CATEGORÍA N° 3 INFRAESTRUCTURA TECNOLÓGICA

3.16. The management of the Structural Funds in 2000 concentrated on measures concerning four program- ming periods, i.e. the new period 2000 to 2006, the preceding period, 1994 to 1999, the period 1989 to 1993 and the period before the reform in 1988.

The 2000 to 2006 period: implementation slower than anticipated

3.17. The adoption of the new forms of assistance proved much slower than anticipated. The five-month deadline laid down in the regulation was exceeded in the case of virtuallyall applications for assistance. The new rules, which were designed to accelerate and sim- plifythe programming procedures (13_{), did not produce}

the expected results. On 31 December 2000 the Com- mission adopted for Objective 1 (development and struc- tural adjustment of regions whose development is lag- ging behind), the seven CSFs (Communitysupport frameworks) and 18 of the 19 SPDs (single program- ming documents) planned, but only49 of the 101 OPs (operational programmes) submitted bythe Member States. For Objective 2 (economic and social reconstruc- tion of areas experiencing structural difficulties), only eight of the 96 OPs/SPDs submitted were approved. This situation is attributable, in part, to delays in the adoption of the lists of areas eligible under Objective 2, in particular for Italy, whose list was not adopted until July2000. Within the framework of Objective 3 (adap- tation and modernisation of educational, training and employment policies and systems), which is financed

3.15. The Commission indeed made a large carry-over of payment appropriations from 1999 to 2000. The reason for this was the existence of requests for payments submitted to the Commission late in the year but not paid, which could not in any way be regarded as late payments. This build-up of payment requests suggested significant pressure on payment appropriations in 2000 which was only partly borne out, and this explains the partial under-utilisation of the appropria- tions carried over.

3.17. As indicated above in points 3.4 and 3.8, the under- utilisation of the budget in 2000 was the result of delays in adopting programmes.

These were due, partly, to the Commission’s late adoption of certain decisions, even though these were justified by the need to comply with the rules (adoption of eligible areas, addition- ality) or on grounds of sound financial management (guide- lines, negotiation of CSFs, SPDs, programmes).

Secondly, as the Court states, there was a failure in many cases to meet the deadlines set in Article 15 of Regulation (EC) No 1260/1999. It should be borne in mind nevertheless that the programming exercise for 2000 to 2006 was superim- posed on the final adjustment of the programming for the period 1994 to 1999 and that these two exercises, by their nature political, were conducted within very complex decision- making frameworks.

(13_{) Recital No 34 of Council Regulation (EC) No 1260/1999}

of 21 June 1999 laying down general provisions on the Structural Funds (OJ L 161, 26.6.1999, p. 1).

solelybythe European Social Fund, the majorityof forms of assistance planned (all except four) were approved. No Communityinitiative (CI) programme was adopted.

3.18. In the case of several programmes adopted in 2000, commitments and the corresponding payment instalments, although automatic, were not made bythe Commission in 2000 but in 2001 after the relevant appropriations had been carried over (see para- graph 3.9). In view of the new provisions in the regula- tionconcerningtotalorpartialdecommitmentofunused appropriations (14_{) bythe end of the second year fol-}

lowing the year of commitment, the consequences for programmes for which the relevant commitment was formalised at the end of the year 2000 in comparison with programmes for which the commitment was fina- lised at the beginning of 2001 are considerable: in the first case, automatic decommitments would commence in 2002 while in the second case theywould be carried out in 2003.

The comment by the Court on the slower-than-anticipated start to this new programming period is accurate, particularly in relation to Objectives 1 and 2. This delay was justified, however, by the need to ensure better integration of the Struc- tural Funds (a point criticised by the Court in relation to the 1994 to 1999 period) and the reflection in Structural Funds programming, particularly for the ESF, of the European employment strategy. In some cases, the operational pro- grammes and/or SPDs presented by the Member States were entirely recast following the first phase of the negotiations. This was the case particularly for Spain, which presented regional single-fund programmes for Objective 1 which were ‘converted’ into multi-fund programmes with a broader range of objectives.

In other cases, especially that of Greece, the delay was due to the Commission’s requirement that satisfactory management structures be put in place before the assistance measures were adopted.

The task of defining (in partnership) both quantified targets and monitoring, outcome and impact indicators with the quality required for the necessary evaluations that comply with the rules in some cases also took considerable time, which was difficult to reconcile with the five-month deadline.

3.18. The Commission is aware of this situation and is examining the consequences for the n + 2 rule in cases where, for a given programme, the 2000 tranche was committed for one Fund in 2000 out of appropriations for that financial year and for another Fund in 2001 out of appropriations car- ried over.

