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Parallel audit on Contribution of the Structural Funds to the Europe 2020 Strategy in the areas of Employment and/or Education

The Europe 2020 strategy is designed to promote growth and employment in the EU. The Member States' programmes for the use of Structural Funds allocated to them provide a sound basis for achieving these objectives, although some weaknesses have been found. This is the conclusion drawn by the “Working Group on Structural Funds VII" in its final aggregate report. The weaknesses mainly concern the complexity of regulations and the evaluation of success. Since the end of 2015, EU Member SAIs have worked together in the "Working Group on Structural Funds VII". The German SAI has chaired the working group that studied in eleven Member States whether the Structural Funds have helped making progress towards the Europe 2020 targets. The audit findings have been compiled in the final report. The working group has developed recommendations that are addressed to the European Commission and the Member States.
Oct 13, 2017

Executive summary
In 2015, the Contact Committee of the heads of the Supreme Audit Institutions (SAIs) of the Member States of the European Union and the European Court of Auditors 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 ‘Contribution of Structural Funds to the Europe 2020 Strategy in the areas of education and employment’.

The Working Group consisted of eleven SAIs, while a further SAI and the European Court of Auditors acted as observers. The parallel audit was carried out in order to examine whether the Structural Funds’ Operational Programmes (OPs) provide the necessary framework to meet the goals of the Europe 2020 Strategy and whether funding contributes to these goals. It focused on the audited OPs identified by the participating SAIs, as well as a selection of approved projects that were directly related to education and employment. The comparison of the national results was intended to establish similarities or differences across the Member States, as well as to identify good practice examples.

In conclusion, the participating SAIs concur that OPs provide the necessary basis to support the achievement of Europe 2020 Headline Targets in the areas of employment and education. However, at this point it is too early to confirm that the implementation of OPs in projects effectively contributes to these goals as expected. The following are the main conclusions and recommendations:

Design of OPs

  • Overall, OPs were properly prepared, notwithstanding minor weaknesses. The audit revealed that the complexity of rules governing Structural Funds and the requirements for establishing the OPs increased in this programming period.

    We recommend to the European Commission (Commission) addressing these challenges, especially by simplifying the system of targets and improving and simplifying templates for the Partnership Agreements and OPs.
  • In general, the system of indicators and corresponding targets provides a sound basis for facilitating assessment of progress in programme implementation. Nevertheless, audit results suggest that there is the need for improved transparency, suitability and manageability of indicators, including both the programme-specific indicators defined by the Member States and the common indicators specified in fund-specific regulations.

    We recommend that the Commission evaluate the suitability of the set of common indicators. The Member States and the Commission should also examine whether all the information gathered is necessary and whether data collection obligations can be reduced. Furthermore, we recommend that Member States explicitly justify the choice of financial, output and result indicators in order to enhance transparency of the OPs.
  • The introduction of the Performance Framework in the funding period 20142020 can be a first step leading to a stronger result orientation. However, the Commission’s emphasis on financial and output indicators may create counterproductive incentives.

    We recommend that MAs use options to establish as close and immediate a link between selected indicators for the Performance Framework and the intended results as possible. In order to enhance result-orientation, the Member States and the Commission should work closely together when designing rules pertaining to financial incentives in the next programming period.
  • The Member States had monitoring and evaluation systems in place that have been assessed as being adequate in general. Reasons for the delayed functioning in some cases might include the late adoption of EU implementing regulations and guidance documents. The audit has highlighted the importance of ex-ante evaluations as an instrument for enhancing the design of OPs.

    The Commission and Member States should ensure that relevant EU implementing regulations are finalized in due time before the beginning of the programming period. Furthermore, Member States should be able to reuse as many elements of their existing national monitoring systems as possible for the new period. We recommend that MAs pay closer attention to findings and conclusions of ex-ante evaluations when designing subsequent OPs. We address recommendations to the MAs and the Member States for enhancing monitoring and evaluation, e.g. use the data of national statistics where appropriate.
  • In the vast majority of cases, the proposed interventions in the OPs follow a sound intervention logic and are therefore considered potentially effective. On a general note, guiding principles for the selection of projects are sufficiently result-orientated and contribute to their potential effectiveness. The criterion of efficiency has not always been adequately considered in the selection process.

    We recommend that MAs strengthen the instrument of intervention logic of Structural Funding by further clarifying the relations between actions and results and especially the contribution to specific objectives and Headline Targets. Furthermore, we recommend that MAs pay more attention to the criterion of efficiency as part of guiding principles for the selection of projects.
  • Audit findings suggest a need for adjusting OPs during the programming period to reflect current events. However, the conditions that have to be met when making changes to the OPs are too cumbersome to live up to the MAs’ needs in practice.

    We recommend that the Commission take into account simplifications of the legal provisions governing programming for the next period in order to allow a more flexible adaptation of OPs reflecting current events.

 

Implementation of OPs

  • Since the number of projects assessed was low, we do not deem them as being representative of all projects approved. Nevertheless, the selected projects provide an insight into the implementation of the OPs.
  • For almost every assessed project the MA defined clear selection and award criteria, which are in most projects – at least partly – linked to the intended results of the OP and the Europe 2020 Headline Targets. The beneficiaries responsible for preparing the projects met these criteria. In the vast majority of cases, they also explained adequately or at least to some extent the way in which the goals were to be reached. Cost efficiency was not always reported as an essential criterion in the selection process.

    We recommend that MAs use opportunities for further improving the selection process, including efforts to ensure that
  • in all cases there are clear selection and award criteria, which are linked to the intended results of the OP and the Europe 2020 Headline Targets;
  • in all approved projects there is a clear explanation of the way in which the goals of the project shall be reached;
  • the grantor establishes a conclusive relationship of the project selection with the OP and Europe 2020 Headline Targets.

 

  • MAs have taken measures to collect data on project results and the extent to which goals have been reached. The way in which data is collected varies by Member State.

    We recommend that MAs ensure that the grantor insists on the indicators set and does not adapt the measurement of outputs and results to information provided by the grantee. Transparent and unambiguous project result indicators and procedures for measuring them are indispensable.
  •  It is difficult at this stage to draw conclusions on first results, effectiveness and efficiency of the projects assessed, as many projects are still ongoing. It is not yet possible to conclude whether activities will contribute to the Europe 2020 Strategy and offer European added value.

    We recommend that MAs make sure that the OP and Europe 2020 Headline Targets are still in focus when changing the project selection and award criteria retroactively, and operationalize the processes of grant reduction in case of non-compliance with the goals. When evaluating results they should focus especially on establishing the relationship between project results and the OP targets as well as the Europe 2020 targets.



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