Progress: Procedure completed
Role | Committee | Rapporteur | Shadows |
---|---|---|---|
Lead | CONT | HOHLMEIER Monika ( EPP) | NEGRESCU Victor ( S&D), WIEZIK Michal ( Renew), KUHS Joachim ( ID), FLANAGAN Luke Ming ( GUE/NGL) |
Committee Opinion | AGRI | FLANAGAN Luke Ming ( GUE/NGL) | Peter JAHR ( PPE), Atidzhe ALIEVA-VELI ( RE) |
Lead committee dossier:
Legal Basis:
RoP 54
Legal Basis:
RoP 54Events
The Committee on Budgetary Control adopted a report by Monika HOHLMEIER (EPP, DE) on possibilities to increase the reliability of audits and controls by national authorities in shared management.
Root causes affecting the management, control and audit of EU expenditure under shared management
The report points out that the complexity of the rules governing EU funds, combined with frequent changes to regulations between programming periods, can lead to problems of legal ambiguity or compliance, as well as misinterpretation and gaps in implementation, resulting in a higher risk of error. Members deplore the fact that the Commission's guidelines are often highly technocratic and open to differing interpretations . This can lead to over-regulation, increased red tape and ongoing changes to implementation standards by Member States.
Members also pointed out that, under shared management, Member States are responsible for setting up a system for managing and control of payments, and for ensuring that it is capable of detecting and correcting irregularities. They stress that it is advantageous for Member States to opt for preventive rather than punitive measures for management and control purposes, to ensure that the system is managed as efficiently as possible in the interests of the right recipients, while preventing fraud and misallocation of public funds.
The report stresses that effective management control is essential to guarantee both the performance of operations and their compliance with the legal framework. In addition to protecting the Union's financial interests, the detection of errors must be used to implement the necessary corrective measures and to make improvements to legislation in order to prevent such errors in the future.
Members insist that Member States' audit bodies must comply with the international standards of supreme audit institutions. Non-compliance with these standards creates a risk of undermining the reliability and quality of audit work, and also poses a threat to the single audit approach.
The report also deplores the fact that the lack of sufficient resources , including the lack of training of the workforce dedicated to control functions, is a factor affecting the ability of managing authorities (under cohesion policy) and paying agencies (under the CAP) to carry out effective checks and verifications of expenditure. It also stresses that the independence of audit bodies and other bodies managing funds in the Member States is an essential requirement for the reliability and quality of audit results.
Members reiterate their concern about the difference between the error calculation method applied by the Court of Auditors and that applied by the Commission, which creates confusion and makes it difficult to address the root causes of errors. These discrepancies are present in cohesion expenditure, one of the largest parts of the Union's budget, for the fourth year running. A relevant and reliable estimate of the error rate in cohesion spending is therefore a key element in the Commission's disclosure and control of the compliance of spending in this policy area with legislation.
Recommendations on possible ways to increase the reliability of audits and controls under shared management
The Commission is invited, inter alia , to:
- contribute to improving the common understanding of the single audit approach in order to achieve a more uniform interpretation and implementation of this model across Member States;
- continue to simplify the rules and requirements applicable to EU funds and programmes, while ensuring a balance with the necessary audits and controls and continuity between programming periods, as well as providing the competent authorities in the Member States with further clarification on their implementation;
- continue to identify ways of helping Member States to transpose directives, issue guidelines and implement EU funds;
- reduce over-regulation , and closely monitor delayed, fragmented or incomplete implementation or transposition of EU legislation;
- strengthen cooperation with Member States, in particular to avoid problems of incorrect translation which could hinder the uniform interpretation of Union law, and to avoid imposing an additional administrative burden on national authorities when interpreting and applying the relevant provisions;
- encourage and facilitate the exchange of best practice between Member States and their audit and control authorities in terms of implementation and audit methods;
- develop support mechanisms for local authorities in need;
- proactively promote good communication and the exchange of good audit practice between Member State audit authorities at European, national and regional levels;
- reduce the CAP administrative burden on farmers, which is often at the root of unintentional errors, which should be clearly distinguished from cases of intentional fraud, thus ensuring more efficient use of CAP funds;
- promote the use of satellite images and new imaging technologies to monitor the CAP.
Members considered that digitalisation and the adoption of more sophisticated IT tools at national and EU levels would improve the management, control and auditing of EU funds, and could contribute to preventing irregularities, increasing the quality of checks and audits, and substantially reducing bureaucracy, assuming interoperability of IT tools between Member States and the Commission.
Documents
- Text adopted by Parliament, single reading: T9-0404/2023
- Decision by Parliament: T9-0404/2023
- Committee report tabled for plenary: A9-0297/2023
- Amendments tabled in committee: PE752.911
- Committee draft report: PE731.616
- Committee opinion: PE731.787
- Committee opinion: PE731.787
- Committee draft report: PE731.616
- Amendments tabled in committee: PE752.911
- Text adopted by Parliament, single reading: T9-0404/2023
Votes
Possibilities to increase the reliability of audits and controls by national authorities in shared management – A9-0297/2023 – Monika Hohlmeier – Motion for a resolution #
Amendments | Dossier |
115 |
2022/2020(INI)
2022/06/16
AGRI
66 amendments...
