NOVEMBER 2014
EUROPEAN
COURT
OF AUDITORS
Journal
European Court of Auditors
NO.
10
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Cover:
- Lazaros S. Lazarou, ECA Member
- EU Accountability Conference 2014
- Contact Committe 2014
1
TABLE OF CONTENTS
02
05
11
13
02 Reflections on the 2013 Annual Report of the ECA
Interview with Lazaros S. Lazarou, ECA Member responsible for the statement
of assurance
By Rosmarie Carotti
05
EU Accountability Conference 2014
Brussels, 14 October 2014
Key speakers included: Mr Olli Rehn, Vice-President of the European Parliament & former
EU Commissioner; Mr Vítor Caldeira, President of the ECA; Ms Ingeborg Grässle, Chair of
the Committee on Budgetary Control of the European Parliament; and Mr Kevin Cardiff,
Member of the Court
By Rosmarie Carotti and Jacques Sciberras, head of private office
11
Contact Committee 2014,
15 to 17 October 2014
Towards enhanced co-operation among EU SAIs
By Vítor Caldeira, ECA President
13
The Europe 2020 strategy – an opportunity for closer co-operation
By Henrik Otbo, ECA Member
17
2004 TEN YEARS OF ENLARGEMENT 2014
17
10 milestones to maturity
By Giedrė Švedienė, Auditor General, National Audit Office of Lithuania
22
25
29
32
35
37
22
Supreme Audit Office of the Czech Republic – 10 Years Together in the EU
Looking back on 10 years of a common journey through the European Union
By Miloslav Kala, President of the Czech Supreme Audit Office
25
***
Special Report N° 13/2014
EU support for rehabilitation following the earthquake in Haïti
Interview with Piotr Zych, team leader
By Rosmarie Carotti
29
Special Report N°15/2014
Between external borders and internal solidarity: The special report on the
External Borders Fund
By Katharina Bryan, team leader
32
FOCUS
34
ECA SOCIAL
35
La certification du service d’audit interne de la Cour des comptes européenne
Entretien avec Meletios Stavrakis, auditeur interne de la Cour
Par Rosmarie Carotti
37
Journée de la traduction 2014
Cour des comptes européenne, 30 septembre 2014
Par Veronica Ardelean, chef de l’unité roumaine de traduction
39
Evaluating the impact of International Financial Reporting Standards in the EU
A meeting was organised by the Association of Chartered Certified Accountants (ACCA)
and hosted by Theodor Dumitru Stolojan, MEP in the European Parliament in Brussels,
on 25 September 2014
By Rosmarie Carotti
Reflections on the 2013 Annual Report of the ECA
Interview with Lazaros S. Lazarou, ECA Member responsible
for the statement of assurance
2
By Rosmarie Carotti
R. C.: The statement of assurance is financial and
compliance audit. Is there performance audit in
the annual report?
Lazaros S. Lazarou, ECA Member responsible for the
statement of assurance
R. C: You are the ECA Member responsible for the
annual report published on 5 November 2014,
could you say something about this new role?
Lazaros S. Lazarou: I am honoured to be entrusted
by the ECA the responsibility for the statement of
assurance. In cooperation with the President, my
fellow Members and the ECA’s staff, all whom I
thank for their support and their contribution. I look
forward to continuing to address the challenges
ahead. In line with the provisions of Article 287 of
the Treaty on Functioning of the European Union,
the ECA provides in its annual report a statement of
assurance on the reliability of the EU’s consolidated
accounts and the legality and regularity of
the underlying transactions The statement of
assurance is supplemented by specific assessments
in chapters for revenue and the main areas of
expenditure, including a chapter on performance.
The single biggest task carried out by the ECA is
the statement of assurance audit which forms the
backbone of the ECA’s annual report. It is the most
prominent output of the ECA, appreciated by our
stakeholders, drawing significant media attention,
and playing a key role in the discharge procedure in
both the European Parliament and Council.
It is important that our work remains a relevant
tool in the hands of the legislative authorities for
exercising their public oversight responsibility. This
can be achieved by considering our stakeholders’
needs and expectations as expressed in the
discharge and other relevant resolutions, having
regard to Treaty provisions, our audit methodology
and audit work, possible resource implications and
the possibility of closer cooperation with national
SAIs in this respect.