However, the Commission considers that in practice the prob- lem will be limited given that:

— for most programmes, payments made since 1 January 2000 are eligible,

— in the case of the tranche for 2000, almost half has been used up by the advances, and consequently the other half only should be used within the deadline set by the n + 2 rule, i.e. the end of 2002 for the commitment for 2000 and the end of 2003 for the commitment for 2001, — in the case of the tranche for 2001, the deadline in all

cases is the end of 2003.

This problem is confined to multi-Fund programmes which have been partly committed in 2000 and for which difficul- ties would arise in using up half the commitment made in 2000 before the end of 2002, when all the commitments for 2000 and 2001 should have been used up before the end of 2003.

3.19. The financing plans for new measures reproduce the annual distribution set out in the Communityfinan- cial perspective (15_{). These plans are not accompanied}

byreal forecasts of the measures’ progress. This imposes limits on the effectiveness of the programming, moni- toring and evaluation instruments which are applied to the interventions.

The 1994 to 1999 period

3.20. With regard to finalising commitments for the 1994 to 1999 period, amendments had to be carried out during the financial year 2000 to correct inconsis- tencies discovered at the end of 1999 between the legal commitments and the budget commitments, although some had still not been dealt with at the end of 2000. In 1999, in particular at the end of the year, the moni- toring committees for manyforms of assistance used their powers to decide on amendments to the financ- ing plans (16_{). These amendments must be confirmed by}

the Commission in the form of a formal decision within 20 working days, but this deadline was never adhered to. At the end of 2000, numerous amendments had still not been confirmed, which causes uncertaintyin the management of the measures because two financial plans now coexist, the one actuallyin force and the one adopted bythe monitoring committee. Moreover, there is still no global information on the state of progress of the measures for the period 1994 to 1999. As for Objective 2 in the period 1994 to 1996, only12 of the 72 ERDF interventions have been closed (two in 1999 and 10 in 2000). For the 73 ESF interventions, all the requests for payment of the balance, except one, have been submitted to the Commission, which, however, did not carryout the relevant decommitments, for a total of 74,4 million euro, in 2000.

3.19. Under Articles 18 and 19 of Council Regulation (EC) No 1260/1999 assistance packages are the subject of a financing plan specifying for each year and each priority the different sources of financing.

The Commission emphasises the tightening of budgetary dis- cipline arising from the provisions adopted regarding pro- gramming (financial perspectives) and commitment, which involve a close link between the financing plans for assistance measures and the financial perspectives.

Regarding the implementation of programmes, the n+ 2 rule imposes a framework on the national authorities establishing close links between their implementation plans and the financ- ing plans for programmes, while giving them considerable flexibility in planning and implementing measures.

3.20. Concerning amendments to programmes, the Com- mission adopted the majority of final decisions concerning assistance packages for 1994 to 1999 in 2000. This is logi- cal since the Member States had until 31 December 1999 to make their final amendments to programmes, in order to align the assistance measures on the final implementation forecasts.

It should be borne in mind that amendments made by the Member States must be forwarded to the Commission, which adopts them in the form of amendments to the decisions granting aid. In many cases, requests from Member States were forwarded to the Commission several months late and, in some cases, with errors that had to be corrected. The Com- mission regrets the excessive delay in the updating of the final decisions amending programmes.

By contrast, under the new regulation this procedure is simpli- fied as the Member States themselves will adopt amendments of this type within priorities by adjusting programme comple- ments for assistance packages, which will be sent to the Com- mission for information. Provided the adjustments do not affect the total financing for each Fund and priority, no amendment to the decision will be needed.

Regarding the Objective 2 programmes in the 1994 to 1996 sub-period, more have been terminated and the number of assistance operations completed up to the end of June 2001 is 24 out of 72.

(15_{) Articles 31(1), 28(2) and 17(2)(c) of the general Regula-}

tion.

(16_{) Procedures for amending the forms of assistance, annexed}

The periods prior to 1994: closure of the measures

3.21. On 31 December 2000, the amounts outstand- ing for the periods prior to 1994 came to 934 million euro, 100 million euro and 42 million euro respectively for the ERDF, the ESF and the EAGGF-Guidance, com- pared to 1 481 million euro, 170 million euro and 80 million euro as at 31 December 1999. In several cases, amendments to the financing plans for the mea- sures, which should have been closed several years before, were approved bya Commission decision in 2000.

