Presentation of the Court of Auditors' annual report - 2009 (debate) 
President
The first item is the presentation of the Court of Auditors' annual report for 2009.
Vítor Manuel da Silva Caldeira
President of the Court of Auditors. - Mr President, it is an honour for me to be able to participate in the debate today on the European Court of Auditors' annual report on the implementation of the 2009 budget, which I have already presented to you and to the Committee on Budgetary Control.
I would like to present to the House the four key messages contained in this year's annual report. First, the Court concludes that the accounts of the European Union give a fair presentation, and a true and fair view, of the financial position and the result of operations and cash flows. This is the third consecutive year the Court has found the accounts to be free from material misstatements and reliable.
As regards legality and regularity, the Court gives an unqualified opinion on revenue and commitments, as in previous years. However, and this is the second key message of this year's annual report, payments from the budget continue to be materially affected by error, except in two areas. Those exceptions are administrative expenditure and economic and financial affairs.
In all other areas of expenditure, the Court found material levels of error. I will focus on the two main areas of expenditure: agriculture and cohesion.
In the area of agriculture and natural resources, the Court estimates the level of errors to be somewhat higher than in 2008. However, the results are consistent with the Court's assessment, in both years, that systems are only partially effective. The Court recommends reducing the risk of error by improving the quality of information in the databases used for establishing entitlements and calculating payments, and by clarifying and enforcing rules on land usage and maintenance.
In the area of cohesion, which represents almost a third of the budget, the situation remains that this is the only budgetary area where the estimated error is over 5%. Most of the errors found relate to serious failures by national authorities to apply rules on public procurement and to the reimbursement of ineligible costs. Many errors could, and should, have been detected and corrected by Member States before certifying expenditure to the Commission, as the audit shows they had the information to do so.
If we analyse this year's results and compare them to last year, we see that the most significant change is in cohesion. That brings me to the Court's third key message. The estimate for the most likely error in cohesion spending was significantly lower than in previous years, and for the budget as a whole, the Court's estimate of errors has fallen over recent years.
However, a degree of caution is necessary before drawing any conclusions about the trend in this area; due to variations in spending patterns, the population of payments can change considerably from one year to the other - 2009 being notably different from 2008. Moreover, there is no guarantee that the overall fall in the estimated error rate over recent years will continue, so long as the systems covering the vast majority of disbursements remain only partially effective.
That brings me to the last key message. The information provided by the Commission on recoveries and other corrections is not yet completely reliable and cannot be meaningfully compared with the Court's estimated error rate.
There are a number of initiatives before us which provide an important opportunity to improve the financial management of the European Union. This year's annual report confirms the conclusions and the recommendations set out in the Court opinion on the risks and challenges for improving the financial management of the European Union. Improving the quality of spending should be a high priority. Simplifying the legislative framework and introducing more cost-effective control systems to reduce the risk of errors should contribute to this goal.
Earlier this year, the Commission presented a draft recast Financial Regulation. In its recent opinion on this, the Court concludes that it contains a number of proposals that provide opportunities for the Commission to improve transparency and financial management. Simplification of sectoral legislation remains, however, an important route to a significant improvement in the quality of spending.
Next year, the Commission will present legislative proposals for policies and programmes covering the main areas of expenditure in the next programming produced. When revising expenditure programmes, the Court suggests applying a set of principles to ensure that European added value is likely, that the objectives are clear, that the schemes are as realistic and simple as is reasonably possible, and that accountability is also clear.
Ensuring the European funds are spent optimally places heavy responsibilities on all of us: on the Commission, when proposing legislation and implementing the budget; on the Member States in managing, day-to-day, some 80% of the European budget; on Parliament and on the Council as legislator and as the discharge authority; and on the Court as the Union's external auditor.
The Court looks forward to playing its full part in efforts to ensure that the funds are spent correctly and are spent well.
Algirdas Šemeta
Member of the Commission. - Mr President, two days ago, President Caldeira and I already had the opportunity to exchange our views and to discuss the Court's annual report with the members of the Committee on Budgetary Control. I would like here to outline the main points of the discussion and the very first conclusions.
Before entering the heart of the matter, I would like to recall the fruitful dialogue between the auditor, the Court and the audit team in the Commission and to thank President Caldeira for this excellent cooperation. I am pleased with the Court's recognition of progress made; I see indeed many positive messages; I also see some criticism and it is the Commission's commitment to closely follow up on all the Court's recommendations.
The main messages of the Court's report are key for the Commission's own assessment of the way it assumes its responsibility in managing the EU budget.
Firstly, for the third year in a row, the annual accounts have received an unqualified positive opinion. The Court has evaluated the EU accounts as giving a true and fair view without any reservation. The Commission is, of course, very satisfied with this result as it confirms the lasting effects of our accounting reform. However, the Court rightly highlights certain weaknesses. While none of these affects the Court's unqualified opinion, the Commission is determined to address these weaknesses and therefore continues to improve its day-to-day accounting practices. With regard to the legality and regularity of transactions, I am pleased that the positive trend in the reduction of the overall error rate continued in 2009.