Amendment 1 #
Draft opinion Recital A a (new) Aa. having regard to the Financial Regulation applicable to the general budget of the Union of 18 July 20181a, and to the proposal for its revision1b; __________________ 1a OJ-L 193/30.07.2018, p. 1 1b COM(2022) 223 final - Proposal for Regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (recast)
Amendment 10 #
Draft opinion Paragraph 2 2. Recalls that under shared management, Member States are responsible for setting up a management and control system for payments and must ensure that it is capable of detecting and correcting irregularities; stresses that a distinction must be made between deliberate fraud and unintentional error; stresses the importance of continuing legal certainty regarding payments to beneficiaries who have acted in good faith;
Amendment 11 #
Draft opinion Paragraph 2 2. Recalls that under shared management, Member States are responsible for setting up a management and control system for payments and must ensure that it is capable of detecting and correcting irregularities; stresses that a distinction
Amendment 12 #
Draft opinion Paragraph 2 a (new) 2a. Insists that, for the reputation of the CAP, the standard of control systems must be robust and fully compliant with its new Common Agricultural Policy regulations in order to secure the proper implementation, in particular, of the new delivery model from 1 January 2023, and encourages the exchange of best practices to ensure this across all Member States;
Amendment 13 #
Draft opinion Paragraph 2 a (new) 2a. Stresses that the new Common Agricultural Policy should simplify matters for farmers; points out that, in view of concerns caused by administrative burdens under joint management, the CAP Strategic Plans should specifically seek to simplify matters for the final beneficiaries;
Amendment 14 #
Draft opinion Paragraph 2 a (new) Amendment 15 #
Draft opinion Paragraph 2 a (new) 2a. Points out the importance of information and awareness campaigns for the reduction of unintentional errors; calls on the Member States to organise such campaigns timely and involve all relevant stakeholders.
Amendment 16 #
Draft opinion Paragraph 2 b (new) 2b. Welcomes in this regard the provision established in the Regulation (EU) No 2021/2116 that give the CAP beneficiaries possibility to retroactively correct errors in their aid application that were done in good faith and similarly welcomes the early awareness mechanism that points out to CAP beneficiaries minor non-compliance without deducting any payments at first.
Amendment 17 #
Draft opinion Paragraph 2 b (new) 2b. Calls on the Commission, when assessing the CAP Strategic Plans, to focus in particular on the extent to which they simplify matters and reduce administrative burdens for the final beneficiaries;
Amendment 18 #
Draft opinion Paragraph 2 c (new) 2c. Stresses the simplifications and streamlining on the penalties for non- compliance that make a clear distinction between cases of intentional and non- intentional non-compliance and sets the penalties at lower level for the latter.
Amendment 19 #
Draft opinion Paragraph 3 3. Notes that Member States execute payments to CAP beneficiaries through accredited paying agencies (PAs), which perform on-the-spot checks to ensure the eligibility of applications and the correct execution of payments
Amendment 2 #
Draft opinion Recital B a (new) Ba. having regard to Regulation (EU) No 2021/2116 on the financing, management and monitoring (FMM) of the common agricultural policy (CAP);
Amendment 20 #
Draft opinion Paragraph 3 3. Notes that Member States execute payments of Union’s funds, co-financed with national funds in the case of second pillar rural development payments, to CAP beneficiaries through accredited paying agencies (PAs), which perform on- the-spot checks to ensure the eligibility of applications and the correct execution of payments;
Amendment 21 #
Draft opinion Paragraph 3 a (new) Amendment 22 #
Draft opinion Paragraph 3 b (new) 3b. Welcomes the Commission’s proposals on IT use in the proposal for revision of the Financial Regulation3a particularly to include use of electronic systems and digital controls to ensure adequate audit trails; __________________ 3a COM(2022) 223 final, point (d) of Articles 36(2) and point (a) of Article 63 (4)
Amendment 23 #
Draft opinion Paragraph 4 4. Notes the role of certification bodies (CBs) appointed as independent audit bodies by Member States; observes that CBs provide an opinion on the proper functioning of PAs’ management and control systems, and since 2015; notes the relative dominance of the same few large international corporate audit companies in fulfilling this role for different Member States.
Amendment 24 #
Draft opinion Paragraph 4 4. Notes the major role of certification bodies (CBs) appointed as independent audit bodies by Member States with an essentially risk-based approach; observes that CBs provide an opinion on the proper functioning of PAs’ management and control systems, and since 2015;
Amendment 25 #
Draft opinion Paragraph 4 4. Notes the role of certification bodies (CBs) appointed as independent audit bodies by Member States; observes that
Amendment 26 #
Draft opinion Paragraph 4 a (new) 4a. Recalls that the Commission plays a supervisory role, ensuring that the arrangements governing the management and control system are compliant by, among others, verifying the effective functioning of this system and making financial corrections, where necessary.
Amendment 27 #
Draft opinion Paragraph 4 a (new) 4a. Recalls that, from 1 January 2023, certification bodies must establish if Member States governance systems function properly, and whether expenditure is eligible according to the Financial Regulation4a; __________________ 4a Regulation (EU, Euratom) No 2021/2116 and in particular its Article 37
Amendment 28 #
Draft opinion Paragraph 4 a (new) 4a. Notes also the role the Commission external audit services in DG AGRI and the European Court of Auditors, carrying out control functions in the interest of the Union, evaluating risk to the CAP funds EAGF and EAFRD.