Lazaros S. Lazarou: In Chapter 10 we provide
an overview of ECA’s performance audits, as
presented in special reports, and we also examine
the Commission’s reporting on performance. In
the 2013 annual report we conclude that when
spending EU funds in the 2007-2013 programming
period, the focus was in absorption (the need to
spend money) and compliance rather than good
performance in achieving results.
R. C.: Actually we always talk about one annual
report but in reality the ECA publishes together
in one document two annual reports. There is
a report on the EU budget and there is a report
on the European Development Funds which are
outside the budget. Are you responsible for it as
well?
Lazaros S. Lazarou: Indeed the ECA publishes one
document containing two annual reports. One
on the implementation of the EU budget and a
separate one on the European Development Funds
which also provides a statement of assurance under
the responsibility of my fellow Member, Mrs Danièle
Lamarque. The transactions sampled are selected
and validated in just the same way as for the EU
budget.
R. C.: Let’s have a look at the 2013 annual report
on the EU budget. Which are the areas mostly
affected by material errors?
Lazaros S. Lazarou: The 2013 EU budget comprises
revenue of € 149.5 billion and expenditure
of € 148.5 billion, representing around € 290
for every EU citizen. The estimated error rate,
which measures the level of irregularity, for 2013
payments is 4.7%, close to the 4.8% for 2012 and
persistently higher than the materiality threshold
of 2%.
In 2013, all spending areas apart from
administrative expenditure are affected by material
error, with the two most error-prone being regional
policy, energy and transport with 6.9% and rural
development, environment, fisheries and health
with 6.7%.
3
R. C.: What is new in the 2013 annual report
compared to previous years?
R. C.: How does the ECA overview the EU
spending in shared management?
Lazaros S. Lazarou: There are four key messages in
the 2013 annual report. First is that corrective and
recovery action by authorities in the Member States
and the Commission affecting the transactions we
sampled had a positive impact on the estimated
error rate. Without this action, the overall estimated
error rate would have been 6.3% rather than 4.7%.
Of course, authorities in the Member States in
particular do more than this: they also reject some
claims entirely. We cannot estimate the impact of
this action.
Lazaros S. Lazarou: The European Commission has
the final responsibility in the execution of the EU
budget. Under its supervisory and control role the
Commission has the responsibility to ensure that
in shared management, amounting to 80% of the
EU budget, Member States carry out the necessary
checks before submitting payment claims to the
Commission and that spending also focuses on
performance.
Second is that for many transactions affected by
error in the shared management areas, authorities
in the Member States had sufficient information
available to have detected and corrected the
errors before claiming reimbursement from the
Commission. In 2013 for shared management as a
whole the estimated error rate was 5.2% and in the
annual report we quantify the extent to which the
error rate in specific policy areas could have been
reduced. For example, in regional policy, energy
and transport the estimated error rate could have
been reduced from 6.9% to 3.9%.
Third is that the amounts to be funded from future
budgets continue to rise, totalling € 313 billion.
And fourth, as I indicated earlier, the lack of focus
on performance in spending EU funds in the 20072013 programming period.
R. C.: What do you mean, when you talk about
most likely error (MLE)?
Lazaros S. Lazarou: The most likely error rate is
an estimate of the payments that have not been
made in line with the relevant rules and regulations.
In performing our audit work, we use monetary
unit sampling because of the huge volume of
expenditure. Through the audit work we calculate a
most likely error rate for the budget as a whole and
we supplement this with most likely error rates for
the specific assessments.
Under the Treaty the ECA has a responsibility
to audit the EU budget. We do this through our
audit work which is financial and compliance
audit and furthermore, according to the Treaty,
we have to audit whether the EU money is
spent with adherence to the principles of sound
financial management (economy, efficiency and
effectiveness). That is audited and reported through
our special reports.
By auditing the implementation of the EU budget
as a whole we conclude how effectively the
Commission is discharging its responsibilities.
In doing so, we have to audit on the ground
transactions in Member States. Moreover, when
we conduct performance audit work we visit a
number of Member States which are representative,
in addition to other special characteristics, to the
overall budget for the specific policy under audit.
In our annual report and in our special reports we
give examples of findings in Member States. Such
examples are typical cases which illustrate the most
frequent type of errors/ observations. It is not a view
or an opinion on the particular Member State.
