Activities of Luke Ming FLANAGAN related to 2023/2129(DEC)
Shadow reports (1)
REPORT on discharge in respect of the implementation of the general budget of the European Union for the financial year 2022, Section III – Commission and executive agencies
Amendments (25)
Amendment 21 #
Motion for a resolution
Paragraph 5 a (new)
Paragraph 5 a (new)
5 a. Reminds of the importance of a strict application of the financial rules of the EU in all programmes and on all beneficiaries, in order to avoid all forms of fraud, conflict of interests, corruption, double funding and money laundering; in this framework reminds of the key role played by the whole EU anti-fraud architecture and expresses some concerns about the refusal of some member states to cooperate with one of its elements, notably the EPPO;
Amendment 31 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Recalls the importance of carrying out an ex-post evaluation of financial programmes created to respond to a crisis concerning their compliance, effectiveness, efficiency, relevance, coherence and Union added value;
Amendment 32 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6 a. Recalls the importance of the RRF in facing the economic downturn following the COVID-19 pandemic, reminds that the RRF delivery model puts much, lighter requirements on the Commission, and reduces the control burden from the Commission towards the Member States; is concerned that the Court in its assessment of the RRF identified shortcomings in the Commission preliminary assessment and ex posts audits and considers that weaknesses remain in the member states’ reporting and control systems; is worried that such weaknesses have led to the establishment of ‘control milestones’ indicating that the relevant member state systems were not fully functional when the plans started to be implemented, thus posing a risk to the regularity of RRF expenditure and the protection of the EU’s financial interests;
Amendment 51 #
Motion for a resolution
Paragraph 11 a (new)
Paragraph 11 a (new)
11 a. Regrets that again the Court issued an adverse opinion on the legality and regularity of expenditure, and found that the control mechanisms of the Commission and Member States are simply not reliable enough; underlines the importance of reinforcing the control mechanisms of the Commission and Member States which are considered by the Court as not reliable therefore compromising the reliability of the AMPR; remind that the Commission should follow up in details on all Parliament’s observations, including all the political priorities;
Amendment 64 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. WelcomNotes the Court’s conclusion that the revenue is free from material error and that the systems for managing the revenue examined by the Court were generally effective; regrets the adverse opinion on the legality and regularity of the Union budget expenditure issued by the Court for the fourth year in a row;
Amendment 67 #
Motion for a resolution
Paragraph 19
Paragraph 19
19. NotesIs worried that the Court estimates the level of error for the 2022 expenditure to be 4,2 % (3 % in 2021), which is far above the materiality threshold and which represents a net increase in comparison to 2021 when the error rate was 3%; notes the Commission’s confidence that the risk at payment is estimated at 1.9 % for 2022 (similar to 2020, 2021 and 2022), is representative of the level of error at the time of payment; notes that the Commission’s estimation of the risk at closure, after ex-post controls and corrections have been applied, is 0.9 %; notes the divergence between the Court’s overall error rate and the Commission’s risk at payment, which is observed for the overall Union budget expenditure in 2022, although not in all expenditure areas; but particularly evident in heading 1 and 2 as in the past, remarks the fact that the Commission’s estimates for risk at payment are consistently in the lower range or below the statistical estimations of the Court and is concerned that this represents a systematic underestimation of the existing error level by the Commission, which would not be able to effectively protect the financial interests of the union;
Amendment 72 #
Motion for a resolution
Paragraph 19 a (new)
Paragraph 19 a (new)
19 a. Reiterates the concerns about the Court observation that the Commission’s risk assessment is likely to underestimate the level of risk in several areas, revealing again weaknesses in the Commission’s ex-post audits in Heading 1 'Single market, innovation and digital', underestimation of errors in Heading 2 'Cohesion, resilience and values', and underestimations of risk and a high number of errors in Heading 6 'Neighbourhood and the world', among other issues; is also worried by recurrent weaknesses identified by the court on Member Stets’ ex post checks in heading 2, limiting the reliance that can be placed on their work , father questioning the existence of an effective managing control system which is indispensable to ensure the compliance but also the performance of operations;
Amendment 86 #
Motion for a resolution
Paragraph 24
Paragraph 24