Amendment 29 #
Draft opinion Paragraph 5 5. Recalls that the main objective of th
Amendment 3 #
Draft opinion Recital C a (new) Ca. having regard to the Annual Activity Report 2021 by the Directorate General for Agriculture and Rural Development of the European Commission;
Amendment 30 #
Draft opinion Paragraph 5 5. Recalls that the main objective of this assurance model is to ensure that the remaining level of risk to the budget is below the materiality threshold of 2%;
Amendment 31 #
Draft opinion Paragraph 5 5. Recalls that the main objective of this assurance model is to ensure that the remaining risk to the budget is below the materiality threshold of 2
Amendment 32 #
Draft opinion Paragraph 5 5. Recalls that the main objective of this assurance model is to ensure that the remaining level of risk to the budget is below the materiality threshold of 2%; recognises and highlights the low error rates for the European Agricultural Guarantee Fund and the continuous decrease in error rates for the European Agricultural Fund for Rural Development over the past financial years;
Amendment 33 #
Draft opinion Paragraph 5 a (new) 5a. Understands the lower error rates for simpler payment schemes with relatively fewer deliverables, conditionalities or inherent complexity; notes that providing certain public goods such as CLLD (community-led local development), agri-environmental protection and building biodiversity are by their very nature more complex, so that their control is also more complex, with more errors possible; recalls that despite this, decades of Eurobarometer results in favour of climate, environment- and nature-friendly farming and bottom-up approaches show a consistently overwhelming public support from citizens for such schemes and their final deliverables in terms of public goods; insists that their marginally higher error rate should not discourage Member States from making them available to farmers and rural communities.
Amendment 34 #
Draft opinion Paragraph 5 a (new) 5a. Stresses that the rate of error can also be an indicator of the complexity of policies, identifying those areas in which further simplification is most needed; recommends, therefore, that the audit reports continue to give a clear breakdown of error rates for each pillar and, where appropriate, for each initiative, such as the eco-schemes, so as to ensure ongoing clarity about where further simplification is needed;
Amendment 35 #
Draft opinion Paragraph 6 6. Approves of most of the simplifications introduced in the CAP for 2023-27, facilitating management by national authorities alongside their responsibilities for audit and control; notes the simplification coming with the New Delivery Model that has deleted the control rate for eligibility of CAP basic payments (formerly 5% of beneficiaries) to rates determined by the Member States based on error and risk; 6a. Notes in this regard the role of the new Area Monitoring System outlined in the FMM CAP regulation, using Copernicus satellite cluster data and monitoring, to supplement the existing area-based controls by physical on-the- spot inspections and remote sensing used up until now; 6b. Understands that this extension of coverage of farmed land, particularly useful to monitor active farming, justifies the reduction in the basic control rate. Sees the special usefulness in using Copernicus data as new techniques in controlling conditionality and land use relevant for Eco-schemes and AECMs, as well as gathering and correcting for data used for the indicators of the performance of the new CAP (annex I SPR); e.g. crop rotation, EFA, not ploughing Natura2000 sites, protecting high-carbon soils, wetlands and peatlands, etc.;
Amendment 36 #
Draft opinion Paragraph 6 6. Approves of the simplifications introduced in the CAP for 2023-27, facilitating management by national authorities alongside their responsibilities for audit and control; recalls the addition of the ‘right to error’ for farmers and urges the Member States to implement this provision under the new national strategic plans;
Amendment 37 #
Draft opinion Paragraph 6 6.
Amendment 38 #
Draft opinion Paragraph 6 6. Approves of the simplifications introduced in the CAP for 2023-27, facilitating management by national authorities alongside their responsibilities for audit and control which must be carried out effectively to ensure errors and irregularities do not increase under this simplification;
Amendment 39 #
Draft opinion Paragraph 6 6.
Amendment 4 #
Draft opinion Paragraph 1 a (new) 1a. Calls on the Commission to place greater emphasis on administrative and technical assistance in the direct management of around 0.8% of the CAP budget;
Amendment 40 #
Draft opinion Paragraph 6 a (new) Amendment 41 #
Draft opinion Paragraph 6 a (new) 6a. Calls on the Member States to do their utmost to guarantee sound financial management, further reduction of errors and to avoid any delays in the implementation of CAP;
Amendment 42 #
Draft opinion Paragraph 6 b (new) Amendment 43 #
Draft opinion Paragraph 6 c (new) 6c. Notes the continued responsibility of the Commission to intervene if serious deficiencies are found in a member state control system, as outlined in the new FMM regulation;
Amendment 44 #
Draft opinion Paragraph 7 7. Supports the use of simplified cost options to allow authorities to calculate eligible expenditures of grants on the basis of flat rate financing to reduce complexity, ensuring that farmers are not out of pocket for payments compensating “costs incurred and income forgone”, e.g. Natura 2000, groundwater protection zones under the water framework directive, or other second pillar payments linked to statutory obligations; notes that ensuring high and at least remunerative payments for public goods provided by protection of such areas will, if applied correctly by the member states and the Commission, go far to diffuse tensions and resentment of some farmers against protection obligations;
Amendment 45 #
Draft opinion Paragraph 7 a (new) 7a. Reiterates the need to better balance the further simplification of rules and procedures with better controls over the most repeated areas of irregular spending, develop training sessions and practical information for applicants, in particular new applicants, and improve the assistance and guidelines for SMEs;
Amendment 46 #
Draft opinion Paragraph 7 a (new) 7a. Acknowledges that the strategies of fraudsters are constantly evolving to evade detection; underlines, therefore, the importance of regular analysis of the effectiveness of measures taken to combat fraud in order to ensure consistently high standards and effectiveness;
Amendment 47 #
Draft opinion Paragraph 7 b (new) 7b. Encourages Member States to evaluate regularly their audit practices and internal control systems for EU funds under shared management to ensure that they are reliable and function effectively in preventing, detecting and correcting irregularities, including new forms of irregular practises;
Amendment 48 #
Draft opinion Paragraph 8 8. Believes that digitalisation and the adoption of more sophisticated IT tools could improve the efficiency of the assurance process, as well as the use of the IACS to support the data monitoring needed to measure performance of the CAP via the indicators in annex I of the SPR; recalls that the performance approach was put forward in response to the clear and sustained wish of EU citizens to have a sustainable, fair and performing CAP; supports the extension of the use of the risk-scoring tool Arachne.
