116,7 113,3 75,4 423,1 405,8 212,7 20,3 21,6 Commitments/Estimates 0,0 % 87,2 % 95,5 % 95,9 % 95,9 % Payments/Estimates 0,0 % 38,2 % 44,8 % 50,3 % 50,3 % 518,8 280,1 47,5 % 25,6 % 894,5 490,5 241,9 54,8 % 27,0 % 301,5 209,1 71,6 69,4 % 23,7 % 465,0 405,8 212,7 87,3 % 45,7 % C 347/70 EN Official Journal of the European Communities 16. 11. 98 (Mio ECU) Year of the commitment 1994 1995 1996 1997 1994-1997 1998 1999 Grand Total Resider II Estimates Commitments 1994-1997 Payments 1994-1997 120,9 4,3 1,3 131,5 172,8 77,0 139,1 134,4 79,6 179,6 105,1 62,1 571,0 416,6 220,0 19,3 20,5 Commitments/Estimates 3,5 % 70,2 % 79,6 % 73,0 % 73,0 % Payments/Estimates 1,1 % 31,0 % 40,3 % 38,5 % 38,5 % RETEX Estimates Commitments 1994-1997 Payments 1994-1997 122,7 0,3 0,1 134,5 164,8 75,4 139,9 154,4 67,8 148,2 85,8 56,8 545,4 405,3 200,1 30,9 32,9 Commitments/Estimates 0,2 % 64,2 % 80,5 % 74,3 % 74,3 % Payments/Estimates 0,1 % 29,4 % 36,1 % 36,7 % 36,7 % 610,9 416,6 220,0 68,2 % 36,0 % 609,2 405,3 200,1 66,5 % 32,8 % Emploi Estimates Commitments 1994-1997 Payments 1994-1997 220,7 201,2 100,6 256,9 107,7 53,6 262,5 263,1 170,3 294,8 246,6 866,8 571,2 277,6 1 017,7 407,6 433,1 1 858,5 Commitments/Estimates 91,2 % 64,7 % 77,3 % 85,2 % 85,2 % Payments/Estimates 45,6 % 32,3 % 43,9 % 56,1 % 56,1 % Konver Estimates Commitments 1994-1997 Payments 1994-1997 125,5 0,0 0,0 135,5 238,2 87,3 138,8 133,0 95,1 147,2 191,4 68,7 547,0 562,7 251,1 91,0 96,8 Commitments/Estimates 0,0 % 91,3 % 92,9 % 102,9 % 102,9 % Payments/Estimates 0,0 % 33,5 % 45,6 % 45,9 % 45,9 % REGIS II Estimates Commitments 1994-1997 Payments 1994-1997 85,9 0,0 0,0 92,7 58,8 22,0 99,1 158,0 135,6 105,3 90,6 55,8 383,0 307,4 213,4 112,4 119,6 Commitments/Estimates 0,0 % 32,9 % 78,1 % 80,3 % 80,3 % Payments/Estimates 0,0 % 12,3 % 56,7 % 55,7 % 55,7 % PEACE Estimates Commitments 1994-1997 Payments 1994-1997 Commitments/Estimates Payments/Estimates 0,0 0,0 0,0 66,0 27,4 13,7 118,0 119,0 95,6 41,7 53,3 81,2 303,1 176,3 136,5 41,5 % 66,8 % 58,1 % 58,1 % 20,7 % 30,1 % 45,0 % 45,0 % 866,8 571,2 46,6 % 30,7 % 734,9 562,7 251,1 76,6 % 34,2 % 615,0 307,4 213,4 50,0 % 34,7 % 303,1 176,3 136,5 58,1 % 45,0 % Total Estimates 1 926,8 2 227,0 2 377,5 2 547,2 9 078,6 2 613,6 2 778,8 14 471,1 Commitments 1994-1997 229,7 2 666,7 2 816,0 1 949,1 7 661,5 Payments 1994-1997 113,9 1048,9 1 513,2 1 489,3 4 165,3 Commitments/Estimates 11,9 % 69,7 % 87,5 % 84,4 % 84,4 % Payments/Estimates 5,9 % 28,0 % 41,0 % 45,9 % 45,9 % 7 661,5 4 165,3 52,9 % 28,8 % Source: Drawn up by the European Court of Auditors on the basis of SINCOM. 16. 11. 98 EN Official Journal of the European Communities C 347/71 Budgetary implementations of the structural measures during the financial years 1994-1997 (1) Table 5 Final budget after SAB and transfers Implemen- tation Implemen- tation rate of final budget (%) Amount (Mio ECU) Appropriations cancelled at year-end (a) (b) (c) (d) 1994 COMMITMENTS EAGGF-Guidance FIFG (fisheries) ERDF ESF Community initiatives Transitional measures, etc. Regulation (EEC) No 3575/90 Cohesion Fund 1995 COMMITMENTS EAGGF-Guidance FIFG (fisheries) ERDF ESF Community initiatives Transitional measures, etc. Regulation (EEC) No 3575/90 Cohesion Fund EEA mechanism 1996 COMMITMENTS EAGGF-Guidance FIFG (fisheries) ERDF ESF Community initiatives Transitional measures, etc. Regulation (EEC) No 3575/90 Cohesion Fund EEA mechanism 1997 COMMITMENTS EAGGF-Guidance FIFG (fisheries) ERDF ESF Community initiatives Transitional measures, etc. Regulation (EEC) No 3575/90 Cohesion Fund EEA mechanism 3 301,5 379,9 9 769,4 5 841,2 1 949,1 305,9 3 300,4 379,8 9 727,7 5 564,3 251,9 244,4 Sub-total ‘Structural Funds’ Total structural measures 21 547,0 1 853,1 23 400,1 19 468,5 1 853,1 21 321,6 3 374,1 451,3 10 684,4 6 710,7 2 915,8 271,8 24 408,1 2 152,0 89,8 26 649,9 3 772,0 450,4 11 883,7 7 150,1 2 988,5 342,0 26 587,4 2 444,0 108,0 29 139,4 4 026,1 490,7 12 989,7 7 639,1 3 173,4 305,7 28 624,7 2 749,0 108,0 31 481,7 3 348,3 451,2 10 566,1 5 125,3 2 666,7 111,9 22 269,5 2 152,0 89,8 24 511,3 3 772,0 337,2 11 862,5 7 150,1 2 819,4 199,4 26 141,2 2 443,9 87,1 28 672,2 4 026,1 369,0 12 983,1 7 639,1 1 949,1 263,9 27 230,3 2 748,9 102,5 30 081,7 Sub-total ‘Structural Funds’ Total structural measures Sub-total ‘Structural Funds’ Total structural measures Sub-total ‘Structural Funds’ Total structural measures 99,97 99,97 99,57 95,26 12,92 79,90 90,35 100,00 91,12 99,24 99,99 98,89 76,37 91,46 41,17 91,24 100,00 100,00 91,97 100,00 74,87 99,82 100,00 94,34 58,30 98,32 100,00 80,63 98,40 100,00 75,20 99,95 100,00 61,42 86,33 95,13 100,00 94,92 95,55 1,1 0,1 41,7 272,3 1 383,7 40,5 1 739,4 0,1 1 739,5 25,8 0,0 118,3 1 581,1 228,7 114,0 2 068,0 0,0 0,0 2 068,0 0,0 113,2 21,2 0,0 169,2 142,6 441,5 0,1 20,9 462,5 0,0 121,7 6,6 0,0 1 224,3 41,3 1 393,9 0,1 5,5 1 399,5 (1) In its Annual Reports the Court presents more detailed tables showing the budgetary implementation of structural measures. % (d)/(a) (e) 0,03 0,03 0,43 4,66 70,99 13,24 8,07 0,00 7,43 0,76 0,01 1,11 23,56 7,84 41,95 8,47 0,00 0,00 7,76 0,00 25,13 0,18 0,00 5,66 41,70 1,66 0,00 19,37 1,59 0,00 24,80 0,05 0,00 38,58 13,51 4,87 0,00 5,08 4,45 C 347/72 EN Official Journal of the European Communities Final budget after SAB and transfers Implemen- tation Implemen- tation rate of final budget (%) 16. 11. 98 (Mio ECU) Appropriations cancelled at year-end Amount 1994 PAYMENTS EAGGF-Guidance FIFG (fisheries) ERDF ESF Community initiatives Transitional measures, etc. Regulation (EEC) No 3575/90 Others Cohesion Fund 1995 PAYMENTS EAGGF-Guidance FIFG (fisheries) ERDF ESF Community initiatives Transitional measures, etc. Regulation (EEC) No 3575/90 Others Cohesion Fund EEA mechanism 1996 PAYMENTS EAGGF-Guidance FIFG (fisheries) ERDF ESF Community initiatives Transitional measures, etc. Regulation (EEC) No 3575/90 Others Cohesion Fund EEA mechanism 1997 PAYMENTS EAGGF-Guidance FIFG (fisheries) ERDF ESF Community initiatives Transitional measures, etc. Regulation (EEC) No 3575/90 Others Cohesion Fund EEA mechanism Sub-total ‘Structural Funds’ Total structural measures Sub-total ‘Structural Funds’ Total structural measures Sub-total ‘Structural Funds’ Total structural measures Sub-total ‘Structural Funds’ Total structural measures (a) (b) (c) (d) 2 778,9 537,0 8 087,4 5 454,1 2 059,4 487,0 416,0 174,1 19 993,9 1 743,4 21 737,3 2 935,2 518,1 9 627,2 5 851,6 2 291,5 386,7 165,1 106,5 21 881,9 1 750,0 89,8 23 721,7 3 859,4 545,1 10 663,1 6 035,9 2 115,2 314,7 148,7 49,2 23 731,3 1 919,3 108,0 25 758,6 3 580,0 486,9 11 522,6 6 143,4 1 858,6 267,3 87,3 49,9 23 996,0 2 326,0 102,5 26 424,5 2 498,9 395,0 6 410,8 4 144,8 849,2 319,7 176,8 55,7 14 850,9 916,0 15 767,0 2 530,6 248,1 8 373,6 4 734,1 1 337,8 193,8 36,3 48,5 17 502,8 1 699,3 89,8 19 292,0 3 360,3 421,6 10 610,3 6 035,9 1 691,4 188,5 119,5 40,0 22 467,5 1 872,2 87,1 24 426,8 3 580,0 486,9 11 521,4 6 143,4 1 677,3 171,4 41,2 10,9 23 632,5 2 323,0 102,5 26 058,0 89,92 73,56 79,27 75,99 41,24 65,65 42,50 32,00 74,28 52,54 72,53 86,21 47,87 86,98 80,90 58,38 50,14 21,99 45,55 79,99 97,11 100,00 81,33 87,07 77,34 99,50 100,00 79,96 59,90 80,36 81,39 94,67 97,55 80,63 94,83 100,00 100,00 99,99 100,00 90,25 64,12 47,19 21,91 98,49 99,87 100,00 98,61 223,1 142,0 1 676,6 1 099,7 1 025,9 157,3 126,1 51,9 4 502,6 827,4 5 330,0 404,6 270,1 1 253,6 1 113,1 953,7 192,8 128,8 58,0 4 374,7 50,7 0,0 4425,4 499,1 123,5 52,8 0,0 423,8 126,2 0,0 2,0 1 227,4 47,1 20,9 1 295,5 0,0 0,0 1,2 0,0 181,3 95,9 46,1 38,9 363,4 3,0 0,0 366,4 % (d)/(a) (e) 8,03 26,44 20,73 20,16 49,82 32,30 30,31 29,83 22,52 47,46 24,52 13,79 52,13 13,02 19,02 41,62 49,86 78,01 54,45 19,99 2,89 0,00 18,66 12,93 22,66 0,50 0,00 20,04 40,10 0,00 4,03 5,17 2,45 19,37 5,03 0,00 0,00 0,01 0,00 9,75 35,88 52,81 78,09 1,51 0,13 0,00 1,39 16. 11. 