Revenue and commitments for the entire budget are legal and regular in all material respects. More than 95% of payments made from the EU budget are free from error. This verdict is a positive sign that our efforts to further improve control are having a concrete impact. This has been achieved mainly thanks to a substantial reduction of the error rate in cohesion; this progress reflects the Commission's enhanced supervisory role through the ex-ante assessment of management and control systems of the Member States. It also reflects the merits of a rigorous approach in either interrupting or suspending payments where problems were identified.
Finally, in its report, the Court recognises the higher quality of the information about recoveries provided by the Commission, as disclosed in the accounts. The increase in the value of funds recovered from projects where errors were found or from national authorities responsible is indeed another sign of this Commission's determination. However, I share the Court's view that the Member States' reporting is not yet satisfactory and the Commission will pursue its efforts to remedy this situation for the existing programmes, and also for the next generation of programmes and the shared management.
I fully share the caution of President Caldeira when he warns of possible oscillations of the error rate, in particular in cohesion, in the future. I also agree with the Court when it points out the weaknesses of the Member States' systems and some other issues in shared management. In my view, the way forward includes the design of cost-effective control mechanisms; the simplification of eligibility rules where their complexity is an obvious source of errors; and the improvement of the quality of the information provided by the Member States regarding financial corrections and recoveries.
But this list is not exhaustive. Our discussion on Tuesday showed that there are other challenges before us, for instance, a greater accountability for the key financial actors, in particular, the Member States, and a cost-effective control policy based on risk and performance. Moreover, in preparing the budget review, I have promoted the new focus on impact rather than input through the definition of clear and measurable objectives and key performance indicators. I presented last May my agenda on discharge, audit and anti-fraud for 2010-2014 in the Budgetary Control Committee of this House. This agenda outlined the key strategic objectives and concrete steps which the Commission will take to move further towards a positive Court statement of assurance. In the light of the Court's 2009 annual report, this agenda remains fully relevant for our future actions.
To conclude, I am pleased that the 2009 annual report corroborates that our efforts bear results. It constitutes an important and timely input to our reflection on how to achieve a more effective and efficient financial management of the EU budget which should guide us in preparing the next generation of programmes.
Ingeborg Gräßle
Mr President, Mr Caldeira, Mr Šemeta, ladies and gentlemen, we have a very good day ahead of us, because for the first time, we can expect the Barroso II Commission to cross the 2% barrier. We do not really need the tolerable risk of error. This is why the Court of Auditors' report that has been submitted to us definitely represents very good news, in particular, for all of those who are working in this area. It is clear that when the Commission makes a genuine and determined effort, it can come up with the results.
If we look at these results in more detail, it is obvious that they are in part due to the changes in the regulations. This is definitely the case and this is the route which we must take in future. If the Commission could bring itself to revise the directive concerning public procurement and genuinely make things simpler for public bodies in the Member States, this would certainly be the biggest step that we could take towards a positive statement of assurance.
I would like to say to everyone who constantly maintains that the European budget is exposed to major risks, it is true that European spending should certainly be subject to more consistent controls than national spending. European money is monitored more consistently and has to be accounted for more consistently than many areas of national budgets, as always becomes clear when we visit the Member States, because the national regulations have only been put in place as a result of the European regulations. Therefore, we simply need to encourage the Member States and call on them to subject their national spending to the same controls as European spending and vice versa.
I would like to thank the Court of Auditors, but I would also like to say that I am disappointed by this annual report. I have already mentioned that the annual report contains significantly less information than it did in the past. We need details of the error rates. We have always been given this information for the structural funds, but this year, for the first time, we have not received it. We are not at nursery school here. We in Parliament rely on having this information. When I look back at the hearing involving the members of the Court of Auditors, I recall that they promised to work closely together with Parliament. I do not believe that this promise is being kept.
Georgios Stavrakakis
on behalf of the S&D Group. - Mr President, I would like to welcome the annual report and congratulate President Caldeira and all the Members of the Court for their excellent work. Allow me especially to thank Mr O'Shea for the excellent cooperation we had concerning the agencies.
Our role as a parliament is accountability towards the citizens, so we have to make sure that taxpayers' money is used properly, transparently and effectively. I expect that the findings of the annual reports concerning the agencies, to be published later, will follow the same trend as in recent years. The situation is getting better, but there are still control systems to be improved, problems to be tackled and solutions to be found.
In the current major economic and social crisis, the significance of monitoring has become more important than ever before, and we in Parliament and the Court of Auditors are together committed to dealing with, and solving, the problems in order to achieve even better results.
Jorgo Chatzimarkakis
Mr President, Mr Šemeta, Mr Caldeira, I would like to thank the Court of Auditors for this report. Your organisation, Mr Caldeira, provides an essential service for European taxpayers. It is a good thing that the reduction in the error rate has continued this year. This is the result of the reform of the Commission which was pushed through by the liberal Commissioner, Mr Kallas. There are major improvements over the previous year in the area of cohesion and only a slight deterioration in agriculture. However, the Commission should not now simply sit back and do nothing. We must make it clear that the huge improvements are based on a very lucky choice of samples. Therefore, I am concerned that the positive trend will not continue next year. We should make use of the momentum from the first budget discharge under the Treaty of Lisbon to introduce a decisive paradigm shift.
