Mon 10 Mar 2008
A report from the EU court of Auditors released om March 10, 2008, tells a story of shocking incompetence and contempt of the EU Commission for our hard-earned tax money in relation to financing major regional projects.
The EU Court of Auditors gives the EU Commission a scathing criticism for its incompetent administration of 1. preliminary examinations and 2. collection of relevant information to assess if achieved effects of investments correspond to what had been expected.
The Audit emphasizes the importance hereof, considering the financial significance of major investment projects and their potential impact on regional development.
The Court's audit centred on major projects co-financed by the ERDF (European Regional Development Fund) and similar-sized projects co-financed by the Cohesion Fund during the 1994-1999 and 2000-2006 programming periods.
"1. The (preliminary) examination varied in quality, no common approach having been provided for the managing departments until 2003.
2. Great disparities exist in the quality of the financial and socioeconomic analyses presented in support of aid applications, and many weaknesses were tolerated by the Commission. As a result, major projects were adopted although the data provided did not permit an adequate assessment.
3. The factors used to adjust the Community co-financing rate are not yet sufficiently precise.In the case of productive projects, the possibility of granting a loan instead of a subsidy was not examined.
4. The weaknesses noted give rise to doubts concerning the added value of the special approval process for major projects and have negative repercussions on the later process of ex-post evaluation
As regards the ex-post evaluation of major projects from the 1994-1999 period (the only such evaluation that it had been possible to carry out at the time of the audit), the Court found that:
5. Member States only rarely carry out individual evaluations, and the evaluations carried out on the Commission's initiative had very heterogeneous aims and methods;
6. the evaluations were severely handicapped by the lack of pertinent and accurate information, both as regards anticipated effects and the initial situations and as regards monitoring, which often prevented an evaluation of the real results of major projects and the drawing of lessons."
All this means it is impossible to evaluate if the Commission-granted money was properly spent – or spent on e.g. bribery or just disappeared. Such irregularities have been proven to occur regularly . In Nov. of 2007 the Court of Auditors denied to approve the EU Budget for this reason - for the 13. consecutive time!!!
"To avoid financing decisions being reduced to a simple administrative exercise, the Court recommends that:
A: the Commission ensure, firstly, that the more efficient procedures and methods that it has itself developed are effectively and rigorously applied;
B: the Commission continue its efforts to have the Community participation rate set in a consistent manner and on the basis of explicit rules that are not exclusively financial.
C: the Commission, the European Parliament and the Council give thought, in the longer term, to the purpose of the special arrangements for authorising major projects
Which is to mean: To the Commission: You are too incompetent for this task.
"With regard to the ex-post evaluation, the Court recommends that the Commission:
a: Encourage the national administrations and the beneficiaries to evaluate the degree to which the objectives of each major project have been met.
b: Rationalise its own needs as regards the information required to assess the impact of the major projects on regional development.
c: Ensure that aid applications contain the information required in respect of objectives and implementation and results indicators, and that this information is rigorously monitored, in order to guarantee the quality of subsequent evaluations."
Which means: Maybe, you had better leave it to the nation state to evaluate the success or failure of major investment projects. For the Commission is too incompetent. At least, you should begin to think a little, before you grant money! And maybe you should take a closer look, if the buildings you granted money for have been built!
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