98 EN Official Journal of the European Communities C 347/73 Table 6 Financial perspective — Heading 2 (1 000 ECU) Structural Funds 1994 1995 1996 1997 21 323 000 19 245 723 2 077 277 339 147 1 738 130 1. Budgetary allocation for the year 2. Implementation 3. Unimplemented appropriations (1-2) 4. Appropriations carried forward to n+1 5. Cancelled appropriations (3-4) 6. Appropriations carried over from n-1 to n 7. Implementation of the appropriations carried forward 8. Unimplemented carried-over appropriations 9. Decom. , net of amounts made available again 24 069 000 21 937 911 2 131 089 70 629 2 060 460 339 147 331 601 7 546 5 445 26 579 000 26 078 201 500 799 4 648 496 151 70 629 63 038 7 591 41 606 28 620 000 27 226 145 1 393 855 1 393 855 4 648 4 648 0 38 970 10. Total not used (5+8+9) 1 738 130 2 073 451 545 348 1 432 825 Cohesion fund 1993 1994 1995 1996 1997 1. Budgetary allocation for the year 1 565 000 1 853 000 2 152 000 2 444 000 2 749 000 2. Implementation 1 564 645 1 852 963 2 151 972 2 443 933 2 748 925 355 136 219 3. Unimplemented appropriations (1-2) 4. Appropriations carried forward to n+1 5. Cancelled appropriations (3-4) 6. Appropriations carried over from n-1 to n 7. Implementation of the appropriations carried forward 8. Unimplemented carried-over appropriations 9. Decom. , net of amounts made available again 10. Total not used (5+8+9) 219 37 0 37 136 121 16 5 58 28 0 28 0 0 0 67 0 67 0 0 0 75 0 75 0 0 0 10 489 16 718 100 589 10 517 16 785 100 664 EEA financial mechanism 1. Budgetary allocation for the year 2. Implementation 3. Total not used 1995 108 000 90 000 18 000 1996 108 000 87 000 21 000 1997 108 000 102 500 5 500 Structural measures 1994 1995 1996 1997 1998 1999 Financial perspective Budgetary allocation Net utilisation Unused allocation 23 176 000 26 329 000 29 131 000 31 477 000 33 461 000 39 025 000 23 176 000 26 329 000 29 131 000 31 477 000 33 461 000 21 437 812 24 227 032 28 547 867 29 938 011 1 738 188 2 101 968 583 133 1 538 989 Source: Commission. Adjustments to the financial perspective. C 347/74 EN Official Journal of the European Communities 16. 11. 98 Impact of the adaptations of the financial perspective to the conditions of implementation Table 7 Appropriations for commitments (Mio ECU) Structural Funds 1995 1996 1997 1998 1999 1996 adaptation 1997 adaptation 1998 adaptation 1999 adaptation TOTAL 869 869 380 1 000 −500 869 1 249 500 693 1 045 1 433 3 171 Cohesion Fund 1995 1996 1997 1998 1999 1997 adaptation 1998 adaptation 1999 adaptation TOTAL 11 11 17 101 118 The Commission proposed an adaptation of 5 Mio ECU under the EEA financial mechanism. Appropriations for payments Structural measures 1995 1996 1997 1998 1999 1996 adaptation 1997 adaptation 1998 adaptation 1999 adaptation TOTAL 935 696 186 434 633 −300 173 632 300 300 935 882 767 1 405 Table 8 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all the aid measures under Objective 2 (period 1994 to 1996) Initial financial plans Current financial plans Difference between the financial plans Ratio plans in effect/initial plans Total SF ERDF ESF Total SF ERDF ESF Total SF ERDF ESF Total SF ERDF ESF (ECU) Belgium Denmark Germany Spain France Italy Luxembourg 1994 1995 1996 Total 1994 1995 1996 Total 1994 1995 1996 Total 1994 1995 1996 Total 1994 1995 1996 Total 1994 1995 1996 Total 1994 1995 1996 Total 51 000 250 53 000 250 55 999 500 160 000 000 41 440 500 43 068 500 45 511 500 130 020 500 9 559 750 9 931 750 10 488 000 29 979 500 4 526 261 10 785 161 118 218 058 133 529 480 1 214 500 5 199 971 104 208 719 110 623 190 3 311 761 5 585 190 14 009 339 22 906 290 −46 473 989 −42 215 089 62 218 558 −26 470 520 −40 226 000 −37 868 529 58 697 219 −19 397 310 17 796 000 18 565 000 19 639 000 56 000 000 14 051 000 14 657 000 15 502 000 44 210 000 3 745 000 3 908 000 4 137 000 11 790 000 1 553 000 21 990 000 30 560 000 54 103 000 1 500 000 19 731 000 22 511 000 43 742 000 53 000 2 259 000 8 049 000 10 361 000 −16 243 000 3 425 000 10 921 000 −1 897 000 −12 551 000 5 074 000 7 009 000 −468 000 −6 247 989 −4 346 560 3 521 339 −7 073 210 −3 692 000 −1 649 000 3 912 000 −1 429 000 233 210 000 243 011 000 256 781 000 733 002 000 164 000 000 170 341 000 179 341 000 513 682 000 69 210 000 72 670 000 77 440 000 219 320 000 25 271 004 105 609 000 572 498 000 703 378 004 13 230 004 57 753 000 409 976 000 480 959 004 12 041 000 −207 938 996 −150 769 996 47 856 000 −137 402 000 −112 588 000 230 635 000 315 717 000 −32 722 996 −29 623 996 162 522 000 222 419 000 −57 169 000 −24 814 000 85 082 000 3 099 000 360 000 312 373 999 614 395 999 288 1 129 999 214 277 100 000 288 000 000 305 000 000 870 100 000 82 900 312 85 999 614 90 999 288 259 899 214 205 203 512 262 646 028 522 127 158 989 976 699 167 146 973 201 164 999 413 071 672 781 383 644 38 056 539 −154 796 800 −109 953 027 −86 835 001 61 481 029 −111 353 586 108 071 672 109 055 486 126 127 870 −88 716 356 208 593 055 −140 022 515 −44 843 773 −24 518 585 18 056 198 −51 306 159 561 425 401 584 402 499 617 372 097 464 840 201 479 362 500 508 357 299 1 763 199 997 1 452 560 000 108 265 494 164 124 497 96 585 200 105 039 999 219 764 876 289 904 263 109 014 798 1 127 558 014 1 011 424 700 310 639 997 1 581 586 774 1 339 455 070 55 859 003 −397 300 904 −356 574 707 70 139 387 −294 498 236 −259 597 624 116 133 314 503 067 401 510 185 917 242 131 704 −181 613 223 −113 104 930 −40 726 197 −34 900 612 7 118 516 −68 508 293 210 737 000 219 634 000 253 629 000 684 000 000 166 687 000 173 712 000 201 921 000 542 320 000 44 050 000 45 922 000 51 708 000 141 680 000 11 145 391 19 126 607 493 740 620 524 012 618 10 312 790 12 509 621 377 261 230 400 083 641 832 601 −199 591 609 −156 374 210 6 616 986 −200 507 393 −161 202 379 116 479 390 175 340 230 240 111 620 123 928 977 −159 987 382 −142 236 359 −43 217 399 −39 305 014 64 771 390 −17 751 023 2 000 000 2 000 000 3 000 000 7 000 000 1 723 000 1 723 000 2 583 000 6 029 000 277 000 277 000 417 000 971 000 899 532 517 669 3 920 241 5 337 442 714 997 378 496 3 467 149 4 560 642 184 535 139 173 453 092 776 800 −1 100 468 −1 482 331 920 241 −1 662 558 −1 008 003 −1 344 504 884 149 −1 468 358 −92 465 −137 827 36 092 −194 200 8,87 % 20,35 % 34,64 % 2,93 % 56,24 % 12,07 % 211,11 % 228,97 % 133,57 % 76,41 % 85,08 % 83,46 % 8,73 % 1,42 % 10,68 % 118,45 % 134,62 % 57,80 % 155,61 % 145,21 % 194,56 % 87,88 % 98,94 % 96,61 % 10,84 % 43,46 % 17,40 % 8,07 % 65,85 % 33,90 % 222,95 % 228,60 % 209,87 % 93,63 % 101,41 % 95,96 % 57,00 % 70,23 % 45,91 % 60,32 % 71,49 % 69,85 % 131,85 % 135,43 % 119,84 % 80,26 % 89,80 % 87,61 % 29,23 % 49,61 % 57,83 % 23,29 % 66,77 % 45,85 % 182,64 % 198,96 % 106,53 % 77,95 % 92,21 % 89,70 % 6,19 % 7,20 % 5,29 % 8,71 % 1,89 % 14,41 % 194,67 % 186,84 % 225,26 % 87,47 % 73,77 % 76,61 % 44,98 % 25,88 % 66,62 % 41,50 % 50,24 % 21,97 % 130,67 % 134,23 % 108,66 % 80,00 % 75,65 % 76,25 %. 1 6 1 1 9 8. E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n C o m m u n i t i e s C 3 4 7 / 7 5 Initial financial plans Current financial plans Difference between the financial plans Ratio plans in effect/initial plans Total SF ERDF ESF Total SF ERDF ESF Total SF ERDF ESF Total SF ERDF ESF (ECU) Netherlands United Kingdom 1994 1995 1996 Total 1994 1995 1996 Total 95 960 000 99 090 000 104 950 000 300 000 000 66 940 000 67 880 000 71 160 000 205 980 000 29 020 000 31 210 000 33 790 000 94 020 000 11 554 342 26 279 204 186 289 913 224 123 459 672 745 10 398 319 132 900 530 143 971 594 10 881 597 15 880 885 53 389 383 80 151 865 −84 405 658 −72 810 796 81 339 913 −75 876 541 −66 267 255 −57 481 681 61 740 530 −62 008 406 681 998 000 710 001 000 750 001 000 511 607 000 532 642 000 562 631 000 2 142 000 000 1 606 880 000 28 794 000 144 811 000 170 391 000 177 359 000 130 003 000 237 928 000 187 370 000 1 634 690 000 1 362 960 000 535 120 000 2 017 429 000 1 521 757 000 116 017 000 −537 187 000 −482 813 000 107 925 000 −472 073 000 −402 639 000 800 329 000 271 730 000 884 689 000 −85 123 000 495 672 000 −124 571 000 −18 138 403 −15 329 115 19 599 383 −13 868 135 −54 374 000 −69 434 000 84 360 000 −39 448 000 Source: Financial plans of the Objective 2 SPDs and programmes. 