R C.: How do you see the future development of
the statement of assurance?
Lazaros S. Lazarou: The ECA is considering how
best to address the way forward for its annual
report. It has been decided that starting with the
2014 annual report there will be an alignment
of the specific assessments so as to best reflect
the multiannual financial framework (MFF) with
the possibility of rotation by and within the MFF
headings and also with the possibility of addressing
performance issues through audit work for the
statement of assurance.
Interview with Mr Lazaros S. Lazarou continued
At the same time with the publication of the 2013
annual report, the ECA has provided an overview of
EU spending in shared management agriculture and
cohesion over the 2007-2013 MFF. In this document
the ECA highlights financial management and
control issues, summarises its audit results and
considers the audit challenges of the 2014-2020
MFF. It also seeks to address European Parliament’s
request as expressed in the 2012 discharge
resolution to provide country specific information in
shared management.
The multiannual nature of programmes is also an
issue that often comes up in discussions. In this
respect, the closure of the 2007-2013 programming
period and the mid-term review of the MFF 20142020 are set as priority tasks for the ECA.
R. C.: Will performance audit therefore play a
greater role in the future?
Lazaros S. Lazarou: In its resolution of 4 February
2014 on the future role of the Court of Auditors,
the European Parliament considered ‘that the
ECA should build upon the DAS (statement of
assurance) model to determine whether results
have been achieved and to explain how they have
been achieved, so that lessons can be learned and
applied in other contexts’.
The ECA’s annual report for the last four years has
included a chapter on performance: ‘Getting results
from the EU budget’. As part of the 2014 statement
of assurance, Chambers I and II are conducting pilot
audit work on rural development, and regional
policy, energy and transport respectively in which
they will examine performance aspects of sampled
projects. The results and conclusions of this work
on performance may be presented in a dedicated
section of the specific assessment chapter or, in the
chapter on performance.
Of course we have to consider the extent to
which macro level performance (EU 2020 targets,
flagship initiatives, priorities, EU policies) can be
associated to micro level performance of projects in
transaction testing.
4
R. C.: Enforced certification by Member States is
required for agriculture. Will there be something
similar also for other sectors? How will the work
of the ECA be affected by that?
Lazaros S. Lazarou: The new provisions applicable
to shared management for the 2014-2020
MFF require the Member State audit bodies to
provide certificates on legality and regularity of
transactions, as well as endorse the Member States’
control statistics provided to the Commission. While
the requirement has been in place for cohesion
since 2007, for agriculture, this is a significant
change in the responsibilities of the audit bodies.
In its Opinion No 2/2004 on the Commission’s single
audit model, the ECA set out a number of general
principles for internal control systems to operate in
accordance with the ‘single audit’ model.
The ECA’s statement of assurance is based on the
examination of individual transactions. Although
the ECA also examines the different elements of
the Commission’s control pyramid (which includes
the Member States national and local authorities
control systems), it does not rely on the results,
primarily because of issues of timing and reliability.
The ECA will continue to examine the different
elements of the control pyramid during the course
of its audit work and engage with the Commission
so that, when the conditions are right, we can make
more use of the Commission’s control pyramid.
R. C.: Sir, we thank you for this interview.
Lazaros S. Lazarou: Thank you for the opportunity
to reflect on ECA’s 2013 annual report and the
challenges ahead.
5
EU Accountability Conference 2014
Brussels, 14 October 2014
Key speakers at this first high-level ECA conference included:
Mr Olli Rehn, Vice-President of the European Parliament & former EU
Commissioner; Mr Vítor Caldeira, President of the ECA; Ms Ingeborg
Grässle, Chair of the Committee on Budgetary Control of the European
Parliament; and Mr Kevin Cardiff, Member of the Court.
By Rosmarie Carotti and Jacques Sciberras, head of private office
The message of the Landscape Review
With this conference, the first of
its kind, the ECA invited an open
discussion about the audit and
accountability arrangements
in place in the EU and ways
of overcoming gaps and
overlaps inspired by its recently
published landscape review on
the subject. As Ingeborg Grässle,
Ingeborg Grässle, MEP
MEP, said: “At last an initiative to
examine certain all-too-familiar
shortcomings. I am extremely glad this is happening”.