I would like to make it clear once again that this year's report from the Court of Auditors is the sixteenth in a row which does not have positive overall results. How can we finally bring an end to the inefficient and wasteful allocation of funding and to the political connivance in this area?
My proposals as rapporteur are as follows: Firstly, the Commission must intervene more strongly in the case of obvious errors and, where these errors are repeated, it must suspend the funding. How is it that a Member State of many years standing like Greece is not subjected to sanctions over a period of 10 years, despite the fact that it is in obvious breach of the provisions of the Integrated Administration and Control System (IACS)?
Secondly, we must no longer impose double penalties on taxpayers. The beneficiaries of EU funding which has been allocated illegally are only required to repay 10%. In accordance with the 50:50 rule, the Member States contribute half of the amount from their national budgets. This is an insult to taxpayers. Let me give you a few figures. Between 1994 and 2006, the Member States have been wrongly allocated a phenomenal EUR 7.7 billion in the area of cohesion policy. The Commission itself has just made this fact public. Only EUR 709 million has been paid back, which demonstrates very clearly the difference in these circumstances. This is probably correct, because the Member States are not in a position to come up with accurate calculations. The Court of Auditors has confirmed this.
Thirdly, all the Member States must finally sign and submit national management declarations. Fourthly, the Commission must be politically accountable. This is why we want signatures at least from Mr Barroso on the synthesis report on annual activities. We also want an evaluation report, which is provided for in the Treaty of Lisbon.
There are still some things that are in need of improvement. All in all, I would like to thank the Court of Auditors very much for this report.
Bart Staes
Mr President, ladies and gentlemen, when I read this annual report, I experienced a feeling of déjà lu, a feeling that I was once again reading something that I had been reading for many years. First of all, in particular, too many material errors are occurring in the areas of agriculture, the Cohesion Fund, research and development, external aid, development cooperation and education. Secondly, the supervisory and control systems have been only partially effective in preventing and correcting reimbursement of claims for excessive or ineligible costs.
Ladies and gentlemen, we are still faced with the fundamental problem that Member States are not doing what they ought to be doing, which is properly monitoring the money they pay out to beneficiaries. We are talking here about 80% of the European budget. Another fundamental problem that remains is that the Commission is not making sufficient efforts to monitor the activities of the Member States in this regard.
I therefore endorse the rapporteur's strategy, which will entail, on the one hand, ensuring that we demand, above all, national management declarations signed by ministers of finance and, on the other, ensuring that the Commission finally takes action against any Member States that remain in breach and, if need be, imposes tough sanctions: of a financial kind, for instance - withholding subsidies. That is, in my view, the path we need to follow.
Ryszard Czarnecki
Mr President, the Court of Auditors is a kind of great superintendent, we might say a policeman, a friendly policeman, although sometimes I have the impression that it turns a blind eye and is too good and too benevolent towards the institutions which it supervises. The conclusion of this report, the conclusion of the Court's work is as follows: 'good, but not perfect'.
I have the impression that many people in Europe are more pessimistic than the Court of Auditors. The Court must have a greater role, the Court must be credible, so that the European institutions will be credible in the eyes of the taxpayers and voters. However, for the Court to be credible, it must really be very scrupulous, because the Court is saying, today, that it is glad the glass is 95% full, while I think many taxpayers will ask: 'but why is it 5% empty?' All the more so, because there is a widespread belief that it is more than just 5% empty. I do agree with one conclusion - supervision at European level is sometimes more detailed, perhaps, than in Member States, and I call on the Court to exercise greater supervision in the Member States, where the money is quite simply frequently disappearing down the drain.
Søren Bo Søndergaard
Mr President, I would like to thank the Court of Auditors for an excellent report. As we have heard, overall, there has been a reduction in the number of errors being made. What should we make of this? In my opinion, this depends on two things: the starting point and our expectations. The starting point was horrendously poor. In 2008, billions of euro were paid out in contravention of the rules. Therefore, the expectations were that there should not only be improvements, but that there should be significant improvements in all areas.
So, has this happened? Yes, in the area of cohesion, there has been a definite reduction in erroneous payments, which is a good thing, even if their level is still unacceptably high. In other areas, however, there has actually been a rise, which is quite simply not good enough.
The other day in the Committee on Budgetary Control and again today, Commissioner Šemeta claimed that the overall reduction in the number of errors was a result of the Commission's efforts. That is fine by me. I am happy to give the Commission the credit. In that case, however, it is also clear who will be responsible if the error rate increases next year. Please take that as an invitation.
Marta Andreasen
on behalf of the EFD Group. - Mr President, year after year over the last 16 years, the auditors have been refusing to clear 90% or more of the budget, and this year is no exception. They talk about errors, but the nature of the irregularities they find goes far beyond that of a mistake. Suffice to say that such a situation would cause the closure of a company in the private sector and the conviction of its directors.
The fact is that taxpayers' money has been unlawfully spent. This year, the auditors claim that at least GBP 6 billion should not have been paid out. What is the essence of the problem? The lack of responsibility.