12,04 % 26,52 % 37,50 % 1,00 % 50,88 % 15,32 % 177,50 % 186,76 % 158,00 % 85,25 % 69,90 % 74,71 % 21,23 % 33,51 % 68,09 % 5,63 % 60,85 % 24,41 % 217,96 % 242,25 % 145,02 % 92,63 % 94,70 % 94,18 % C 3 4 7 7 6 / E N O f f i c i a l J o u r n a l o f t h e E u r o p e a n C o m m u n i t i e s 1 6. 1 1. 9 8 16. 11. 98 EN Official Journal of the European Communities C 347/77 Analysis of the underlying reasons for a low rate of utilisation of Community appropriations (replies to the questionnaire) Table 9 (a) Number of replies (b) Very important (c) Important (b) + (c) / (a) (d) Not very important (e) Negligible A. PROGRAMMING 1. Difficulties in drawing up the SPD/CSF/OP 2. Delays in adoption of the SPD/CSF/OP 3. Existence of suspensive clauses and delays in rescinding them 4. Inclusion of measures not originally planned 5. Priority given to completion of aid measures from preceding periods 6. Initial financing plan proved to be over-optimistic 7. Little flexibility in text of the SPD/CSF/OP 8. Need to make big changes to the SPD/CSF/OP/measure, etc. 9. Difficulties and delays in making these amendments/reprogramming 10. Cumbersome nature of administrative procedures: — Community procedures — national procedures B. FINANCIAL CHANNELS 1. Delays in the arrival of Community funds: — in the Member State — in the region — other level 2. Concentration of the financial operations at the year-end: — for the Community payments — for the payments within the Member State 3. The existing procedures do not enable advances to be paid to final beneficiaries or these payments can be made only on certain conditions likely to lengthen the procedures C. PROCESSING OF THE FINANCIAL DATA 50 48 41 45 46 47 47 50 48 49 44 42 36 27 35 36 48 4 11 2 4 4 9 2 8 9 6 13 2 5 1 3 3 7 34,00 % 17 13 22 3 9 2 22 12 18 68,75 % 12,20 % 28,89 % 13,04 % 65,96 % 29,79 % 52,00 % 19 58,33 % 27 15 67,35 % 63,64 % 8 8 4 7 7 23,81 % 36,11 % 18,52 % 28,57 % 27,78 % 14 43,75 % 16 8 28 28 32 6 19 11 10 8 8 18 11 10 15 16 17 7 8 4 8 10 14 13 10 8 8 14 12 12 10 10 10 1. Difficulties in gathering financial data from beneficiaries (state nature of the difficulty: e. g. lack of separate accounts, etc. ) 50 10 16 52,00 % 13 11 C 347/78 EN Official Journal of the European Communities 16. 11. 98 2. Inadequate knowledge by administrators of Community thresholds triggering payments of advances and balances 3. Length of the channels for sending financial data 4. Length of the procedure for sending payment claims to the Commission 5. Slowness of the Commission’s analysis of the financial data D. BUDGET 1. Difficulties in mobilising counterpart funds: — national — regional/local — private 2. Budgetary restrictions not foreseen at the following levels: — national — regional/local — other 3. Variations in the national currency/ecu exchange rate: — devaluation — revaluation 4. Slowness of the budgetary implementation procedures connected with the existence of Community co-financing 5. Contradictions between Community and national procedures/rules (e. g. concept of commitment) E. IMPLEMENTATION OF THE AID MEASURE 1. Difficulties in starting up the procedures for selecting measures/projects before the adoption of the Commission Decision granting aid 2. Inadequate awareness by aid beneficiaries of Community rules and procedures 3. Changes in the administrative environment (e. g. departmental reorganisation, change in procedures, etc. ) 4. Exceptional circumstances (e. g. political changes, privatisations, natural catastrophes, etc. ) 5. Application of Article 24 of Regulation (EEC) No 4253/88 (reduction, suspension and cancellation of aid) 6. Difficulties in coordinating several Community and national the case of multi-fund (especially in administrators programmes) (a) Number of replies (b) Very important (c) Important (b) + (c) / (a) (d) Not very important (e) Negligible 45 47 43 44 37 38 33 39 35 19 36 29 48 50 50 52 51 43 38 48 2 3 4 2 7 4 3 5 1 0 1 0 2 13 5 15,56 % 15 9 11 38,30 % 30,23 % 29,55 % 5 7 32,43 % 28,95 % 10 39,39 % 6 6 1 8 4 10 11 28,21 % 20,00 % 5,26 % 25,00 % 13,79 % 25,00 % 48,00 % 19 23 19 21 12 14 10 15 14 6 5 6 19 13 19 6 11 10 13 13 10 13 14 12 22 19 17 13 8 17 50,00 % 12 13 12 13 6 1 14 11 6 1 50,00 % 47,06 % 27,91 % 5,26 % 15 12 56,25 % 19 14 3 12 10 7 13 28 24 11 16. 11. 98 EN Official Journal of the European Communities C 347/79 (a) Number of replies (b) Very important (c) Important (b) + (c) / (a) (d) Not very important (e) Negligible 7. Difficulties beneficiaries in coordinating a high number of aid 49 10 14 48,98 % 14 11 8. Shortcomings of the Monitoring Committee: — set up belatedly and/or inadequate number of meetings — unsuitable organisation in relation to needs (e. g. little the time to allow study documentation or involvement of a high number of participants, etc. ) to — length of procedures for adopting decisions 9. Time taken for the annual/final report for — the drawing-up — the forwarding — the approval by the Commission 10. Difficulties encountered a measure/operation/project or aid beneficiary which have the effect of delaying the whole aid measure level the of at F. IMPLEMENTATION OF THE OPERATIONS 1. Late start-up of projects/operations connected with: — tendering procedures for public contracts — procedures to evaluate the environmental impact — results of feasibility studies — other reasons (e. g. expropriation, etc. ) 2. Difficulties during the implementation (e. g. unforeseen technical difficulties, bankruptcy, cost increase, etc. ) 3. Slowness of the procedures to amend the measures/operations/projects, due to: — delays in their implementation — changes in priorities 38 39 39 38 36 37 39 41 40 41 28 47 40 35 1 4 7 0 1 2 6 8 4 4 6 1 4 7 4 8 7 6 0 6 7 13,16 % 30,77 % 35,90 % 15,79 % 2,78 % 21,62 % 33,33 % 13 12 9 9 51,22 % 40,00 % 31,71 % 53,57 % 15 34,04 % 11 6 37,50 % 37,14 % 10 9 13 15 18 15 8 8 10 14 4 16 14 12 23 18 12 17 17 14 18 12 14 14 9 15 11 10 C 347/80 EN Official Journal of the European Communities 16. 11. 98 Table 10 List of Annexes ANNEX I: Financial perspective 1993-99 and allocation of Structural Fund resources Table I. 1 Table I. 2 Table I. 3 Table I. 4 Table I. 5 Table I. 6 Table I. 7 Table I. 8 Table I. 9 Annual distribution of the Structural Fund and FIFG resources available for commitment for the period 1994-1999 (at 1992 prices and in Mio ECU) Distribution of the resources by Objective (at 1992 prices and in Mio ECU) Distribution of resources by Objective and appropriations devoted to financing the Community Initiatives (at 1994 prices and in Mio ECU) Breakdown of the resources under the CSFs by Objective and by Member State (at 1994 prices and in Mio ECU) Allocation of the Structural Funds to the new Member States (in Mio ECU) Distribution of the resources devoted to financing the Community Initiatives (EUR 12) Details of the distribution of the resources devoted to financing the Community initiatives (EUR 12) Result by Member State and by Initiative of the distribution of the resources devoted to financing the Community Initiatives (EUR 12) Breakdown of the appropriations devoted to financing the Community Initiatives for the new Member States (in Mio ECU and at 1995 prices) ANNEX II: Implementation of the Structural measures 1994-97 by Objective, Fund and Member State Table II. 1 Implementation of the Structural measures 1994-97 Table II. 2 Implementation by Fund and by Member State Table II. 3 Implementation by Fund and by Objective Table II. 4 Implementation by Objective and by Fund Table II. 5 Implementation by Member State and by Objective Table II. 6 Implementation by Objective, Member State and Fund ANNEX III: Details of the budgetary implementation 1994-97 by Fund, Objective, Member State and year Table III. 1 Table III. 2 Table III. 3 Table III. 4 Table III. 5 Table III. 6 Table III. 7 Table III. 8 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 1 ERDF Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 1 ESF Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 1 EAGGF Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 1 FIFG Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Total Objective 1 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 2 ERDF Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 2 ESF Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Total Objective 2 16. 