EU Trend Report 2010

Published on: 10 February 2010

The EU Trend Report 2010 is the eighth in a series of annual reports in which we outline developments in the financial management of the EU. It concentrates on the supervision and control of the use of EU funds both in the Netherlands and in the EU as a whole.

EU Trend Report 2010 PDF, 5067 kB

Conclusions

Our first main conclusion is that accountability for the use of EU funds in the member states improved in 2009 but to only a limited extent. The number of countries that issued a member state declaration (an annual report on the use of European funds) increased from three to four. The European Commission did not take any concrete action in the past year to encourage the development of member state declarations. The Dutch member state declaration is slightly wider in scope than in the previous year and now also covers the design of management and control systems in place for structural funds.

All member states submitted the compulsory annual summaries on their regularity audits and opinions. Most of the summaries, however, were not published. Their added value to transparent public accountability is therefore limited. The Netherlands did publish its annual summary. With regard to the structural funds, however, its quality leaves something to be desired, partly on account of European rules.

Our second main conclusion is that the European structural funds remain a cause of concern. The European Court of Auditors was again unable to express a positive opinion on the legality and regularity of the transactions. The error rates in many EU funds were slightly lower but in structural funding it was higher than 10% for the third year in succession. In the Netherlands, the European rules on the notification of irregularities in ERDF programmes (ERDF: European Regional Development Fund) and the public procurement of services to implement them were interpreted in different ways. Public procurement rules, moreover, were not observed correctly.

Our third main conclusion is that there is only limited insight into the extent to which the goals of EU policy are achieved. The European Commission does not provide full information on the outputs and impact of EU policy and the activity reports issued by the Commission's Directorates-General also contain little information on them. Insight into the impact of EU policy is also limited in the Netherlands. This is illustrated by the case of EU policy on combating counterfeit goods. Dutch Customs implements European regulations in this area professionally but has little insight into the achievement of policy goals.

Recommendations

To improve accountability and transparency in the EU as a whole and in the member states we recommend that the government:

insist in bilateral contacts with other member states – i.e. not only in Brussels – on the preparation of member state declarations;
call on the other EU member states to publish their annual summaries;
insist in Brussels that the Council of Economics and Finance Ministers (Ecofin) adopt a position in the debate on tolerable risk of error.

To improve accountability and transparency in the Netherlands we make the following recommendations:

the Ministers of Economic Affairs and of Education, Culture and Science should call on the European Commission to publish complete information on the recipients of European research funds in the Netherlands;
The Minister of Economic Affairs should strengthen her management of ERDF programmes and ensure that the interpretation of European rules is harmonised. Together with the Minister of Social Affairs and Employment, she should ensure that contracting entities that receive ERDF or ESF subsidies observe the procurement procedures in accordance with statutory requirements;
the Minister of Economic Affairs and Customs should provide more insight in their annual reports and evaluations into the extent to which the goals of the policy on counterfeit goods are achieved.

Response

The government does not agree with our criticism of the quality of the annual summaries; the European Commission has said that the Dutch summaries comply with European regulations. The government said that the Minister of Economic Affairs would evaluate the ERDF management model for 2007-2013 in 2010. It also observed that the ministries and managing authorities would provide information and advice on the application of European public procurement regulations and together with the certifying and audit authorities would supervise compliance with them. The government recognises the importance of publishing information on European projects and the recipients of EU funds, and notes that the managing authorities comply with the European Commission's publication requirements. The government also outlined the initiatives being taken by the Ministers of Economic Affairs and Finance to improve the limited insight available into the impact of European policy on counterfeit goods in the Netherlands.

Stand van zaken