Amendment 49 #
Draft opinion Paragraph 8 8. Believes that digitalisation and the
Amendment 5 #
Draft opinion Paragraph 1 a (new) 1a. Recalls that, from 1st January 2023, the budget of the CAP implemented under shared management will be subject to the provisions of Regulation (EU) No 2021/2116 on the financing, management and monitoring (FMM) of the common agricultural policy;
Amendment 50 #
Draft opinion Paragraph 8 8. Believes that digitalisation and the adoption of more sophisticated IT tools c
Amendment 51 #
Draft opinion Paragraph 8 8. Believes that digitalisation and the adoption of more sophisticated and, at the same time, readily accessible IT tools could improve the efficiency of the assurance process; supports the extension of the use of the risk-scoring tool Arachne
Amendment 52 #
Draft opinion Paragraph 8 a (new) 8a. Supports the extension of the use of the data mining risk-scoring tools such as Arachne to help track beneficial owners, holding companies and oligarchs.
Amendment 53 #
Draft opinion Paragraph 8 a (new) Amendment 54 #
Draft opinion Paragraph 8 a (new) 8a. Underlines that the digitalization offers various opportunities when it comes to the management and control of Union’s policies and programmes and in particular in conducting audits; calls on the Member States, the Commission and all relevant authorities to take advantage of new IT tools and techniques to increase the reliability of audits and controls.
Amendment 55 #
Draft opinion Paragraph 8 a (new) 8a. Calls for increased action and sustained pressure on conflicts of interest and preventing the appropriation by oligarchs of public funds, in the interest of protecting EU taxpayers' money and to improve the reputation of the CAP, which may help it resist future demands for budget cuts.
Amendment 56 #
Draft opinion Paragraph 8 a (new) 8a. Acknowledges that the Commission proposed to make the use of a single data-mining and risk-scoring tool mandatory for funds under shared management and RRF; notes that this has not been retained in the adopted texts due to resistance in the Council.
Amendment 57 #
Draft opinion Paragraph 8 a (new) 8a. Stresses the importance of the correct implementation by the European Court of Auditors of the protection of the financial interest of the Union measures outlined in Regulation on control and penalties6a; __________________ 6a Title IV Chapter I
Amendment 58 #
Draft opinion Paragraph 8 b (new) 8b. Notes that conditionality is made up firstly of existing Union’s laws, applicable to all citizens, but filtered for relevance to on-farm operations and environmental, phyto-sanitary and animal welfare risk, and secondly of good farming practices; notes the continued control rate of only one out of each hundred beneficiaries for conditionality, and the minimal levels of sanctions, and the relatively low sanctioning rate; expresses surprise that the new delegated acts following the FMM regulation give more lenient sanctioning rates than was agreed by co-legislators in the long and painful CAP reform process, and further expresses concern that in an already very flexible system with early warning letters and zero percentage sanctions, the deterrent effect is being further eroded.
Amendment 59 #
Draft opinion Paragraph 8 b (new) 8b. Considers that the new delivery model under the FMM regulation must not hamper the European Court of Auditors in its task of assessing effectiveness, efficiency and economy of expenditure of EU funds under the new arrangements for the Common Agricultural Policy; seeks reassurance that the documentation required by point (c) of Article 9(3) of the same Regulation will be sufficient for the Court of Auditors to be able to verify cases of non- compliance with eligibility criteria for individual beneficiaries as per its Article 55;
Amendment 6 #
Draft opinion Paragraph 1 b (new) 1b. Recalls that the effectiveness and good reputation of the CAP depends on correct and efficient use of funds, for which audit and control are basic tools, and that the Commission’s audit role remains essential in assessing use of funds and contributing to the budget discharge process with the European Court of Auditors;
Amendment 60 #
Draft opinion Paragraph 8 b (new) 8b. Underlines strong and repeated requests to the Commission to ensure the protection of the Union budget by making global and systematic use of digital and automated systems for reporting, monitoring and audit; remarks that this should include the establishment of a mandatory digital interoperable database containing information on beneficiaries and their beneficial owners of funds from all Union programmes building on but not limited to existing tools, such as ARACHNE, EDES and national databases;
Amendment 61 #
Draft opinion Paragraph 8 b (new) 8b. Invites the EPPO, OLAF, the Commission, ECA and the Member States to strengthen their cooperation, including by, for example, creating more training programmes on the use of e-tools and audit practices, as well as on how to improve them.
Amendment 62 #
Draft opinion Paragraph 8 c (new) 8c. Welcomes the Commission’s explanations in its 2021 Annual Activity Report on action taken regarding conflicts of interest, particularly to ensure correct implementation in shared management by Member States authorities; welcomes likewise the adoption in 2021 and the dissemination of the Guidance on the avoidance and management of conflicts of interest under the Financial Regulation as a further measure for improvements in the way funds are administered and controlled;
Amendment 63 #
Draft opinion Paragraph 8 c (new) 8c. Encourages Member States, which have not joined the EPPO yet, to do so to ensure that more cases of fraud are investigated and prosecuted.
Amendment 64 #
Draft opinion Paragraph 8 d (new) 8d. Welcomes the Commission’s “EU Budget Focused on Results” strategy aimed at to improve efficiency of spending and achieve more with the available resources.