Olli Rehn, MEP and former
Commissioner felt: “Today’s
seminar is an important step that
the Court of auditors has taken
with the Landscape review. I
believe that it provides plenty of
food for thought for having more
effective auditing in the future.”
In his opening remarks Vítor
Caldeira, ECA President, pointed
out that democratic scrutiny and efficient public
audit go hand-in-hand. They help governing
authorities improve their use of public funds,
and provide legitimacy by explaining to citizens
what progress is being made towards important
EU objectives. He warned against the risk of new
mechanisms being set up without adequate
provisions for democratic scrutiny or public audit.
Olli Rehn, MEP
It is the ECA’s mission to contribute to improving
democratic accountability by putting in place the
right arrangements, which also increasingly depend
on a high degree of coordination between multiple
layers of governance and scrutiny.
The ECA prepared the “Landscape Review of EU
Accountability and Public Audit Arrangements”, for
which Kevin Cardiff is the reporting Member. (See
the October 2014 issue of the ECA Journal).
The aim of the ECA’s Landscape Review is to analyse
the accountability arrangements for democratic
scrutiny and how public audit supports this process
effectively. The review covers a broad range of EU
policies, instruments, activities and institutional
arrangements. The review makes an assessment
of who is accountable for what, to who are such
entities accountable – are they accountable to
parliament, who is the auditor and what is the
scope of such auditor’s work?
Kevin Cardiff,
ECA Member
In his introduction Mr. Kevin
Cardiff explained that a first
conclusion of the Landscape
Review is that in the context of
multiple layers of governance,
multiple layers of democratic
scrutiny, and multiple layers of
audit, such complexity inevitably
leads to gaps and overlaps
in accountability and audit
arrangements.
The review identifies six areas where challenges
emerge: coordinated activities, the multispeed
nature of the EU, partnerships, the arrangements for
EU institutions and bodies, the management of the
EU budget, and accountability for results of nonbudgetary instruments.
The EU coordinates a number of activities between
the Member States: for example the Europe 2020
strategy or economic and fiscal governance under
the European Semester. Member States have also
established instruments under intergovernmental
agreements but which also assign important roles
to EU institutions. Most of the implementation
depends on the Member States and the
accountability structure is rather fragmented.
The multispeed nature of Europe refers to different
sub-sets of Member States participating in certain
policy areas. The Eurozone is one example,
Schengen is another. This creates very complex
governance structures which is the source of
EU Accountability Conference 2014 continued
significant debate in terms of the configuration of
democratic institutions to provide the necessary
oversight and legitimacy. This cascades down to the
audit landscape as well.
6
What should be the remit of auditors at EU and
national level?
The EU partners with a number of third parties,
which include: non-Member states, international
organisations, as well as private investors through
public-private partnerships and other financial
instruments. Accountability depends on the
agreements made with such parties and on the
governance and accountability culture of the
partners themselves.
Olli Rehn, MEP and former Commissioner said, “I
believe it should be the basic principle of audit that
democratic legitimacy, accountability and audit
are ensured at the level at which the decisions are
taken and implemented. The landscape review
clearly provides a critical account of the current
arrangements. At the EU and Eurozone level this
means that the task should be carried by the
European Court of auditors and scrutinised by the
European Parliament”.
The EU has over 60 institutions and bodies.
Arrangements in place differ based on clusters of
entities: institutions, agencies, joint undertakings,
and special institutions like the ECB and the EIB. The
challenge in this respect emerges from inconsistent
arrangements for parliamentary scrutiny and
for public audit which at times also leads to
disproportionate levels of scrutiny.
He explained that both the ESM (European Stability
Mechanism) and the Fiscal Compact had been
concluded in intergovernmental setting and thus
outside the EU treaties. The ECA has the mandate to
audit the annual budget of the EU, but not the ESM,
which has a subscribed capital of five times the
EU budget. Furthermore the ESM treaty does not
include any role for the European Parliament.
In terms of management of the EU budget, the
Landscape Review says that there are adequate
provisions for democratic scrutiny of the budget
and adequate public audit arrangements. But
in terms of funds under shared management,
performance could be improved with more
frontline scrutiny and audit at Member State level.