The Commission and the auditors will, as usual, blame the Member States, but the fact is that the failure resides within the Commission due to the lack of proper controls. The Commission is in the best position to establish the rules and to sanction those who breach them, but it has failed all along and this Parliament also bears responsibility, as it has approved the situation every year and keeps asking for an increase in the budget.
There is no hope any more that the EU budget will ever be cleared by the auditors. At this point, the only way to protect taxpayers' money is to reduce the EU budget drastically.
Now I address the British Prime Minister. Mr Cameron, in accepting a 2.9% increase for the 2011 EU budget, you have failed dramatically. On behalf of British taxpayers, I hereby request that you lead the demand for a significant reduction of the 2011 budget.
Martin Ehrenhauser
(DE) Mr President, it is true that the error rate in the area of cohesion has fallen significantly from 54% in 2007 to 36% in 2009. That is correct. It is a fact, and even I have to acknowledge that. However, as the rapporteur has already said, if you look more closely at how these figures have been produced, it is obvious that they must be seen in relative terms. It is also a fact that, according to this report from the Court of Auditors, the control systems in the area of cohesion are not effective. In addition, it is a fact that at least 3% of the money should not have been paid out at all. This means that there is still a great deal for Mr Hahn to do, among others, to put this portfolio in order.
In my opinion, the increase in the error rates in the area of agriculture is obviously a retrograde step. Furthermore, wastefulness, in cases for example, where subsidies for miners are paid to billionaires, is not counted as an error.
I have already mentioned in the committee that I have not received an answer either from the Court of Auditors or from the Commission with regard to the social security benefits which have been paid twice. Once again, my question is: Who made the error in this case? Will the money be paid back and how big is the amount involved? Finally, I would like to say that it is important in future for the Court of Auditors not only to check that payments are being made legally, but also to ensure that they are cost-effective and efficient.
Cătălin Sorin Ivan
(RO) First of all, I wish to thank Victor Caldeira for this clear report, which is relevant to the Commission's activities and the implementation of the 2009 budget. Secondly, I want to clarify from the start something of vital importance to us: once every five years, we are elected and sent to the European Parliament by Europe's citizens, the people who pay taxes and duties and who ultimately make this budget. From their point of view, based on the fact that we regularly go back home and meet with them, the implementation of the 2009 budget cannot be regarded as a success. Let me give you just two reasons for this.
Firstly, the national management declarations made are not supported politically. In other words, there is no signature either from the minister for finance or the prime minister. As a result, we do not know who is responsible for these national management declarations and to what extent they are comprehensible and accurate. In practical terms, this paves the way for false reporting and, if not false, then at least incomplete.
Secondly, where errors have been made in the management of European funds, every state must pay the money back to the Commission. In other words, Europe's citizens pay money once to create the European budget and, on the other hand, as losers, they again cover the loss in the national budget. Therefore, the citizens of the European Union pay twice for the mistakes, errors or even fraudulent acts committed in the management of European funds.
Thirdly, I support the Commission and the European Court of Auditors. I, too, am in favour of closer ties between this institution and the national audit bodies in each Member State. I believe that if we want to have more money in the budget, we must spend better, in the first place, the money we have. To spend better the money we have, we must first of all know where problems are and how we can solve them.
Luigi de Magistris
(IT) Madam President, ladies and gentlemen, I believe that if we can now talk about a reduction in errors, we owe this to the skill, independence and professionalism of the Court of Auditors, and I should like President Caldeira to take note of this.
I believe that, as well as the Commission, Parliament played an important part in this improvement, in particular, the Committee on Budgetary Control, which sets great store by the subject of transparency and the effective and efficient use of public funds.
We must still see what we can do to improve, however, because there are still too many things that are not right, particularly in very sensitive sectors such as agriculture and cohesion, with often worrying error rates in sectors where fraud in areas such as contracts and over-invoicing is rife. I believe that it is necessary to lower the rate of bureaucracy and reduce pointless red tape and instead introduce a few clear rules to send out a very clear and determined 'no' to every form of fraud in sectors where corruption is endemic.
Another important factor is to step up the role of OLAF, the anti-fraud office, to combat all forms of fraud and corruption. Another aspect that we cannot fail to emphasise - we learned this also from a recent visit by the Committee on Budgetary control to Italy - is that there is also a risk of the forceful influence of organised crime and forms of corruption on public funds. The role of OLAF could therefore be essential from this viewpoint, together with greater cooperation between Member States, the Commission and Parliament.
Another absolutely essential point is that I believe the Commission must strengthen its independence from Member States. I believe that we must block funds to prevent repetition of this type of behaviour, particularly in states where serious errors - I am not talking about minor errors - and very substantial episodes of fraud have been going on for years.
The credibility level of the European Parliament and the European institutions is determined greatly by the level of transparency and correctness with which public funds are spent. I therefore believe that we have room for improvement on this score.
Peter van Dalen
(NL) Madam President, although the Court of Auditors states that the accountability of European expenditure has improved, it has failed to grant a full declaration of assurance for the expenditure. That is partly because, while some improvement has indeed been shown as regards the second largest item, cohesion, there are still errors in approximately 40% of the projects. Thus, out of a total budget of EUR 35 billion, there are EUR 2 billion for which no declaration of assurance could be granted. I find that unacceptable; the Commission, in particular, should therefore thoroughly investigate how these errors could have arisen and how they might be reduced. This is especially important in consideration of the discharge of the 2009 budget.