24. Considers that both approaches serve different purposes and have their benefits, disadvantages, strengths, and weaknesses, and should be used to complement each other while understanding the differences and particularities, such as the different concepts of error and the risk categorisation used by each institution; commends the Commission’s approach for its sheer size and the resulting granularity in identifying where additional efforts are most beneficial and where improvements are needed;is worried that the great divergence in the rates provided by the Court and the Commission, in relation to the weaknesses identified on the Commission side, may indicate that the Commission is not taking its role in the protection of financial interests seriously considers the Court’s error rate to be an important indicator of compliance with legality and regularity of the implementation of the Union budget; welcomes in this regard the Court’s findings, observations and recommendations as a very useful contribution to the further improvement of the budget management and implementation under different management modes and by all relevant stakeholders;
Amendment 89 #
Motion for a resolution
Paragraph 24 a (new)
Paragraph 24 a (new)
24 a. Reiterates its support for the audit approach and methodology of the Court; invites again the Commission to rethink its methodology and cooperate with the Court with a view to increasing harmonisation and to providing for more comparable figures;
Amendment 97 #
Motion for a resolution
Paragraph 29
Paragraph 29
29. Notes with concern that the total outstanding commitments, which represent future debts if not decommitted, reached an all-time high of EUR 450 billion in 2022, caused by both increased commitments related to NGEU (with all National Recovery and Resilience Plans adopted in 2022) and the start of the implementation of the 2021-2027 programming period; notes that the Commission expects this amount to further increase in 2023, and foresees a decrease from 2024 to 2027 when committed amounts for both NGEU and the 2021- 2027 programming period should be paid out;
Amendment 98 #
Motion for a resolution
Paragraph 29 a (new)
Paragraph 29 a (new)
29 a. Underlines that the Commission projections for the reduction of the outstanding commitments is based on the fundamental assumption, namely that Member States effectively makes more efforts to accelerate the absorption of the 2021-2027 shared management funds and that automatic technical adjustments of payments ceiling are sufficient to cover the payments needs; is worried that these 2 assumptions may not be fulfilled hence creating a very dangerous situation for the EU budget;
Amendment 101 #
Motion for a resolution
Paragraph 33 a (new)
Paragraph 33 a (new)
33 a. Supports the Court recommendation for the Commission to act more proactively to ensure the tools available to mitigate the exposure risks have sufficient capacity;
Amendment 102 #
Motion for a resolution
Paragraph 33 b (new)
Paragraph 33 b (new)
33 b. Notes that in 2022 the Commission has changed the disclosure of contingent liability in its consolidated accounts, making the comparison of year by year extremely complex and long; invites the Commission to report more clearly on its annual account, in order to facilitate conclusions and analysis also in view of the discharge procedure;
Amendment 103 #
Motion for a resolution
Paragraph 34
Paragraph 34
34. Notes that the exposure of the Union budget to Ukraine increased in 2022 to EUR 15,6 billion, with related provisions; notes with concern that for the MFA+ support to Ukraine with a value of EUR 18,0 billion, agreed at the end of 2022 and disbursed throughout 2023, no provisions were required in the CPF to cover the risks of default, posing a serious risk to the EU budget as expressed in the Opinion 07/2022; draws attention that possible losses related to MFA+ will have to be covered by future Union budgets or by the budgetary ‘headroom’ between the MFF ceiling and the own resources ceiling; invites the Commission to provide additional measures to protect the EU budget from future losses related to the MFA+;
Amendment 104 #
Motion for a resolution
Paragraph 34 a (new)
Paragraph 34 a (new)
34 a. Notes that during 2022 consumer price inflation increased significantly, affecting the EU budget in several ways, by reducing the relative size of the EU budget and reducing the efficiency of the EU finds not able to achieve the objectives to the same extent as initially planned; considers that high inflation affects the proportion of revenue from different sources, with a net reduction of teh share of the GNI-based own resources; strongly supports the Court recommendation on the Commission to assess the impact on the EU budget of increasing inflation in order to proactively apply mitigating measures;
Amendment 115 #
Motion for a resolution
Paragraph 36 – point iv
Paragraph 36 – point iv
(iv) continue to support the administrative capacity of Member States’ authorities; also in view of accelerating the use of EU finds, and reducing the level of outstanding commitments;
Amendment 116 #
Motion for a resolution
Paragraph 36 – point v
Paragraph 36 – point v
(v) report as part of its disclosure on contingent liabilities and what the annual exposure of the Union budget is, arising from budgetary guarantees and from financial assistance to third countries, making public its estimate of total annual exposure;
Amendment 117 #
Motion for a resolution
Paragraph 36 – point v a (new)
Paragraph 36 – point v a (new)
(v a) provide sufficient measures to protect the EU budget from the different risks identified in particular the RAL, the increasing debt, the increased budget exposure including to Ukraine, the increasing inflation etc;