Amendment 65 #
Draft opinion Paragraph 8 e (new) 8e. Calls on the Commission to continue its efforts in the field of simplification of EU funding, especially with regard to reducing the burden of implementation and management of EU- funded projects;
Amendment 66 #
Draft opinion Paragraph 8 f (new) 8f. Reiterates that the creation of an integrated, interoperable and harmonised system to collect, monitor and analyse information about final beneficiaries in all Member States can help to further enhance the protection of Union finances and enable even closer scrutiny;
Amendment 7 #
Draft opinion Paragraph 2 2. Recalls that under shared management, Member States are responsible for setting up a management and control system for payments and must ensure that it is capable of detecting and correcting irregularities; stresses the need for the Member States to opt for preventive rather than punitive measures for the purposes of management and control, thereby helping to ensure that the system is administered as efficiently as possible for the benefit of recipients; stresses that a distinction must be made between deliberate fraud and unintentional error;
Amendment 8 #
Draft opinion Paragraph 2 2. Recalls that under shared management, Member States are responsible for setting up a management and control system for payments and must ensure that it is capable of detecting and correcting irregularities; stresses that a distinction must be made between deliberate fraud and unintentional error; maintains that it is necessary to reduce the administrative burden for farmers in order to ensure the more efficient deployment of CAP funds and measures to achieve its objectives;
Amendment 9 #
Draft opinion Paragraph 2 2. Recalls that under shared management, Member States are responsible for setting up a management and control system for payments and must ensure that it is capable of detecting and correcting irregularities; stresses that a distinction must be made between deliberate fraud and unintentional error, and suggests that Member States consider using an ad-hoc register where serious, intentional and repeated problems are identified;
source: 734.079
2023/09/11
CONT
49 amendments...
Amendment 1 #
Motion for a resolution Recital B B. whereas Article 1277 of the Financial Regulation defines the concept of ‘cross-reliance on audits’ for all interventions financed by EU funds; highlights that this article sets out a basis for auditors to rely on previous audit work when this has been conducted in compliance with the EU rules, applicable international standards and by an independent auditor; without prejudice to existing possibilities for carrying out further audits; underlines, that the Single Audit principle aims to prevent a duplication of audit work, reducing the overall costs of audit activities and decreasing the administrative burden on auditees; but reminds that in shared management the Commission should rely on the audit work provided by Member States’ auditors only if their audit work is reliable and robust; _________________ 7 Article 127: ‘Cross-reliance on audits.
Amendment 10 #
Motion for a resolution Paragraph 3 3. Recalls the observations of the discharge authority as regards the implementation of the Recovery and Resilience Facility and the involvement of regional and local authorities and other stakeholders who were not sufficiently involved in the setting-up of national programmes;
Amendment 11 #
Motion for a resolution Paragraph 4 4. Points out that errors and irregularities should be avoided, detected and corrected by the managing authorities in the first instance; recalls that the European Court of Auditors (ECA) found that controls currently in place do not yet sufficiently offset the high inherent risk of error in the implementation of the cohesion policy9
Amendment 12 #
Motion for a resolution Paragraph 4 4. Points out that errors and irregularities should be detected and corrected by the managing authorities and paying agencies in the first instance; recalls that the European Court of Auditors (ECA) found that in the implementation of the cohesion policy9
Amendment 13 #
Motion for a resolution Paragraph 4 a (new) 4a. Notes the Court’s observations from past annual reports that in several cases examined by the Court the national authorities had sufficient information to prevent, or to detect and correct, the error before declaring the expenditure to the Commission, and if they had made proper use of all the information at their disposal, the estimated level of error would have been a few percentage point lower; calls on Member States to be more vigilant and use better the available information in order to avoid declaring expenditures containing errors and thus increase reliability of their control and audit work;
Amendment 14 #
Motion for a resolution Paragraph 5 5. Insists that the audit bodies in Member States have to comply with internationally accepted standards on audits; states that failing to comply with them might undermine the reliability and quality of the audit work and thus pose a threat to the Single Audit approach; notes, in this regard, that the ECA hasrepeatedly identified shortcomings in the scope, quality, documentation and reporting of certain national audit authorities’ work10 ; considers that the weaknesses found in the work of several audit authorities covered by the ECA’s sample currently limit the reliance that can be placed on that work; stresses the importance for Member States to have a basic framework with clear and detailed responsibilities for ensuring the quality of audits, in order to avoid misinterpretation of EU rules; insists that if the audit authorities
Amendment 15 #
Motion for a resolution Paragraph 5 5. Insists that the audit bodies in Member States have to comply with internationally accepted standards on audits; states that failing to comply with them might undermine the reliability and quality of the audit work and thus pose a threat to the Single Audit approach; notes, in this regard, that the ECA has repeatedly identified shortcomings in the scope, quality, documentation and reporting of certain national audit authorities’ work10
Amendment 16 #
Motion for a resolution Paragraph 5 5. Insists that the audit bodies in Member States have to comply with internationally accepted standards on audits; states that failing to comply with them might undermine the reliability and quality of the audit work and thus pose a threat to the Single Audit approach; notes, in this regard, that the ECA hasrepeatedly identified shortcomings in the scope, quality, documentation and reporting of certain national audit authorities’ work10 ; considers that the weaknesses found in the work of several audit authorities covered by the ECA’s sample currently limit the reliance that can be placed on that work; stresses the importance for Member States to have a basic framework with clear and detailed responsibilities for ensuring the quality of audits, in order to avoid misinterpretation of EU rules; insists that if the audit authorities are working in an effective, independent and transparent way and deploying international standards, double audits should be avoided to reduce the bureaucratic burden and to make efficient use of audit capacities; _________________ 10 Annual report on the implementation of