Yesterday, Mr Engwirda, a member of the Court, stated that the errors were primarily due to the complexity of the procedures. That again demonstrates that it is imperative that Europe become simpler and more transparent. If that does not happen, our citizens will continue to see Europe as complicated and overly remote.
(The speaker agreed to take a blue card question under Rule 149(8))
Jens Geier
(DE) Madam President, I would like to ask Mr van Dalen whether he is aware that the high percentages refer only to the percentage of the sample. In other words, it is not 36% of the payments that are in error, but 36% of the payments in the sample. If this is extrapolated up, the result is at least 5% in the case of the Cohesion Fund. Therefore, the billions that you referred to are not accurate amounts. Were you aware of this?
Peter van Dalen
(NL) Madam President, I fully understood that. The real issue for me is that no declaration of assurance can be given for billions of euro, which is why I have asked the Commission to investigate that thoroughly and also to examine how the situation might be improved. Fortunately, the Commissioner has already indicated in his speech a minute ago that he will initiate such an investigation and that he will take the matter seriously.
Franz Obermayr
(DE) Madam President, estimates provided by the European Court of Auditors show that EUR 6 million disappeared from the European budget in 2009 as a result of carelessness, mismanagement, fraud, ignorance and a lack of checks. The Court of Auditors has revealed the scandalous fact that around 40% of EU officials are receiving double the normal amount of family benefits. Greece is once again causing problems. It has not only been bailed out by other Member States with a rescue package amounting to billions of euro, but is also the front-runner when it comes to subsidy fraud. You only need to look at the wooded areas for which Greece has claimed subsidies for green spaces to see the sheer audacity of its behaviour.
Of course, the situation is particularly bad when it comes to the regional subsidies. As the previous speaker has said, if 36% of the payments that were checked were made in error, that is bad enough. This is why we are calling on Mr Hahn to take drastic measures with regard to his very important portfolio. We do not have money to give away.
Finally, I would like to compliment the committed employees of the Court of Auditors. They are highly motivated and we politicians should be encouraging them to make even more careful checks. As politicians, we are in a position to draw up and implement guidelines.
Jan Olbrycht
(PL) Ladies and gentlemen, I think that in discussing this report, we must take care to be sufficiently precise in our statements, because we are very often also talking, here, about errors, irregularities or embezzlement. The report shows very clearly that in terms of the error rate found for cohesion policy, there has been a definite reduction. It is at a level of around 5%, in relation to which we cannot at the same time talk about errors at a level of 20, 30 or 40%, because this simply confuses the overall picture. We have, here, a clear improvement in what certainly is a very complicated policy, since it is managed jointly with the Member States. A problem for all of us is how to improve this policy, which has a structure which is simply very demanding and very complicated but which has huge added value. The situation is changing, and this should be noted with satisfaction and stated positively.
However, I would like to draw attention to a certain disturbing part of the report, and I quote: 'Taking this into consideration, the Court concludes that it is not possible to make a meaningful comparison between its own estimate of error rates and the data for financial corrections and recoveries supplied by the Commission.' I think this statement is very important and significant for the future, because we do not want a situation in which the Court concludes that it cannot reach agreement with the Commission about results. More work is needed, here, and this matter needs to be explained.
Christel Schaldemose
(DA) Madam President, I would like to thank the Court of Auditors for once again providing us with an excellent tool for evaluating our use of money within the EU. Fortunately, we can confirm that we are moving in the right direction, even though there are still many problems. However, because things are moving in the right direction, I think we should use the time to take a closer look at what the next step should be. If we look at the situation with regard to administrative expenditure, for example, we can see that we have an effective control system and few errors. In my opinion, however, this is not enough. We also need to take time to examine whether we are actually using the money in the right way.
Administrative expenditure is our expenditure on salaries, buildings and such like. In this regard, we ought to ask ourselves whether we are really getting enough for the money that we spend on salaries. Are we using the money in the right way in respect of how we manage our buildings, etc.? I believe that we now need to take the debate a step further so that we discuss the question of whether it is efficient enough, and so that we also obtain a significantly greater degree of transparency with regard to this. I therefore call not only on the European Parliament, but on the Commission, too, to demonstrate a considerable willingness to provide greater transparency and to engage in this debate.
Andrea Češková
(CS) It is now the second time in the current session that the annual accounts of the European Union have come up for discussion. In the first place, I would like to express my sincere thanks to Mr da Silva Caldeira and his team for the work they have done. On the other hand, I am surprised at the level of error that is again occurring in almost 92% of budget expenditure, counting all chapters with the exception of administrative expenditure and economic affairs. I would like to ask to what extent are the Member States responsible for these errors and to what extent is a lack of control on the part of the Commission responsible.
The answer indicated in the report is that there are many deficiencies in the actual control systems of the Member States. I believe that what we need most of all is greater cooperation and openness from the Member States, if such large-scale errors are to be prevented.