11. 98 EN Official Journal of the European Communities C 347/81 Table III. 9 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 3 ESF Table III. 10 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 4 ESF Table III. 11 Table III. 12 Table III. 13 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 5a (in areas 5b) EAGGF Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 5a (outside areas 1 and 5b) Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Total Objective 5a EAGGF Table III. 14 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 5a FIFG Table III. 15 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 5b ERDF Table III. 16 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 5b ESF Table III. 17 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 5b EAGGF Table III. 18 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Total Objective 5b Table III. 19 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 6 ERDF Table III. 20 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 6 ESF Table III. 21 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 6 EAGGF Table III. 22 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Objective 6 FIFG Table III. 23 Budgetary implementation by country and by year. Payments by year of implementation and by year of commitment — Total Objective 6 Table III. 24 Budgetary implementation by Community Initiative and by year ANNEX IV: Comparison between the estimates and the budgetary implementation by Objective, country and year Table IV. 1 Comparison between the estimates and the budgetary implementation by country and year — Objective 1 Table IV. 2 Comparison between the estimates and the budgetary implementation by country and year — Objective 2 Table IV. 3 Comparison between the estimates and the budgetary implementation by country and year — Objectives 3 and 4 Table IV. 4 Comparison between the estimates and the budgetary implementation by country and year — Objective 5a (agriculture sector) Table IV. 5 Comparison between the estimates and the budgetary implementation by country and year — Objective 5a (fisheries sector) Table IV. 6 Comparison between the estimates and the budgetary implementation by country and year — Objective 5b Table IV. 7 Comparison between the estimates and the budgetary implementation by country and year — Objective 6 C 347/82 EN Official Journal of the European Communities 16. 11. 98 ANNEX V: Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 for the period 1994-96 Table V. 1 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — Belgium Table V. 2 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — Denmark Table V. 3 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — Germany Table V. 4 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — Spain Table V. 5 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — France Table V. 6 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — Italy Table V. 7 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — Luxembourg Table V. 8 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — Netherlands Table V. 9 Comparison between the initial financial plans and those in effect at 31. 12. 1997 for all aid measures under Objective 2 — United Kingdom ANNEX VI: Implementation of the commitment and payment appropriations for structural measures by budget heading — Financial years 1994-1997 Table VI. 1 Implementation of the commitment appropriations for structural measures by budget heading — Financial year 1994 Table VI. 2 Implementation of the payment appropriations for structural measures by budget heading — Financial year 1994 Table VI. 3 Implementation of the commitment appropriations for structural measures by budget heading — Financial year 1995 Table VI. 4 Implementation of the payment appropriations for structural measures by budget heading — Financial year 1995 Table VI. 5 Implementation of the commitment appropriations for structural measures by budget heading — Financial year 1996 Table VI. 6 Implementation of the payment appropriations for structural measures by budget heading — Financial year 1996 Table VI. 7 Implementation of the commitment appropriations for structural measures by budget heading — Financial year 1997 Table VI. 8 Implementation of the payment appropriations for structural measures by budget heading — Financial year 1997 16. 11. 98 EN Official Journal of the European Communities C 347/83 COMMISSION’S REPLIES 2. SUMMARY OF MAIN OBSERVATIONS The Commission considers that this summary of the Court’s observations may give an unduly negative impression of the operations of the Structural Funds. The Court concentrates on the inevitable imperfections and for every weaknesses of Fund management. But programme with problems there are many which are progressing normally and bringing clear and widely appreciated benefits. The successful use of the Structural Funds requires the drawing-up of sensible rules and then a major effort, on a massive scale, of planning, programme formulation, programme management and monitoring, budgetary and financial management and evaluation. Financial targets have to be met and, at the same time, a quality product has to be ensured. Large numbers of people are involved in this work at the various levels; there are hundreds of programmes and hundreds of thousands of projects. for its part, makes The Commission, the best contribution it can to managing the current programmes and to ensuring the presence and proper operation in the Member States of efficient management and control systems. The Commission has also proposed, in the light of experience, for the new programming period starting in 2000, major changes in the rules in such key areas as programming, partnership, financial management and control and evaluation. Many of these changes aim at simplification, decentralisation and the clarification of responsibilities and are designed further to increase the usefulness of Structural Funds operations. 2. 2. The low absorption rate of appropriations in 1994 and 1995 was due to the slow start-up of the new programming period. The budgetary execution of Community Initiatives was particularly affected, no doubt mainly because of the large number of Initiatives and of improved. The CI programmes, but insufficiency of 1997 payment appropriations is explained by the fact that the budgetary authority had cut the volume of payment appropriations in comparison with the Commission proposals and did not authorise a transfer. it has since 2. 3. The situation described by the Court illustrates the difficulty of reconciling the budget annuality principle and the multiannual planning used for the Structural Funds. and commitments depend on implementation on the ground Furthermore, Community payments and the absorption of Community appropriations by the Member States, all of which are difficult to forecast accurately within the time limits for the budgetary procedures of the Union. 2. 4. The Commission has proposed for the forthcoming programming period a system under which the annual commitments in respect of a programme would be made automatically. 2. 5. Information on the implementation of operations is included in the Member State declarations of expenditure and the annual progress report on each programme, and is obtained in certain cases from the annual closure of operations. The Commission presents this information in its annual reports on Structural Funds implementation. For the next programming period the Commission has proposed a greatly simplified indexation system and is developing a new common information system. The information presented by the Commission in the revenue and expenditure account and in the financial statement as ‘off-balance sheet obligations’ may raise marginal questions of further comment, please see point 4. 2. interpretation. For 2. 