Amendment 17 #
6. Stresses that in order to carry out verifications and
Amendment 18 #
Motion for a resolution Paragraph 6 6. Stresses that in order to carry out verifications and audits of programmes financed with EU funds, it is essential to have competent human resources with adequate training, experience and institutional memory at different levels; regrets that, according to the feedback from a survey and interviews carried out for the aforementioned study on the Single Audit approach, the lack of sufficient resources, including capacity training dedicated to control functions, is a factor affecting the capacity of the managing authorities (in cohesion policy) and the paying agencies (in the common agricultural policy) to carry out effective and thorough checks and verifications of expenditure11
Amendment 19 #
Motion for a resolution Paragraph 7 7. Underlines that having ethical and independent audit bodies and other bodies managing funds in Member States
Amendment 2 #
Motion for a resolution Recital D a (new) Da. whereas according to the Article 59 on the financing, management and monitoring of the common agricultural policy, the Member States shall take measures necessary to ensure effective protection of the financial interests of the Union and take actions necessary to ensure the proper functioning of their management and control systems and the legality and regularity of expenditure declared to the Commission;
Amendment 20 #
Motion for a resolution Paragraph 7 7. Underlines that independent audit bodies and other bodies managing funds in Member States are a key requirement for the reliability and quality of the audit results; recalls with concern that in some Member States, state bodies with supervisory functions have seen arbitrary appointments leading to questions with regard to their impartiality in detecting and reporting corruption; highlights that deficient independent oversight mechanisms and illegal interconnections between political and oligarchical structures in the economic and societal spheres are conducive to corruption12
Amendment 21 #
Motion for a resolution Paragraph 7 a (new) 7a. Underlines that concerns over the transparency and independence of the audit bodies are not acceptable and that Single Audit approach can only be applied when all of these factors are in place: clear separation of powers between programme competent authorities; no pressure whisper is made possible; complete and unlimited oversight of the audit work;
Amendment 22 #
Motion for a resolution Paragraph 8 8. Reiterates its concern regarding the difference between the ECA’s and the Commission’s method for calculating errors, which creates confusion and
Amendment 23 #
Motion for a resolution Paragraph 8 8. Reiterates its concern regarding the difference between the ECA’s and the Commission’s method for calculating errors, which creates confusion and reduces the sense of urgency needed to tackle the root causes of errors; highlights that these divergences do not occur in all areas of expenditure; but was particularly evident in 2021 financial year for the heading 1 “Single Market” where the Commission risk at payment was below the ECA’s range for error but also in heading 2 covering Cohesion where the Commission’s estimate is in the lower half of ECA’s range; reminds that ECA has reported in ex posts checks affecting risk at payments and in particular these weakness concerned ex post audits by the Commission’s Common Audit Service (in “Single Market”) and checks by Members States’ audit Authorities (for “Cohesion”)13a Annual report on the implementation of the EU budget for the 2021 financial year, p. 41 emphasises that adequate audit coverage is needed for a statistical representative sample that reflects the high degree of confidence needed for audit work to lead to reliable conclusions; calls on the Commission to improve its methodology and cooperate with the ECA with a view to increasing harmonisation in order to provide more comparable figures and to
Amendment 24 #
Motion for a resolution Paragraph 8 8. Reiterates its concern regarding the difference between the ECA’s and the Commission’s method for calculating errors, which creates confusion and reduces the sense of urgency needed to tackle the root causes of errors; highlights that these divergences do not occur in all areas of expenditure
Amendment 25 #
Motion for a resolution Paragraph 8 a (new) 8a. Calls on the Commission to contribute to improve the common understanding of the Single Audit approach in order to achieve a more uniform interpretation and implementation of this model across the Member States;
Amendment 26 #
Motion for a resolution Paragraph 8 b (new) 8b. Asks the Commission to continue simplifying rules and requirements applying to EU funds and programmes, while ensuring a balance with the necessary audits and controls and continuity between programming periods, as well as providing further clarification on their implementation to Member States competent bodies; encourages Member States to use Simplified Cost Options (SCOs) to address the complexity of EU rules and reduce the error rate while focusing on the achievement of policy objectives;
Amendment 27 #
Motion for a resolution Paragraph 9 9. Calls on the Commission to continue to identify ways to assist Member States in transposing directives, issuing guidelines and implementing EU funds, taking into account the interaction between EU rules and national legislation; recalls, in this context, the importance of conducting rigorous impact assessments, evaluations and fitness checks to assess whether EU legislation and spending programmes are fit for purpose; emphasises the need for the Commission to address the regulatory overlaps, inconsistencies and shortcomings identified during the fitness checks promptly, taking the experiences at national and/or regional level into account and to take appropriate measures to ensure the effectiveness, relevance and coherence of EU programmes
Amendment 28 #
Motion for a resolution Paragraph 9 a (new) 9a. Reiterates that the detection of irregularities and errors shall led to the implementation of corrective measures, the production of guidance for managing authorities and to improve the EU legislation in order to prevent such errors in the future;
Amendment 29 #
Motion for a resolution Paragraph 9 a (new) 9a. Invites the Commission to encourage the exchange of best practices among Member States in term of implementing and auditing methodologies
Amendment 3 #
Motion for a resolution Subheading 1 b (new) Shared management and Single Audit approach
Amendment 30 #
Motion for a resolution Paragraph 10 10. Calls on the Commission to reduce gold-plating on one side, and the delayed, fragmented or incomplete implementation or transposition of European legislation on the other, as this disrupts harmonisation and leads to distortions in the EU, with contradictory standards applied in the spending of European funds; stresses that the simplification should be a guiding principle not only in the Cohesion policy and CAP, but also in other applicable rules such as public procurement, state aid, taxation and sector-specific provisions;
Amendment 31 #