3.22. In 2000, progress in the closure of interventions was still slow even if an improvement was noted in the case of certain Member States (in particular Italyand the United Kingdom). The Court can onlyreiterate the observations made in its previous Annual Reports and in its Special Report No 14/98 (17_{) which reported the}

shortcomings, at the level of the Member States and the Commission, which were at the root of the delays in the closure of the measures. Above all, the inabilityof the Commission to give due consideration to the findings of the audits carried out bythe various Commission departments and bythe Court remains one of the main causes for delays in closure.

Concerning the ESF, the Commission accepts the Court’s com- ment. However, it should be noted that in June 2001 the amount mentioned by the Court had been reduced by over EUR 12 million: all the decommitments for Germany total- ling EUR 6 894 717 had been made and the amount still not closed for Italy had been reduced by EUR 5 307 620. The other cases remaining open are being studied very closely in order that they can be finalised rapidly during the 2001 budget year.

3.21. The figures given by the Court bear out the progress made by the Commission in winding up assistance operations for the period before 1994. This has been carried out in com- pliance with the rules applying in each specific case, the most litigious situations being, of course, those presenting the greatest difficulty.

At the end of June 2001, the number of ERDF assistance operations still to be wound up was 94 with total outstand- ing commitments of EUR 632 million.

3.22. The Commission is doing everything it can to wind up all the assistance operations for the period before 1994. As and when the circumstances of programmes allow, it closes them. This position is mentioned in the work programmes adopted by the Commission.

Having said that, the winding up of assistance operations is a matter not solely for the Commission. It involves third par- ties and must, in addition, be carried out in compliance with the rules and requirements of sound financial management. Regulation (EC) No 1260/1999 states that, even upon auto- matic decommitment under Article 52, final payment (clo- sure) must be made giving rise ‘to the repayment of amounts unduly paid’. It should be noted also that Article 52(5) of Regulation (EC) No 1260/1999 extended the deadline for submitting applications for final payment to 31 March 2001. Lastly, the account taken of the results of checks carried out by the various Commission departments and the Court pro- longs the discussions with Member States.

3.23. In its Special Report No 14/98, the Court had recommended the use of provisional closures where one or more measures were still to be examined (18_{), in}

order to avoid entire programmes remaining in abey- ance when problems identified during audit onlycon- cerned a verylimited number of projects, or even only one. Whatever the case, the Commission should decom- mit automatically, no later than 30 September 2001, the amounts committed for operations or programmes approved before 1 January1994 in respect of which no application for final payment has been received (19_).

SPECIFIC APPRAISAL IN THE CONTEXT OF

THE STATEMENT OF ASSURANCE

Introduction

3.24. The financial data relating to commitments and payments made in 2000 concerning the 2000 to 2006 and previous programming periods for structural mea- sures are presented in paragraph 3.4 of this report. 3.25. The Court based its work towards issuing the Statement of Assurance on an examination of the accounts and on an analysis of certain control systems introduced bythe Commission in the area of structural measures. For the financial year 2000, the Court evalu- ated the implementation of Regulation (EC) No 2064/97 on the financial control of SF measures bythe Member States, the implementation of new provisions for the programming period 2000 to 2006, the procedures for the closure of measures and the checks carried out by the Commission in respect of SF measures.

3.23. The Commission considers that provisional closures, by suspending payment for one or more projects in an assis- tance operation, are not always practicable since:

(1) the amounts of the operations in question are frequently not properly determined if the scale of the problem is not itself properly determined first;

(2) the national authorities are often reluctant to cooperate in determining the amount to be suspended.

The procedure for suspending payments is lengthy as it involves entering into discussions with the beneficiary Member State as provided for in Article 24 of Regulation (EEC) No 4253/88.

The Commission is endeavouring firstly to complete examina- tions now in hand and to make the necessary corrections rather than embark upon provisional closures whose legal basis is unclear.

(18_{) Paragraphs 4.3 (c) and 3.17 of Special Report No 14/98}

on the closure of the forms of ERDF assistance (OJ C 368, 27.11.1998, p. 1).

3.26. In addition, the Court directlyexamined certain commitment and payment transactions listed in the accounts. Payments corresponding to the closing bal- ances for measures also gave rise to thorough checks in respect of all expenditure declared for a sub-programme throughout the period of assistance (two ERDF pay- ments and a Cohesion Fund project). As closure in respect of the ESF occurs in annual instalments, thor- ough checks were made in this area regarding the 1998 instalment of an operational programme.

3.27. Observations on the reliabilityof the Commu- nityaccounts and general observations on the legality and regularityare set out in Chapter 9 of this year’s Annual Report (see paragraphs 9.13 to 9.15 and 9.56 to 9.60). Observations on the legalityand the regularityof transactions concerning structural measures and on the systems examined are set out below.