6. Precise budgetary forecasting is hardly possible, given the multiannual nature of the operations and the great variety of situations of implementation on the ground. However, the Commission and the Member States are cooperating in the context of the SEM 2000 initiative to improve forecasting so far as this can realistically be done. 2. 8. The Commission wishes to underline that the causes of delay described in this paragraph emerge from an analysis of the programmes which were progressing particularly slowly. Such problems should not therefore be assumed to be widespread. However, a number of the problems mentioned should be solved or eased by recent Commission action (e. g. in adopting precise eligibility rules) or by the Commission’s proposals for regulatory change for the next programming period. Others require greater operational efficiency at various levels. Yet others (for example, the overlapping of programming periods, the difference between Community and certain national procedures, variations in exchange rates) have to be lived with and coped with by the officials concerned. 2. 9. The Commission will continue to seek to ensure, in partnership with the Member States, the best possible management of Structural Funds programmes. C 347/84 EN Official Journal of the European Communities 16. 11. 98 3. FINANCIAL PROGRAMMING AND BUDGETARY STRUCTURAL OF THE IMPLEMENTATION OPERATIONS 3. 1. The distribution of Structural Fund appropriations among Objectives, Community Initiatives and Member States was a major technical and political operation which the Commission considers that it carried out efficiently, in conformity with the regulations and, given the magnitude of the task, within a reasonable time. 3. 5. -3. 7. The Commission agrees that progress with the Community Initiative programmes has generally been too slow, but it should be understood that these programmes frequently required the setting-up of new management structures, for example a new type of local partnership for the URBAN and Interreg II programmes. Delays also resulted from the large number of programmes proposed, often late, by the Member States (for certain countries a separate programme for each project and for each region), many of which did not meet the minimum quality standard required. Adoption of most of the CIs in 1995 and 1996 implementation of commitment appropriations for those two years. to better led The Commission has proposed for the next programming period that there should only be three CIs, and will press for there to be far fewer individual programmes than now. in to the respect shortfall commitment With appropriations in 1997, the volume of commitment appropriations which the budgetary authority finally entered in the Community budget was smaller than what the Commission proposed. The budgetary authority also did not authorise a transfer of payment appropriations towards the end of 1997. 3. 8. The amount of ECU 3 171 million represents only about 2 % of the total budget allocation for 1994-1999. The ECU 1 405 million for payments relates to the overall (theoretical) financial perspective, and does not correlate directly with the structural operations and the budget of 1999. 3. 12. The rules of financial management are based on the principle of proportionality between expenditure incurred on the ground in respect of an operation and the volume of Community commitments and payments in respect of the operation in question. It is clear, however, that Commission commitments and advance payments for the co-financing of operations at variable rates cannot reflect precisely the actual implementation of these operations; they only give an indication of actual progress on the ground. The Commission’s regulatory proposals for the new programming period include the concept that, after an initial payment on account, subsequent Commission payments should no longer be advances but should be reimbursements of payments actually made in the Member States. On that basis, the Commission payments would reflect more directly real progress on the ground. The Commission has also proposed that programmes involving a Community contribution of ECU 40 million or less should no longer be the subject of a single commitment but should, larger the programmes, be committed in annual instalments. like information on the their progress on The annual reports enable Member States to send the implementation of Commission projects and the ground. The Commission, in order to do its job, does not require detailed information about the state of execution of individual projects. 4. EXISTING INFORMATION ON THE IMPLEMENTATION OF STRUCTURAL OPERATIONS 4. 1. The Commission takes the view that although the various management information systems set up could be improved, they provide operators with the information they need. The Commission encourages the Member States to improve the monitoring systems by providing technical assistance. For the next period, the Commission proposes that the Member States tighten their monitoring, information and control systems in return for the decentralisation of the management of projects. 3. 11. Implementation of Objective 2 took place in two phases (1994-1996 and 1997-1999) in accordance with the rules. This made it necessary to concentrate funds somewhat artificially into the last tranche of the first period, whereas if the outlay had been programmed over the entire 1994-1999 period, the funds would not have had to be concentrated and could have been spread over the second part of the period. In addition, the transfer to 1997-1999 represents no more than 12 % of the total Objective 2 allocation for 1994-1996. 4. 2. The subject of ‘off-balance sheet obligations’ for structural actions raises questions of definition. In the Commission’s view the basic obligations are derived from the Edinburgh allocations, the Structural Funds and Cohesion Fund regulations and the Interinstitutional Agreement. Accordingly, the off-balance sheet obligations may be defined as the overall Structural Funds allocations (including full indexation), less the implementation. This amount represents the ceiling of the relevant obligations, 16. 11. 98 EN Official Journal of the European Communities C 347/85 as well as the likely outcome, subject to any future (still unknown) decommitments. The Court wants a distinction to be made regarding ‘legal commitments’. This would imply a reduction of the above amount by (i) indexation to the extent that Member States have not yet formally made use of their option to allocate the indexation to specific programmes and (ii) amounts still to be allocated at programme level (e. g. reserves). These amounts are fairly marginal at the end of the programming period, but still constitute an obligation for the structural actions. In addition, there are continuous reallocations at programme level, making a ‘bottom-up’ calculation of off-balance obligations at a given date impracticable. commitment of successive tranches. The rescheduling of the financial plans for programmes is designed to adapt programming of operations to actual implementation. The adaptation of financial plans makes it possible to the Community full amount of ensure contribution is committed. that the for for regulations the next The new proposals programming period represent a simplification of the system since the commitments will be made automatically each year, and payments will be based solely on the actual expenditure incurred. The system of automatic the phenomenon of commitment should eliminate rescheduling at the end of a period. A further problem in calculating and verifying the off-balance obligations at a given date is that only commitments and payments are registered as accounting data; the programme allocations are not registered in the same way. This may raise questions of interpretation. 4. 7. The Commission is trying to set up a more efficient system to replace ARINCO. However, during the current programming period, each lead department had access to the information needed to monitor the Funds’ objectives for which it was responsible. The overall results are presented in the annual reports of the Structural Funds. 