Motion for a resolution Paragraph 10 10. Calls on the Commission and Member States to reduce gold-plating on one side, and to closely monitor the delayed, fragmented or incomplete implementation or transposition of European legislation on the other, as this disrupts harmonisation and leads to distortions in the EU, with contradictory standards applied in the spending of European funds;
Amendment 32 #
Motion for a resolution Paragraph 10 10. Calls on the Commission and the Member States to reduce gold-plating on one side, and the delayed, fragmented or incomplete implementation or transposition of European legislation on the other, as this disrupts harmonisation and leads to distortions in the EU, with contradictory standards applied in the spending of European funds;
Amendment 33 #
Motion for a resolution Paragraph 11 11. Criticises the fact that more and more legislative proposals lack a thorough impact assessment with the involvement of all of the various stakeholders and with a clear financial and budgetary analysis; calls on the Commission to attach greater importance to the quality of legislative work and to take a realistic approach to the administrative, financial and budgetary consequences; urges the Commission to be quicker to set up and launch tendering procedures with a view to developing impact assessments for independent operators;
Amendment 34 #
Motion for a resolution Paragraph 12 12. Calls on the Commission to enhance cooperation with the Member States, in particular, on avoiding mistranslation issues that may hinder the uniform interpretation of EU law as well as impose a further administrative burden on national authorities when interpreting and applying the relevant provisions, so that they are not compelled to resort to versions existing in other official languages13 ; stresses that the Commission should ensure a horizontal application of audit standards in all Member States in order to avoid different levels of scrutiny and application; suggests
Amendment 35 #
Motion for a resolution Paragraph 12 12. Calls on the Commission to enhance cooperation with the Member States, in particular, on avoiding mistranslation issues that may hinder the uniform interpretation of EU law as well as impose a further administrative burden on national authorities when interpreting and applying the relevant provisions, so that
Amendment 36 #
Motion for a resolution Paragraph 12 a (new) 12a. Calls on the Commission to encourage and facilitate exchange of good practices among Member States and their audit and control authorities in order to improve their performance; calls further on the Commission and the Member States to implement the Court’s recommendations related to shortcomings in the audit and control practices and to report to the discharge authority;
Amendment 37 #
Motion for a resolution Paragraph 13 13. Calls on the Commission and the Member States, when implementing EU programmes, always to take account of the needs and experience of the regional and local authorities that are involved in the implementation of the funds, both as regards their administrative capacity and the suitability of the operational and audit procedures that they have to implement; underlines that further capacity building such as training, peer-to-peer reviews and exchange of knowledge and audit practices between audit bodies from different Member States would further enhance technical capacity of the national authorities’ staff;
Amendment 38 #
Motion for a resolution Paragraph 13 13. Calls on the Commission and the Member States, when implementing EU programmes, always to take account of the needs and experience of the regional and local authorities that are involved in the implementation of the funds, both as regards their administrative capacity and the suitability of the operational and audit procedures that they have to implement; in this connection, urges the Commission to develop support mechanisms for local authorities that need it;
Amendment 39 #
Motion for a resolution Paragraph 13 13. Calls on the Commission and the Member States, when implementing EU programmes, always to take account of the needs and experience of the regional and local authorities and communities that are involved in the implementation of the funds, both as regards their administrative capacity and the suitability of the operational and audit procedures that they have to implement;
Amendment 4 #
8a. Recalls that under shared management, the Commission retains ultimate responsibility for the implementation of the EU budget while Member States are required to set up effective national management and control systems of EU funded programmes in line with the applicable rules to prevent, detect and correct any irregularities or fraud cases in the EU expenditure and to provide reasonable assurance to the Commission that EU resources are being spent in accordance with the principle of sound financial management;
Amendment 40 #
Motion for a resolution Paragraph 14 14. Is of the opinion that digitalisation and the adoption of more sophisticated IT tools at national and EU levels would improve the management, control and audit of EU funds, and could contribute to prevent irregularities and to substantially reducing bureaucracy; considers that digitalisation allows easier and quicker access to important data during verifications and, therefore, to a reduction in the number of controls; highlights the importance of promoting and sharing national good practices across the EU of effective IT tools for data mining and avoidance of conflict of interest in the context of EU funds; highlights that, nevertheless, no IT system could ever completely replace the human factor; insists that well-trained staff continue to play an important role in the management and control system of the EU funds; calls on the Member States to ameliorate the digitalisation of administrative work with a view to a harmonised approach, and to ensure the proper training of staff involved in the implementation of EU funds, as well as in control and audits, allowing them to fully
Amendment 41 #
Motion for a resolution Paragraph 14 14. Is of the opinion that digitalisation and the adoption of more sophisticated IT tools would improve the management, control and audit of EU funds, and could contribute to substantially reducing bureaucracy, assuming that IT tools in the Member States and at the Commission are interoperable; considers that digitalisation allows easier and quicker access to important data during verifications and, therefore, to a reduction in the number of controls; highlights that, nevertheless, no IT system could ever completely replace the human factor; insists that well-trained staff continue to play an important role in the management and control system of the EU funds; calls on the Member States to ameliorate the digitalisation of administrative work with a view to a harmonised approach, and to ensure the proper training of staff involved in the implementation of EU funds, as well as in control and audits, allowing them to fully understand the capabilities of the IT tools, know what to expect in terms of the results produced and understand their role in the decision-making process;
Amendment 42 #
