EU-Funds (EFRE): simplification of provisions (Working Group on the Structural Funds)
Report ID: 15


Ziel der Überprüfung im BKA sowie in den Ländern Burgenland, Salzburg und Vorarlberg war es, insbesondere zu beurteilen, in welchem Ausmaß unter den geltenden Rahmenbedingungen ausgewählte, in den Jahren 2008 bis 2011 in Kraft getretene EU–Maßnahmen zur vereinfachten Abwicklung von EU–Förderungen im Rahmen des Europäischen Fonds für Regionale Entwicklung (EFRE) in Österreich umgesetzt und ob die von der EU angestrebten Vereinfachungen auch auf Ebene der Förderungsempfänger wirksam wurden.

The audit of EU Regional Fund projects focused on the environment and environmentally friendly energy
Report ID: 45

1. This report concerns a coordinated audit performed by National Audit Office of Denmark (Rigsrevisionen) and the Gdansk Regional Branch of the Supreme Audit Office of the Republic of Poland (NIK) on the EU Regional Funds projects focused on the environment and environmentally friendly energy for the programme period 2007-2013.

2. The report contains information about programmes co-financed by the European Regional Development Fund (ERDF) including their administration, control follow-up, and how they are organised in Denmark and the Pomorskie Voivodship (region). The report is based on information gathered from national audits, the internet and other open sources.

3. In February 2010, Rigsrevisionen and the NIK engaged in a coordinated audit of environmental projects accepted to receive grants from the ERDF. The objective of the cooperation was for both Supreme Audit Institutions (SAIs) to gain comparable knowledge about the regional fund and find out whether administration and management of regional fund projects focused on the environment and environmentally friendly energy were adequate in the two countries. This was done on the basis of samples from environmental projects
accepted to receive grants from the ERDF in the period 2007-2009.

4. Furthermore, the purpose of conducting the audit as a coordinated audit was to identify examples of ‘good practice’ on the basis of the audit findings to the benefit of both SAIs and the administrations in the two countries.

5. Rigsrevisionen and the NIK have each performed the audit relating to Denmark and the Pomorskie Voivodship, respectively. These audits have been reported separately to the administrations in the two countries.

6. On the basis of these reports, this joint report with examples of “good practice” has been drawn up. The results of the Danish audit, the conclusions of the joint audit and the examples
of ‘good practice’ will form part of Rigsrevisionen’s report to the Danish parliament on
the audit of EU funds for 2009 while the findings of the Polish audit were included in the information
on the audit results published by the NIK.

Report on the parallel audit on the simplification of regulations in Structural Funds
Report ID: 66

In 2011, the Contact Committee of the heads of Supreme Audit Institutions (SAI) of the Member States of the European Union (EU) and the European Court of Auditors (ECA) mandated the Working Group on Structural Funds to continue its review of issues relating to Structural Funds, more specifically, to carry out a parallel audit on the ‘Simplification of the Regulations in Structural Funds.’
The Working Group consisted of 12 EU Member State SAIs and audited the impact of nine simplification measures. The following are the key conclusions:

 In general, the simplification measures were infrequently used and affected only a small proportion of all projects, largely due to a number of factors relating to the management of Structural Funds at national and supranational level, including:
• Introduction at a late stage by amendatory regulations;
• Not all measures were suitable for all Operational Programmes (OP) and/or projects;
• Limitations relating to the resources required for the implementation of measures; and
• A lack of clarity and legal certainty experienced by national authorities.

 Whenever the measures were used, most of them were considered to represent genuine simplification. Factors relating to why national authorities chose not to use the measures differed considerably, depending on the European system1, the national legal system, the organisation of Structural Funds in each Member State, as well as the specific features of each OP. These conditions influenced the potential scope of application of measures and their respective benefit.

The key findings of the report were the following:
 Measures 1, 2 and 3 (flat-rate for indirect costs, flat-rate costs based on standard scales of unit cost, lump sums):
In the case of national authorities, the process of establishing the methodology relating to the application of the above-indicated measures led to administrative burdens and was regarded as difficult and involving an element of risk; furthermore, developing the methodology and acquiring the Commission’s approval were often lengthy processes. The lump sum was perceived as too low and the ‘all or nothing-principle’ led to a reluctance of the measure’s use. Whenever these three measures were used, they constituted genuine simplification.
 Measure 4 (in-kind contributions to financial engineering schemes):
This was the only measure that was not used in any of the audited OPs within the participating Member States.

Report on the parallel audit on the Management and Control Systems for Assistance Granted under the Structural Funds
Report ID: 68

This was a parallel audit on the application of the Structural Funds regulations, to ensure that all Member States establish appropriate audit trails and implement independent checks on 5% of transactions. The results of the audit will be used by all current and prospective new Member States in developing their own management and control systems.

The main conclusions were:

  • In most countries there is a sufficient audit trail as required by regulations, although some weaknesses in the audit trail were noted when examining individual projects, these were not usually systematic weaknesses, but individual project failings.
  • The progress reporting of projects was felt to be relatively weak, focusing largely on financial monitoring without providing any link to the outputs and outcomes of the projects.
  • In most countries the execution and reporting of the 5% checks complied with Commission Regulation 438/2001. Where this is not the case, the relevant authorities have taken steps in the right direction to ensure that the required checks will be carried out by the end of the programming period.
  • The independence of the organizations that carry out the 5% sample checks was guaranteed in all programmes.
  • The implementation of the 5% checks across all countries has been relatively slow and has often not been evenly spread over the period to date.
  • The way the Structural Fund rules are formulated by the European Commission (Commission) leaves room for ambiguous or even contradictory interpretations.
  • Furthermore, some Member States expressed concern about an increasing burden to implement the new provisions for the 2000 - 2006 Programme, with little opportunity to apply a risk-based approach, and associated resource costs that were out of proportion to the funding provided by the European Union.


Report on parallel audit on the processes of identifying reporting and following-up on irregularities
Report ID: 69

In total the 2000-2006 Structural Funds programme involved an expenditure of 141,5 billion Euro (without Community initiatives, innovative measures and technical assistance) to the nine Member States whose SAIs carried out the parallel audit.

The significance of the value of Structural Funds to all Member States prompted the Contact Committee in 2000 to establish a Working Group to carry out an exploratory survey of EU structural funds. A questionnaire was sent to the SAIs to gain an understanding of how these funds were controlled and managed by the various countries and to identify possible risk areas. Work was planned to coincide with the 2000-2006 funding cycle and revision of the regulations covering the funds.

The Working Group reported its findings from this work to the Contact Committee in November 2002 and recommended to conduct  a parallel audit aimed to identify parts of the controls that need to be improved, and provide an overview of best practice. It was determined that the best way to achieve this was to focus the parallel audit on the application of the regulations, to ensure that all Member States establish appropriate audit trails for transactions and implement independent checks on 5% of transactions. The results of the audit would be used not only for the Member States, but also for the new Member States.

Each SAI produced a Country Report which has been consolidated to provide an overall conclusion, identify good practice, weaknesses and recommendations arising from the work. Issues raised byindividual SAIs are annotated under each Objective where appropriate. The Working Group have then produced the combined report summarising the key findings and recommendations from those Country.

The audit approach was enhanced through the participation of the European Court of Auditors (ECA), in particular, towards the end of the report drafting process the ECA benchmarked the draft report findings and recommendations against those reported by the ECA. The report contains recommendations for  audit trails and 5% checks as well as for  future parallel audits.