4. 3. The Commission has explained and justified its administrative and accounting practices in this area in its replies to paragraph 21. 4 of the Court’s 1996 Annual Report and paragraphs 3. 34-3. 35 of the 1995 DAS report. The ‘standard clauses’ explicitly allow two possible methods of closing annual instalments. The principle of annuality of the Community budget inevitably introduces an element of ‘artificiality’ into the budgetary treatment of the Structural Funds’ multiannual programmes. 4. 4. The Commission is preparing a proposal for a major revision of the Financial Regulation. This will take full account of the Court’s Opinion No 4/97. the specific 4. 5-4. 6. The allocation of clearly defined amounts to structural operations (Structural Funds and the Cohesion Fund) was established framework in regulations of the instruments concerned and in the Interinstitutional budgetary procedures ensure that the amounts in question are in fact made available. Budgetary management in terms of commitment appropriations makes it possible to ensure that the provision is observed and to check it. Agreement. Special The allocation is made when the decisions awarding Community aid for programmes and projects are adopted. In this context, the commitments, as is the case for any operation financed by the Community budget, constitute an upper limit for authorised payments for a given project. The innovation in the specific financial rules of the Structural Funds and the Cohesion Fund is the that limit changes over following time the 5. BUDGETARY OPERATIONS PROCEDURES FOR STRUCTURAL 5. 1. -5. 2. The use of budget transfers is an integral and normal part of the budgetary management of the Structural Funds. The Commission does not consider that these transfers are excessive in percentage terms. The most substantial movements were submitted to the budgetary authority for approval together with the relevant supporting documents. In 1994 and 1995 there were two main grounds for transfers: 1. distribution by Fund and consequently by budget chapter was not known beforehand; 2. the rate of adoption of the operations varied from one objective to another. When the preliminary draft budget is being prepared, account has to be taken of all kinds of elements which are often hard to predict, for example completion of the adoption procedures in respect of operations or their rate of implementation. The example cited by the Court concerning the CSF/SPD of Objective 2 precisely reflects the fact that under-utilisation in the case of these projects in 1996 could not be taken into account in the 1997 budget estimates. C 347/86 EN Official Journal of the European Communities 16. 11. 98 In the case of commitment appropriations the total budget is predetermined. In its forecasts the Commission must look for the best distribution of the total amount between the budget headings. improve budget Within the SEM 2000 framework, the Commission has established a Budgetary Network with the Ministries of Finance in the Member States, with one purpose which is to the complexity and flexibility (in the form of options available to Member States) of the present delivery system imply a degree of uncertainty in budgetary forecasting that has to be dealt with by transfers, etc. forecasting. Nevertheless, 5. 3. Updated financial plans are used to prepare the preliminary draft budget for the Structural Funds. For the 1995 budget (prepared in the spring of 1994), account was taken of changes already made and in some cases of those under way. 5. 4. The Commission bases the budget forecasting of ‘top-down’ payments on different methods, which are not ‘applying percentages’: ‘bottom-up’ and confined to — an item-by-item assessment of the needs for payment appropriations for settling outstanding commitments (RAL) and new commitments of the current year; — a forecast by Member States within the Budgetary Network mentioned at points 5. 1. and 5. 2; — an extrapolation analysis of the growth of commitments and related payments over time; — a lump sum adjustment for likely over-budgeting in a bottom-up approach; — a lump sum adjustment reflecting the need for overall budgetary rigour. 5. 5. The Commission emphasises again the legitimacy of the transfer mechanism as a means of adjusting budget allocations to changing requirements. 5. 7. The managers of the programmes are aware of the nature of the financial plans and consider them a useful and necessary planning and management tool. in practice. Nevertheless, although The Commission considers that the system has worked adequately the indexation method was simplified the period 1994-1999 compared with the previous period, it is still too complex in its application. For the forthcoming programming period the Commission has therefore proposed that the new CSFs, SPDs and CIs be adopted at current prices. for 6. DELAYS IN THE UTILISATION OF COMMUNITY APPROPRIATIONS AT THE LEVEL OF THE INDIVIDUAL FORMS OF INTERVENTION General observations 6. 1. The Commission draws special attention to the Court’s observation as to the non-representativity of the results of its questionnaire, sent as it was to the managers of the 31 slowest-moving programmes (some 3 % of all programmes). This circumstance needs to be kept fully in mind in reading the Court’s report. 6. 2. -6. 5. The considerable volume of financial resources involved and the large number of draft programming documents — some, in the Commission’s view, of insufficient quality — meant that extra time was needed to meet the quality criteria set out in the regulations, especially those requiring precise quantification of objectives, prior appraisal of the expected environmental the principle of and impact additionality. compliance with 6. 6. -6. 8. It is clear that the national procedures applied for the implementation of Structural Funds operations may affect the rate of absorption of the funds available. These procedures must nevertheless take proper account of Community requirements. 6. 9. The regulations set the initial eligibility limit in respect of expenditure incurred by final beneficiaries. This is the date of receipt by the Commission of the the corresponding application Member State. The commitment appropriations is specified in the Commission decision approving the form of intervention and refers to legal and financial commitments. for assistance final date from for 5. 8. -5. 9. The Commission informs the Member States of the available financial resources resulting from the application of indexation. The Member State is free to make proposals for allocating the additional resources to ongoing operations or to new operations. The concept of the ‘validity of the commitment by the Member States’ was defined in an eligibility data-sheet drawn up by the Commission together with the Member States. The payments system for the new programming period proposed by the Commission will mean that the final date for national commitments will no longer have any operational consequences. 16. 11. 98 EN Official Journal of the European Communities C 347/87 6. 10. It is true that there is no initial final date for the commitment of expenditure. The Commission, however, has specified the conditions of eligible expenditure in respect of commitments entered into before the date of the beginning of the operation (namely before the Commission received the corresponding application for assistance) in paragraph 1. 4 of data-sheet 2 on eligible expenditure. 6. 11. The Commission cannot confine co-financing under the Structural Funds either to operations under way or to new operations; on the contrary it must provide support both for on-going operations and for the development of new operations corresponding to Community priorities. 6. 12. The Commission agrees that the coordination required is difficult, but considers that it has improved. in the case of multi-fund programmes 6. 