Motion for a resolution Paragraph 14 14. Is of the opinion that digitalisation and the adoption of more sophisticated IT tools would improve the management, control and audit of EU funds, and could contribute to substantially reducing bureaucracy and increasing quality of checks and audits; considers that digitalisation allows easier and quicker access to important data during verifications and, therefore, to a reduction in the number of controls; highlights that, nevertheless, no IT system could ever completely replace the human factor; insists that well-trained staff continue to play an important role in the management and control system of the EU funds; calls on the Member States to ameliorate the digitalisation of administrative work with a view to a harmonised approach, and to ensure the proper training of staff involved in the implementation of EU funds, as well as in control and audits, allowing them to fully understand the capabilities of the IT tools, know what to expect in terms of the results produced and understand their role in the decision-making process;
Amendment 43 #
Motion for a resolution Paragraph 14 a (new) 14a. As for CAP invites the Commission to reduce administrative burden for farmer which is often the reason for unintentional mistakes which should be clearly separated from deliberate frauds, hence ensuring the more efficient deployment of CAP funds; recommeds that the audit reports continue to give a clear breakdown of error rates for each pillar of the CAP, identifying areas in which simplification is most needed; insists that a marginally higher error rate for agri-environmental measures should not discourage the Member States from making them available to farmers in rural communities;
Amendment 44 #
Motion for a resolution Paragraph 14 a (new) 14a. Recommends Member States to establish or use specific ‘ethics’ systems, measures and codes to preserve the good conduct, transparency and independence of the auditors' work in the Member States;
Amendment 45 #
Motion for a resolution Paragraph 14 b (new) 14b. supports the use of simplified cost options to allow authorities reduce complexity and ensuring that farmers are not left out of pocket concerning payments compensating ‘additional costs incurred and income foregone’, for example in regard to Natura 2000, groundwater protection zones under the Water Framework Directive , or other second-pillar payments linked to statutory obligations; notes that ensuring high, or at least remunerative, payments for public goods provided by the protection of such areas will, if applied correctly by the Member States and the Commission, go a long way to easing tensions and diminishing the resentment among some farmers in relation to protection obligations;
Amendment 46 #
Motion for a resolution Paragraph 14 b (new) 14b. Recalls the importance of ex ante controls and checks in order to prevent financial errors and irregularities, particularly conflict of interests, in addition to the ex post checks on the expenditure declared to the Commission, e.g. by paying more attention to the systems audits; insists on the importance of using IT tools for data mining and avoidance of conflict of interests; notes in this regard the systems audits performed by the Commission in the context of the Recovery and Resilience Facility;
Amendment 47 #
Motion for a resolution Paragraph 16 16. Insists that good collaboration and feedback between the managing and audit authorities and the Commission is another important factor in the effectiveness of the assurance and control framework; welcomes the fact that overall, there is a good level of communication and exchange between Commission and the national audit authorities but points out that there is always room for improvement; calls on the Commission to proactively promote good communication and the exchange of good auditing practices between the audit authorities and the programme managing authorities at the EU, national and regional levels;
Amendment 48 #
Motion for a resolution Paragraph 16 16. Insists that good collaboration and feedback between the managing and audit authorities and the Commission is another important factor in the effectiveness of the assurance and control framework; calls on the Commission to proactively promote good communication between the audit authorities and the programme managing authorities; continue to facilitate the sharing of good auditing practices between Member States’ auditors at the EU, national and regional levels;
Amendment 49 #
Motion for a resolution Paragraph 16 a (new) 16a. Points out the importance at the national level of allocating adequate resources to the control and auditing of the EU expenditure as well as further enhancing the technical capacity of the audit authorities’ staff in order to avoid delays or risk of inefficiencies in the assurance process, on one side, to improve the audit quality and reliability of their audit work, on the other side;
Amendment 5 #
Motion for a resolution Paragraph 8 b (new) 8b. Recalls that the Single Audit approach refers to an audit system in which each audit layer builds on work done by the preceding one provided that this is reliable and accurate; highlights that a correct implementation of the Single Audit approach prevents a duplication of audit work, reducing the overall cost of audit activities for the Member States and the Commission and decreasing the administrative burden on auditees; points out that, in practice, the application of the Single Audit approach depends, inter alia, on the robust and reliable audit work carried out by the audit bodies in the Member States;
Amendment 6 #
Motion for a resolution Paragraph 1 1. Highlights that the complexity of the rules on EU funds, together with the frequent changes in regulations between programming periods, can lead to legal uncertainty or compliance issues, as well as misinterpretations and deficient implementation, which generate a higher risk of errors;
Amendment 7 #
Motion for a resolution Paragraph -1 (new) -1. Welcomes that, notwithstanding the identified shortcomings, the work of the audit bodies in the Member States is perceived as reliable and robust, as well as the fact that the those shortcomings do not directly hinder the application of the Single Audit, according the study on the matter requested by the Committee on Budgetary Control; notes the general agreement on the fact that the audit practices in Member States are compliant with international standards for public- sector auditing and that only in very limited circumstances, potential sources of concern for the independence of the audit bodies have been identified;
Amendment 8 #
Motion for a resolution Paragraph 2 2. Maintains that translation in the field of law is a complex and demanding procedure
Amendment 9 #
Motion for a resolution Paragraph 3 3. Recalls the observations of the discharge authority as regards the implementation of the Recovery and Resilience Facility and the involvement of regional and local authorities and other stakeholders who were not sufficiently involved in the setting-up of national programmes; acknowledges, likewise, the national ownership of the Recovery and Resilience Plans (RRPs) and the limited time-frame for launching the Facility, and underlines the different ways in which Member States have integrated regional and local authorities in the ongoing implementation of the national RRPs taking into account the different degrees of decentralisation;
source: 752.911
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