Amendment 133 #
Motion for a resolution
Paragraph 54
Paragraph 54
54. Notes that the Court estimates that the level of error in spending on ‘Single Market, Innovation and Digital’ in 2022 was material at 2,7 % ; notes with satisfaction that this is a considerable decrease compared to 4,4 % in 2021; takes note of the Court’s observation that the research and innovation expenditure is most affected by error, particularly in the area of personnel costs; notesis worried that the Commission calculated an error rate of 1,5 % for this heading, which is in the lower half of the range of the Court estimation; is concerned that the Courts observation of the underestimation of the rate by the commission persist since many years in a row, with a specific weakness identified in the Commission’s ex post audits;
Amendment 151 #
Motion for a resolution
Paragraph 71 a (new)
Paragraph 71 a (new)
71 a. Is worried by the Courts persistent comments on the shortcoming identified in the way audit and managing authorities work (notably weaknesses in the ex post checks by the audit authorities and in controls by the managing authorities that do not always effectively prevent or detect irregularities in expenditure declared by beneficiaries) and the over-reliance of the Commission on the quality of programme authorities’ work; related to inherent limitations in the Commission’s desk reviews;
Amendment 220 #
Motion for a resolution
Paragraph 108
Paragraph 108
108. Notes that the Court examined a sample of 23 transactions that is not representative enough of the spending under MFF headings 4 and 5 and, therefore, cannot provide an estimate of the error rate; notesconsidering that the Court’s audit results show that the expenditure is affected by eligibility and procurement issues and that it is a high-risk area (11 out of 23 transactions audited, i.e. 48 %, were affected by errors) invites the Court to provide a clear estimation of the error rate for this chapter; notes that the Court quantified nine errors which had an impact on the amounts charged to the Union budget and that it also found four cases of non-compliance with legal and financial provisions, which had no impact on the Union budget; notes that the Commission concludes that the risk at payment is below 2% for the expenditure on migration and border management, as well as for security and defence;
Amendment 234 #
Motion for a resolution
Paragraph 119
Paragraph 119
119. Notes that the Court examined a sample of 72 transactions which is not representative enough of the spending under this MFF heading and, therefore, cannot provide an estimate of the error rate; notesconsidering that the Court’s audit results show that this is a high-risk area (34 out of 72 transactions audited, i.e. 47 %, were affected by errors) invites the Court to provide a clear estimation of the error rate for this chapter; notes that the Court found 25 errors that had a financial impact on the Union budget, relating to ineligible costs, absence of supporting documents, public procurement and expenditure not incurred;
Amendment 253 #
Motion for a resolution
Paragraph 127 a (new)
Paragraph 127 a (new)
127 a. Expresses deep concern over the recent announcement by some countries of suspension of funding to the UN Relief and Works Agency for Palestine Refugees (UNRWA); calls for increased and sustained funding in recognition of the agency's crucial role in the humanitarian response in Gaza, and to ensure the uninterrupted delivery of vital services to a vulnerable population in the Middle East;
Amendment 298 #
Motion for a resolution
Paragraph 154 a (new)
Paragraph 154 a (new)
154 a. Is worried that in its audit work the Court also identified weaknesses in Member States' reporting and control systems, leading the Commission to set up additional conditions for payments (control milestones); notes limitations in the Commission preliminary assessments and ex posts audits and problems with the reliability of the information provided in the management declarations by Member States, casting doubts on the possibility to relay on them when assessing milestones and targets before making payments;
Amendment 312 #
Motion for a resolution
Paragraph 159
Paragraph 159
159. Notes that the Commission verified the adequacy of the control systems of Member States as a precondition for the positive assessment of the RRPs and, in some cases, specific M&Tsadditional specific reforms and milestones (so called ‘control milestones) on audit and control were added in the RRPs to ensure the full adequacy of the systems to protect the financial interests of the Union and to address the weaknesses identified in 16 member States reporting and control systems; support the Court evaluation that the fact control milestones were introduced means that Member states systems were not fully functional when the plans started to be implemented posing a serious risk to the regularity of the of the RRF expenditure and the to protection of financial interests; notes that the satisfactory fulfilment of audit and control M&Ts was, in turn, a precondition for the first payments and welcomes that the Court did not raise any issues related to their satisfactory fulfilment assessed during 2022; notes that afterwards, the Commission performed 16 system audits in 2022 and 11 in 2023, so all Member States’ control systems will have been audited at least once by the end of 2023;