13. The monitoring committees, organised and chaired by the Member States, are in reality too diverse to justify broad generalisations about their effectiveness, which has, in the Commission’s view, in many cases improved. They play an essential part in the management of Structural Fund operations. In the context of the reform of the Funds for the next proposes programming decentralising decisions concerning the implementation of operations. This should help to simplify procedures within Member States. the Commission period, 6. 18. The Commission’s departments responsible for the State aid sector have taken a number of steps to avoid unnecessary delays in approval procedures. Moreover, the recent approval of Council Regulation (EC) No 994/98 on the application of Articles 92 and 93 of the Treaty creates the possibility for the Commission to exempt certain important categories of aid from the notification requirements of Article 93(3). This should further simplify and facilitate the implementation of business aid measures under the next generation of Structural Fund programmes. in the 6. 19. The annual distribution provided for financial plans can only provide a guide for the remaining years. This is a consequence of the multiannual nature of programming and the current financial management system. In addition, the financial perspective is drawn up by the budgetary authority for use when annual budgets are being established; they must therefore somehow be reflected in the programming of the Structural Funds. 6. 21. It appears rational, where expenditure could be attributed to either of two successive programming periods, to attribute it to the former period if the appropriations are available. 6. 22. The decentralisation of decisions concerning the implementation of operations, as proposed by the Commission for the next programming period on the basis of experience, should certainly have the effect of simplifying the procedures for changing programmes. Programming Financial channels 6. 14. -6. 16. The Italian authorities had considerable difficulty in adapting to the programme approach of the Structural Funds and considerable delays affected implementation of programme approvals and the this reason programmes on Commission and Italian central and regional authorities concluded an agreement in July 1995 to improve the management of the Structural Funds in Italy. the ground. For the the 6. 23. The Commission endeavours to make its own payments as quickly as possible. The regulations provide for a system of advances in order to prefinance the payments the Member States must make under the Structural Funds. The complexity of financial channels referred to by the Court is unavoidable given that several national, regional and local authorities have to act in turn. The negotiations on some programmes were protracted. This was due primarily to weaknesses in the proposals. Two DG XVI-led programmes presented in 1994 were indeed only adopted in 1997 — Interreg II Italy-Austria and Italy-Slovenia. Negotiations on these programmes were difficult but the Commission agrees that they should have been concluded more rapidly. 6. 17. Member State proposals for co-financing of global grants frequently raise difficult issues which inevitably take time to settle. 6. 24. -6. 26. Structural Funds co-financing is based on advances to the Member States aiming at facilitating the smooth implementation of the operations. It is clear, however, that the national administrative arrangements for implementation have an important impact on the progress of the programmes and the absorption of the available funds. The Commission cannot replace the Member States in this respect. However, Regulation (EC) includes specific provisions which are No 2064/97 expected the situation: Article 2(2)(b) improve to provides for verification by the Member State of the C 347/88 EN Official Journal of the European Communities 16. 11. 98 allocation and the transfers of the available Community and national funds; Article 4(f) provides for verification that the payment of the Community contributions to final beneficiaries is made without any reductions or unjustified delays. Commission considerably affect the rate of Community payments. These payments can only give an indication of real progress on the ground; they cannot reflect it precisely. 6. 27. The low level of public expenditure in 1994 reflects the late adoption of this programme. The annual distribution of expenditure was guided more by the financial perspective than by realistic expectations of implementation. In addition the annual tranches are established at programme level and are not necessarily geared to each of the 1 256 projects co-financed in Saxe-Anhalt during the period 1994-96. In 1997 only 20 % of payments were made in 6. 28. in 1994. The December, as compared with 48 % corresponding figures for commitments were 32 % and 60 %. The Commission’s proposals the next programming period would eliminate the concentration of Commission commitments and payments towards the year-end. for 6. 29. The procedures referred to by the Court would need to be set up within the Member States. The Commission agrees that Member State expenditure declarations are not always reliable. The proper application of Regulation (EC) No 2064/97 is expected to improve the situation. 6. 30. -6. 32. The Commission is aware that delays in financial procedures may be caused by problems with information flows in the Member States. It recalls, however, that its own payments generally take the form of advances to cover Member State expenditure which has not yet been declared. It is expected that the provisions of Article 2(2)(a) of Regulation (EC) No 2064/97 about the audit trail will improve the quality and the speed of these information flows. The trigger points are calculated on the basis of the expenditure amounts in the financial plans and the percentages provided for by Article 21 of Regulation (EEC) No 4253/88; on this basis, ignorance about trigger points at Member State level does not appear justified. The Commission’s proposals for the new programming period provide for the Commission to make payments on the basis of Member State expenditure declarations which will no longer have to reach a specific minimum level in order to trigger the payment. indicated Delays in payment by the Commission generally affect only the final instalment on a programme; they are usually due to lack of sufficient information from the Member State. The Commission cannot close a programme if it is not put in a position to do so. 6. 33. It is evident that the implementation rate of the programmes and the speed of the information flows from final beneficiaries through various intermediaries to the Mobilisation of resources 6. 35. The Court’s comment is based on the situation in Italy in 1994 and 1995. It is true that in the three Italian regions checked by in 1996, central government co-financing reached the region very late. But in two of the three regions the regional authorities opted to prefinance the amount payable by central government. Since then the problem has been solved (see reply to paragraph 7. 57 of the annual report for 1996). the Court separate from negotiations with to have the 6. 37. Quite Commission, Corsica dropped plans the incinerators at Bastia and Ajaccio financed under SPD 1994-99. For technical reasons the second project was not yet ready to be launched and the regional authorities preferred to carry out both projects at the same time. for 6. 38. -6. 39. Applications co-financing private investments are checked to ensure that they are in conformity with the current aid scheme (for Germany, the ‘Gemeinschaftsaufgabe’) and not to measure their possible impact on the economy or other external factors. 6. 