Conclusion
In terms of accountability for results, the main
challenge relates to non-budgetary instruments.
Most of the EU policies do not depend only on
the EU budget, but predominantly on national
budgets. Assessing results of such policies requires
an assessment of expenditure of all the different
sources of finance linked to that policy.
The second part of the Landscape Review deals
with the financial crisis. Europe experienced
a domino effect from financial, to fiscal, to
monetary, to economic crisis which led to a crisis
of confidence. The EU responded to each of these
domains with a number of measures all created in
a relatively short time. The result was more bodies
and structures created, new sets of rules introduced
and responses which depended on a mix of EU and
non-EU instruments. The response to the financial
crisis is an example of the challenges that emerge in
terms of accountability and public audit.
In its Landscape Review the ECA suggests five
tracks for reflection. How can scrutiny become
more collaborative between Parliaments and
auditors? How can rules be more consistent? How
can scrutiny be improved at Member State level?
How can the focus of accountability be shifted from
inputs to results? How can costly audit overlaps be
avoided?
All this requires a transformation of both the
democratic scrutiny and the audit landscape. On
the one hand the EU has more powers assigned and
complex systems to manage. This requires equally
strong accountability and legitimacy arrangements
at EU level. To gain citizen’s trust in the EU the
balance between these two dimensions needs to be
restored to a new accountability equilibrium.
Ingeborg Grässle, MEP is confident that these points
of reflections will also be taken up in the Budgetary
Control Committee.
The ECA, on its part, is ready to face the new
challenges and calls upon the help of the other
European institutions and the national audit
institutions.
7
The conference programme
The ECA conference on EU accountability
provided an opportunity for stakeholders to
discuss a number of issues highlighted in the
Landscape Review on EU accountability and audit
arrangements. It was structured along the lines of
an opening session, four parallel thematic sessions,
and a closing session.
The opening session consisted of a keynote speech
by Mr. Olli Rehn, Vice-President of the European
Parliament and former Commissioner, followed by
Mr. Vitor Caldeira, ECA President, Mr. Kevin Cardiff,
ECA Member, and Mr. Jacques Sciberras, team
leader for the Landscape Review. All interventions
outlined the main purpose and findings of the
review, its importance in the aftermath of a
dramatic financial crisis, and the realization of the
centrality of democratic scrutiny, the importance
of public accountability, and the role of auditors to
support this process.
The concluding session was addressed by Dr.
Ingerborg Grassle, chair of the Budgetary Control
(CONT) Committee of the European Parliament,
who congratulated the ECA for the initiative,
and referred to a number of key messages from
the Landscape Review and the conference itself
as important themes for reflection by the CONT
Committee in Parliament.
Following is an outline of the main points discussed
during the four different sessions of the conference.
Parallel 1: Accountability within the EU
From left to right: Manfred Kraff, deputy Director General, DG
Budget; Henrik Otbo, ECA Member; Dr Julie Smith, Cambridge
University;
This session addressed two key aspects
of accountability. The first intervention
addressed the issue of accountability for
performance – in particular, how to account
for policy and regulatory impact. The second
theme addressed accountability for EU funds
under shared management with member
States. This session was chaired by Mr. Henrik
Otbo, Member of the Court.
Mr Manfred Kraff, deputy Director General
(DG Budget, European Commission),
presented a paper on different initiatives
and reports currently being provided or
developed by the Commission in relation
to giving account for its performance in
different policy domains.
He explained how accountability is closely
related to providing information, and how
progress has been made in this respect
over recent years. Art 318 TFEU requires the
Commission to report on the evolution of the
EU’s finances based on the results achieved,
to complement the existing annual activity
reports and annual management plans of
different directorates. In this regard, standing
instructions should contribute to streamline
and improve the reports which should cover
policies leading to both spending and nonspending activities.
However, performance aspects go beyond
accountability and also impact the budgetary
process. The Commission aims at developing
a performance based budgeting approach,
which is still in a very embryonic stage. The
plan is to develop this approach through an
inter-institutional working group (IIWG) to
identify best practices, feasibility of obtaining
relevant and important data, and the cost
related to such work.
EU Accountability Conference 2014 continued
Dr. Igor Šoltes, MEP and vicechair of the EP Committee
on Budget Control (CONT)
discussed the question of
how accountability for shared
management can be addressed
at Member State and EU levels.