Tamás Deutsch
(HU) Madam President, ladies and gentlemen, colleagues, the Court of Auditors have done an excellent job drafting the report auditing the EU budget for 2009, and Mr Caldeira and the members of the Court of Auditors deserve credit for their work. I agree with those speakers who have said that the report shows clearly and unambiguously that there is an improving trend as regards the use of EU funds and that the overall error rate is falling. Nevertheless, we need to draw clear and obvious consequences from the report as to what we have to do here in Parliament, in the Commission and in the other EU institutions.
The falling error rate, however, means nothing less than that, according to the Court of Auditors, several billion euro of EU funds have been used incorrectly or irregularly, which may even give rise to the suspicion of crime. This means that action has to be taken. There is one measure in particular which I would like to mention, namely, that it would be extremely important that the Court of Auditors prepare a breakdown by Member States in the next period to show the extent of the error rate in the use of EU funds and the standard of operation of the control mechanism in each state. This, too, may contribute to a further reduction in the error rate.
Inés Ayala Sender
(ES) Madam President, once again, we welcome the improvements introduced through the intense dialogue between the Court of Auditors, the Commission and, of course, Parliament. This year's report, however, also shows that we cannot rest on our laurels, and that we need to remain vigilant.
I also think that Mr da Silva Caldeira's proposal for the future regarding cooperation to improve and simplify the important aspects of the Financial Regulation is very positive, as are the new legislative proposals on which we could perhaps work together to achieve a successful result.
With regard to the other institutions, I will be paying very close attention to all the aspects related to the Council's operating expenditure, especially the Secure European System for Applications in a Multi-vendor Environment system, in which there is a specific reference to the need for improvements in forecasting the Council's budget, and also to isolated aspects relating to the European Ombudsman and the European Data Protection Supervisor, whose budgets appear to be severely reduced. I am also interested, however, in the fact that we have had information that a case has been passed on to the European Anti-Fraud Office in relation to the Economic and Social Committee. In addition, I would like to know the opinion regarding the significant increase in staff in the Committee of the Regions between 2009 and 2010.
Iliana Ivanova
(BG) Ladies and gentlemen, it is vitally important that we emphasise the fact that the Court of Auditors' conclusions acknowledge the progress which has been made by the Commission in controlling the absorption of European funds. However, at the same time, I hope that the recommendations and proposals made by the European Parliament in the discharge reports, reiterated for years on end, will actually be taken into consideration, especially in the areas where we still have a high level of irregularities. The quality of the information supplied to us by the Court of Auditors should be even better as well. I believe that we should really be given the precise figures and level of irregularities which we need to know.
The good news for 2009 is that the level of irregularities in the area of cohesion policy has fallen significantly compared to last year. However, the big question remains whether this reduction will be sustainable over time or is simply a fluke which may also be due to the specific countries chosen to be audited.
However, in any event, there are unresolved issues on the agenda, linked to irregularities in the areas of external aid, development and enlargement, agriculture, research, energy and transport, education and citizenship.
I want to assure the Court of Auditors, the Commission and Council that our work in the European Parliament's Committee on Budgetary Control will be very extensively and essentially focused over the coming months on making the management of European funds more efficient.
We will continue to emphasise the responsibilities which need to be assumed in this regard by the European Commission and Member States and strictly adhered to, as well as the measures to be taken against offenders in order to achieve a real result in protecting the interests of the European taxpayer.
Jens Geier
(DE) Madam President, Mr Caldeira, Mr Šemeta, cohesion policy is the sick man of the EU budget. Last year, he was in intensive care and this year he is convalescing. However, he is far from making a full recovery and he could have a relapse at any time. More than 5% of all the cohesion policy payments were in error and 3% should not have been made at all. This amounts to around EUR 700 million. A large proportion of these erroneous payments could have been prevented by the Member States. The errors are occurring in public procurement and in the payment of cohesion funding, despite the existing control systems, which have been approved by the Commission. We need to take another careful look at these control systems. In my home country of Germany, the samples showed that all the control systems there which had been tested were only partially effective.
The responsibility for managing the budget lies with the Commission. We can discuss this contradiction - errors in the Member States which are the responsibility of the Commission - in our home countries, we can explain it to the media and we can tell our citizens about it. However, in political terms, it is the job of the Commission to resolve this problem in the Member States. Mr Šemeta, you need to take control in this area and you will have our support for doing so.
Lambert van Nistelrooij
(NL) Madam President, representatives of the Commission and the Court of Auditors, I rise as coordinator for regional policy of the Group of the European People's Party (Christian Democrats).
Looking at the error rate, I see that a clear improvement has been made in terms of cohesion. We can now see the impact of the new regulations we adopted for the 2007-2013 period and of the action plans which were keenly advocated, not only by Parliament, but also by both the current and previous Commission. Most of the problems, or errors, are to be found in the public procurement dossier. Transposition of European legislation into the laws of a number of Member States and the associated implementation have driven up the error rate to its present very high level.
I therefore ask the Commissioners to come up with an action plan that would, amongst other things, put pressure on Member States or support them with regard to public procurement. Last week, I had the opportunity of heading a European Parliament delegation to Romania and we were able to see how they were struggling with this and what kind of difficulties they were up against. We could make a lot of progress here.