42. It is recognised that the Italian administrative procedures are too long and complex. It is therefore more appropriate, as stipulated in the ‘Intesa’ (agreement between the Italian government and the Commission of 26. July 1995 aiming at improvements in the use of the Structural Funds in Italy), to streamline these procedures than to adjust Structural Funds programmes (including financial plans) to take account of the delays the existing procedures cause. 6. 43-6. 44. The Commission has long been aware of the effect of national currency/ecu exchange rate fluctuations. It does all in its power to attenuate these effects when they are negative. The legislation requires financial plans and accounts of operations to be drawn up in ecus, which eliminate the exchange risks for the Community budget and in a way promotes the Community currency. The effects referred to will disappear for Member States in the euro zone. As regards Italy, the fluctuation of the lira against the ecu had a detrimental effect on the closure of the 1989-93 programmes. However, it is not clear if an ‘effective reaction’, which would imply an increase in national spending to draw down all the 16. 11. 98 EN Official Journal of the European Communities C 347/89 available Community aid, would have been an available option in many cases. For example, due to the fact that they worked in the national currency and made their declarations on the basis of the amounts they received from the national Treasury in lire, many intermediary organisations managing global grants had no practical way of increasing their existing budgets. report of the previous year containing the data specified in Article 36 has been sent to the Commission (Article 31. 3). In addition, the Commission will be required to notify the Member State and the designated authority if intermediate the conditions any of payments is not fulfilled. for disbursing Implementation 6. 45. The definitions of commitment, final beneficiary and eligible expenditure were clarified with the adoption of the eligibility datasheets by the Commission in consultation with the Member States. More generally, the Commission makes a continuous effort to provide information; the Member States must also participate in this work as required by the regulations. 6. 46. The application of the Structural Funds in the new Member States inevitably required the setting up of new administrative systems and the adaptation of national systems to disburse and account for the expenditure of EU monies. Certain start-up problems arose but these have now largely been resolved. 6. 47. The offsetting of recoveries against payments at the level of the same national implementing authority is an accounting practice aiming at the simplification of procedures; it cannot be considered a valid reason for delays subsequent in programme. implementation of a the The Commission, rightly, does not make payments until the Member State has presented the necessary information. 6. 48. The ERDF and the ESF are not administered in the same way, but the regional managers of the Fund are familiar with and can handle these differences. In the Commission, lead DG acts as coordinator; coordination is achieved by interdepartmental meetings where operational and financial questions are raised and solved. the For the charging of Hainaut SPD projects between the ERDF and the Social Fund, the manager had access to all the necessary information concerning eligibility for the Structural Funds, since the separation between Funds was made clear both in the SPD and at partnership meetings with the region of Wallonia. 6. 49. The new general regulation proposed by the Commission details the contents of the annual report (Article 36) and provides that intermediate payments of funds will not be made unless the annual implementing reprogramming adopted 6. 50. The financial profiles of all measures in the Sardinia regional programme have now been adjusted in the in December 1997. Furthermore, measures have been modified to improve flexibility and to eliminate projects which cannot be implemented in the required time scale. This process will continue committees, depending on the progress made in implementing the revised programme. forthcoming monitoring in 6. 51. It is important to minimise delays relating to the need to ensure that all the projects comply with the relevant Community regulations. 6. 52. Sardinia: please see comments on paragraph 6. 50. Corsica: following delays, a reprogramming of the SPD was decided by the Commission on 30 July 1996. New procedures were introduced by the competent Member State authorities in November 1996 and January 1997 with a view to improving monitoring and implementation of the SPD. inevitable given that is 6. 53. Some delays are implementation of projects impossible to plan the should be precisely. The amendment procedures simplified by the Commission proposal to decentralise the implementation of operations. Irregularities must clearly be corrected even if this means a delay. it 7. CONCLUSION 7. 1. The annual commitment appropriations entered in the budget for structural actions correspond to the financial perspective. It is difficult to make accurate forecasts of requirements for payment appropriations, since they are related to the variable progress of hundreds of programmes and hundreds of thousands of individual projects. The Commission and the Member States are together seeking to improve these forecasts. In its current major review of the Financial 7. 2. Regulation the relationship between the horizontal and the sectoral financial rules. the Commission to clarify intends C 347/90 EN Official Journal of the European Communities 16. 11. 98 7. 4. The Commission does not consider its approach to budgetary commitments for Structural Funds programmes gives a confused image; it is clear that there is no precise relationship, during the currency of a programme, between commitments from the Community budget on the one hand and the real progress of a programme on the ground on the other hand. that financial plans are considered useful by The programme managers. the The Commission’s proposals for the period 2000-2006 are designed to clarify responsibilities in the area of programming and increase the degree of decentralisation to the Member States. 7. 5. Those concerned with the policy management and/or the financial management of a programme at any given level need to be in possession of the information which they require in order to do their own job properly. The Commission’s recent Regulation (EC) No 2064/97 on financial control includes requirements, for example on the audit trail, which should improve the quality of financial information. The Commission hopes to establish for the next programming period an improved horizontal information system to replace ARINCO. However, it is not necessary for everyone concerned with the Structural Funds to have access to the same global stock of information. In particular, the Commission does not consider that it requires access to detailed information at project level. to which receive without unjustified delay they are entitled. Once is to ensure that the 7. 6. The main requirement the beneficiaries payments the Commission has paid the advance, this must depend essentially on the efficiency of Member State financial circuits and procedures. The Commission was obliged to make payments through commercial banks in most Member States, since payments are made in ecus and only two Member States have authorised the national treasury to keep accounts in ecus. As of 1999, this complication will disappear in the Member States members of the euro zone. 7. 7. The Commission would point out that the Court’s chapter 6 concerning delays mainly reflects the experience of managers of programmes with the greatest delays (3 % of the total). Most of the programmes proceed normally with no great delays. The Commission, however, accepts that several aspects of programme management could be improved and speeded up. Its proposals for the reform of the new programming period should make a major contribution to this improvement. 7. 8. The Commission intends to play its part to the full in this effort in favour of improvement