Dr. Igor Šoltes, MEP
Mr Šoltes explained the
importance that all institutions
play their role when in partnership – such as is
required by shared management, and this depends
crucially on the quality of frontline governance, the
clarity of objectives, and the level of complexity
of certain eligibility criteria which determine
compliance. He argued that an appropriate balance
between complex rules and effective governance
towards achieving key objectives must be
maintained.
In general there is a need for more cooperation
in terms of audit between ECA and MS SAIs. He
recalled that within the Contact Committee of
the Heads of EU SAIs already ten years ago a
working group had addressed challenges related
to Structural Funds and had identified weaknesses
in frontline governance as a key issue. He considers
cooperation and coordination of work between EU
SAIs as crucial for effective scrutiny of funds under
shared management, and urged SAIs to continue
taking initiatives similar to those undertaken in the
past within the Contact Committee.
The discussant, Dr. Julie Smith argued that better
coordination and coordination needed between the
EU and MS levels, however complexity of EU rules
makes it difficult to audit them and to give a clear
account by the EU to its citizens.
Parallel 2: Accountability of central banks and
supervisors
8
This session addressed two key aspects of central
banks and banking supervision in the Euro area.
The first intervention addressed the issue of
accountability of central banks and supervisory
bodies – what is the role of different auditors at EU
and national levels? The second theme addressed
accountability of the ECB to the European
Parliament. This session was chaired by Mr. Neven
Mates, Member of the Court.
Mr. Claes Norgren, Auditor General of the Swedish
National Audit Office, made a presentation on the
role of auditors at EU and national level particularly
in the context of the European Central Bank and all
national Central Banks within the Single Supervisory
Mechanism (SSM). He argued that when assessing
the accountability and audit chain of this new
system against a reasonable set of criteria as
identified by the Court’s Landscape Review or by
INTOSAI, one finds that there are a number of areas
that need to be improved in the accountability
structure. There are unclear definitions in the
roles and responsibilities of different parties,
management assurance about achievement of
policy objectives cannot be audited by ECA alone,
and scrutiny by parliament and how they are able to
take corrective actions is also unclear.
Prof. Mark Hallerberg, from the Hertie school of
governance gave an overview of the ECB and its
dialogue or scrutiny by the European Parliament.
He framed the level of accountability in terms
of whether the ECB meets the expectation to
inform the public about its decisions and its
performance and whether it can justify its decisions.
It also depends on whether and to what extent
Parliaments can take corrective actions when the
ECB does not fulfill its mandate satisfactorily.
In his conclusions, Prof, Hallerberg argues that
the current framework provides for a high degree
of policy dialogue which is a good step towards
greater transparency and accountability. However
as the ECB is assigned with more responsibilities,
more oversight powers are necessary.
The discussant, Mr. Giles Noblet, Deputy Director
General, International & European Relations of the
ECB outlined various treaty provisions in relation
to the ECB accountability and external audit
requirements, explaining how the ECB meets such
requirements in practice.
From left to right: Gilles Noblet, ECB; Claes Norgren, Auditor
General of Swedish National Audit-Office, Neven Mates, ECA
Member; Prof. Mark Halleberg, Hertie School of Governance
9
Parallel 3: Accountability for crisis and post crisis
structures
From left to right: Prof. Brigid Laffan, European University Institute;
Gay Mitchell, former MEP; Kalin Anev Janse, Secretary General ESM
This session addressed accountability for crisis
and post crisis structures, in particular those EU
structures set in response to the financial crisis,
as well as other instruments which are based on
intergovernmental agreements such as the ESM and
ESFS. This session was chaired by Mr. Gay Mitchell,
former MEP and author of ‘By Dail Account, auditing
of government, Past, Present and Future’.
Professor Brigid Laffan, from the European
University Institute, pointed out that crisis leave
legacies and that citizens realised in the crisis that
this is part of their fate – this in particular for the
northern Europeans who were not entirely happy
about them having to share the burden (European
integration has not been a win-win for all). She
argued that formal legitimacy in the EU is strong
(very strong legal framework) but that the output
legitimacy (“for the people”) has been severely
undermined. She stressed that accountability is
necessary for legitimacy and that it cannot avoid
complexity. The challenge is to work with the
complexity.