Finally, I, too, am very much in favour of national management declarations; that is, financial declarations that Member States would be required to submit, because Member State level is precisely where most of the faults lie.
Derek Vaughan
Madam President, I want to be as positive as I possibly can about this report, because I always believe that we should use audits to improve things and to learn from our mistakes. There are many examples where this can be done by the Commission, by Member States and by beneficiaries in order to improve matters, for example, in agriculture. Constant changes in requirements by the Commission cause difficulties for Member States and beneficiaries; in Wales, they tell me that all the time. To reduce claims for ineligible land by farmers, the Commission could also provide legislation which clearly defines active farmers across the EU, which would then be used by all Member States, whereas at the moment, they have some discretion. Lastly, with CAP reform imminent, there is a golden opportunity to simplify the processes to ensure that in Europe, we have value for money for our spending, but also continue to provide benefits for individuals and communities.
Andrzej Grzyb
(PL) Madam President, presentation of the results of the European Court of Auditors' work always gives superb information which enables a comparison of what things were like in the past with what should be done in the future. What can the general conclusion be? It seems to be the case that wherever procedures are less complicated and it is easier to use money, we find fewer material errors. The more complicated the policy, the more the significance of errors, and sometimes also of irregularities, rises. One such example is cohesion policy, which is also very important for the European Union. This is why it has also been concluded, here, that the Union's agricultural policy has a high error rate, but where procedures for the use of funds have been simplified, there are fewer errors than where it is more complicated.
I would like to draw attention to the significance of cooperation with national supervisory bodies, but also - and this has not been spoken about - the significance of cooperation with national parliaments and, in particular, with committees for European affairs, budgets and budgetary control. I personally was a member of the Polish national parliament at the time when we started working with information from the European Court of Auditors, and it was very well received by the members.
Karin Kadenbach
(DE) Madam President, I would like to offer my very sincere thanks to the Court of Auditors. This report is an impressive demonstration of the fact that the controls are constantly improving. I am not necessarily concerned by the error rates that have been highlighted, because I believe that the auditing process is a learning system. It involves looking more and more closely at the problems and, thank goodness, discovering an increasing number of errors. Our task is to work together to avoid these errors occurring in future. Therefore, I would like to draw everyone's attention once again to the Fifth Cohesion Report which was presented yesterday. The Commission is inviting everyone involved to express their opinions about the questions raised in this document. This represents a major opportunity to lay the foundations for future subsidy arrangements which will ensure, on the one hand, that subsidies in this area are easier to obtain, that access is simplified and red tape reduced, and that, on the other, the necessary strict controls are in place to protect the taxpayers' money which is being used.
Therefore, I am calling on everyone involved to comply with this request from the Commission. We in Parliament will, of course, do so.
Algirdas Šemeta
Member of the Commission. - Madam President, the debate today demonstrates that further progress was achieved in 2009 in the management of the European budget. The clear opinion of the Court on the accounts and the lowest error rate ever for the whole budget, as disclosed by our external auditor, confirm that the Commission took the right decisions and proposed adequate measures to improve the performance of the programmes under the current financial period.
However, the Court also highlights the areas where further progress is needed by all financial actors. I refer, of course, to the Commission, and also to financial actors in the Member States whose obligations and responsibilities under shared management have been clearly reinforced under the new Treaty on the Functioning of the European Union.
Many of you talked here about the application of sanctions to the Member States, and I have to say that the Commission applies sanctions very rigorously. Just now, we are in the process of the suspension or interruption of 40 cohesion programmes amounting to EUR 1.75 billion. That is a huge amount, and what is more important is that the number of actions in 2010 almost doubled compared with the number of actions in 2009. Just last Friday, we also made a decision to call back unduly spent money in agriculture to an amount of more than EUR 578 million; so we really apply these sanctions rigorously and we intend to do so in the future. You can also see from the report by the Court of Auditors that the level of recoveries and financial corrections has increased significantly over the years, amounting in 2009 to EUR 3.3 billion. That is also a very significant amount, and our intention is to continue this policy and apply sanctions very rigorously when this is needed.
The Court's report, and the discharge procedures starting now, will be instrumental not only in addressing the weaknesses of the current programmes but also in drawing lessons for the next generation of programmes. The Court rightly pointed out the way forward, which is, of course, simplification and improvements in the procurement rules, because it is true that the vast majority of errors were made because of the violation of eligibility criteria or of procurement rules. We have to learn lessons from this, and the Commission is ready to do so. It will follow up on the Court's recommendations and is looking forward to a fruitful discharge procedure.
Vítor Manuel da Silva Caldeira
President of the Court of Auditors. - Madam President, honourable Members, thank you for all the kind comments that you have addressed to the Court on this occasion, as a tribute also to those who work in our institution each day addressing, with the highest professional standards, and in accordance with international audit standards, the concerns of this institution. We pay due attention to the recommendations of this House and let me just give you two examples of what we have done in this annual report for 2009 to address the request from this institution for more information.
We provide you with an overall assessment of the situation; for the first time, we say what the overall situation is. We conclude that it has improved over recent years; the most likely errors for the whole budget are decreasing. We have also provided you, in particular in the area of cohesion, with more information than last year, because last year we said that at least 11% of the funds should not have been paid; this year, we are able to say that the most likely error estimated is indeed over 5%, which we could not say last year, and that at least 3% of the funds should not have been reimbursed. This is the measure of the progress we have found. These are facts. Why? What are the reasons behind this? What progress have we achieved? We are not inventing facts; we are not being kind to the Commission or kind to the Member States. The Court is an independent audit institution governed by the treaty. We base our findings on the evidence and it is what we report to this institution, which we have the obligation to assist in this discharge procedure.
We are willing to assist you in this work and the main reason for this, as we said in our report, is that on the one hand, the systems put in place to manage the funds for this programme period 2007-2013 are performing better. The other reason is that the disbursement of funds for the programming period is only 25%, so the financial execution for the period is, in our evidence, lower than what should be expected. So the combination of these two factors - better performance of the systems on the one hand and lower execution, so fewer payments effectively made, on the other - has given us the situation where we now are. This is where we have this word of caution. We have to see how things evolve now with the systems behaving so well across all the 27 Member States and with all the funds to be disbursed in the future. So a word of caution.
But I said that we are willing to assist this House, and particularly the Committee on Budgetary Control, in its discharge. Our Members will assist you with that and provide you with all the information you need. But we are also assisting you through our special reports. You can find audits and other elements which look at the impact of the funding in real life, at how effectively they have been used, and I think that this is very valuable information for this institution also.
Clearly, the responsibility for implementing the budget lies primarily with the European Commission, but the Lisbon Treaty says also in cooperation with the Member States. If we have to look forward, I would say that we now have a unique opportunity to build a new momentum for a better management of the European Union budget. A new Financial Regulation is being discussed and will be adopted soon and that will be the basic line to decide and guide the management for future progress. If we have to have simple rules, if we want to have more efficient, cost-effective systems to manage them through the Member States and within the Commission, that is the moment to address those issues. The budget review is also on the table next year.
So the Commission, the Council, the European Parliament are therefore confronted now with a period for taking serious decisions to improve the situation in the future. If the European Court of Auditors can assist in that, I would suggest it should be by building on the recommendations that we have already put forward in our opinion on the key risks and challenges for improving the financial management of the Union.
When you look to the new generation of programmes for the period after 2013, I repeat, we have to ask: are the programmes of funding schemes likely to add value to the European Union? Are we putting forward schemes which are simple, with clear objectives, realistic to execute and whose accountability lines are clear? We want to avoid the uncertainty where we are sometimes claiming that there is no responsibility either on the side of the Commission or on the side of the Member States. We have the opportunity now and the Court of Auditors is looking forward to assisting you in this task.
President
The item is closed.
Written statements (Rule 149)
Jean-Pierre Audy
For the first time in 16 years, the European Court of Auditors has issued a positive statement of assurance with regard to both the reliability of the annual accounts and the legality and regularity of the underlying transactions. This is the end of a cycle that began with the Santer Commission, which resigned in 1999. This situation is due to the determination of the European Parliament and of its Committee on Budgetary Control to force the Commission and also the Member States - in matters relating to shared management - to manage European public funds correctly. I welcome the Court's work. I fail to understand why the Union does not enter into its accounts the EUR 37.2 billion that the Member States owe for staff pensions, since it has approximately EUR 44 billion negative own capital as a result. What an image to portray! I wonder how we are going to be able to borrow on the markets to raise the EUR 60 billion needed for the stability plan. Lastly, I believe that this report has come too late. In any serious organisation, the auditor's report should be sent before 30 June in the year following the year audited. The quibbles about the complex issues and the many languages involved are not acceptable.
Zuzana Brzobohatá
The European Court of Auditors is now submitting its sixteenth report, through which it issues the statement of assurance concerning the legality and regularity of the operations on which the annual accounts of the EU budget are based. I would like to stress that the level of error in some operations remains high. For example, the Court of Auditors states that, for projects in the area of cohesion, the level of error is higher than 5%, which, in my opinion, is too high, despite the fact that there has been an improvement in recent years. In my opinion, the European Commission should make every effort to reduce the error level to the maximum acceptable level of 2%. It has to be said, of course, that the error level does not always indicate incorrect handling of delegated resources, but is often down to accounting errors in the administration of individual projects.
Véronique Mathieu
In its annual report on the implementation of the 2009 budget, the Court observes in relation to the reliability of the accounts that some consolidated entities have not provided any statement in relation to their consolidated accounts, or have submitted an amended statement. The European Police College (CEPOL) is one of the entities for which the due information has been lacking for several years. This has important consequences, because, after an in-depth audit of CEPOL's accounts in July 2010, corrections were made to the accounts. Indeed, the 2009 financial report for the agency went back over the accounting management of the financial years 2008 and earlier, estimating the budgetary impact of the corrections at approximately 13% of the agency's current budget. Since the college became a community agency on 1 January 2006, the Court of Auditors has only issued reservations on the reliability of the accounts for the financial year 2007. That has not sufficed to put the accounts prior to 2010 back in order.