She argued that accountability should be placed
where decisions are taken and where they
manifest themselves. She pointed out that national
parliaments are important in terms of coordinated
actions such as the European Semester or the
Two and the Six pack and that there is a risk of
undermining national parliaments from their
political roles and responsibilities. The year 2017
will be very important in this respect since elections
will be held in France and Germany and the British
referendum will most likely take place.
Mr. Kaline Anev Janse, Secretary General of the
ESM, explained how the ESM has accomplished its
task – all countries originally participating stayed
in the euro and those receiving money from it, are
“champions in reforms”. It has a board of auditors
which has exhaustive audit rights and reports
frequently to its stakeholders (Ministers of finance
of the participating Member States). He considers
that the ESM, compared to similar institutions, has
a high level of governance and audit oversight.
In addition, it welcomes any request to meet, on
a voluntary basis, with the European Parliament
and national parliaments of participating Member
States.
Parallel 4: Accountability for leveraging of EU
funds with outside participation
From left to right: Gijs de Vries, St Antony’s College Oxford and
former ECA Member; Jonathan Taylor, Vice-President of EIB;
Prof. Christopher Bovis, University of Hull
This session addressed accountability for
leveraging of EU funds with outside participation,
such as that that through Public-Private
Partnerships (PPPs) or financial engineering
instruments such as those developed by the
European Investment Bank and European
Investment Fund. This session was chaired by Mr.
Gijs de Vries, St Anthony’s college Oxford, and
former ECA Member.
Professor Christopher Bovis, from the University
of Hull addressed the issue of democratic
control over Public-Private partnerships. He
outlined a number of important considerations
in relation to PPP control, such as the issue of
risk treatment, affordability, legal structure and
approach to monitor performance and results. He
argued that PPPs may serve different purposes
and be evaluated under different criteria: their
contribution towards better value for money,
their effect on incentivizing investment in
certain sectors, and their long term refinancing
requirements. Furthermore, accountability should
also consider issues of how PPPs are treated as
assets on national accounts, how to manage
monopolistic positions in certain markets and
control profit levels, and last but not least how
best to control PPPs through soft or hard law
approaches.
EU Accountability Conference 2014 continued
10
Mr Jonathan Taylor, Vice-President of EIB presented the governing structure of the EIB,
and the structure of audit. He explained that the EIB shareholders consist of 28 EU Member
States, is controlled by a Board of Governors made up of 28 EU Finance Ministers. The bank
is audited by an independent Audit Committee consisting of 6 members and which is
serviced by external private audit firms. The Committee reports to the Board of Governors.
He also outlined other internal control functions, including units for internal audit, fraud
investigations, compliance, and operations evaluations.
All presentations of the speakers at the conference are available on the ECA Website
http://www.eca.europa.eu/en/Pages/NewsItem.aspx?nid=5224
Landscape Review and other material are available on the ECA Website
http://www.eca.europa.eu/en/Pages/NewsItem.aspx?nid=5076
The location, the Committee of the Regions in
Brussels was put at the ECA’s disposal by
Jiří Buriánek, Secretary General of the Committee
of the Regions
Jiří Buriánek, Committee of the Regions’ Secretary
General: "We attach great importance to your work. I am
very appreciative of the fact that you have organised this
EU accountability conference, and I hope it will become a
regular event at this institution."
11
Contact Committe 2014
Luxembourg, 15 to 17 October 2014
Towards enhanced co-operation among EU SAIs
By Vítor Caldeira, ECA President
President Caldeira welcoming participants to the meeting
As announced in last month’s edition of the Journal,
the ECA hosted the annual meeting of the assembly
of the heads of EU supreme audit institutions (SAIs),
better known as the Contact Committee, from 15 to
17 October. The discussion focused on how best to
enhance co-operation, including identifying those
activities worth pursuing together, and deciding
the form this could take in practice.
Mr Šoltes, Vice-Chair of the CONT Committee of the
European Parliament and permanent rapporteur
for relations with the ECA, presented the European
Parliament’s Resolution of 4 February 2014, notably
its part on enhancing co-operation between
national SAIs and the ECA. As former head of the
SAI of Slovenia, Mr Šoltes is familiar with the work
of the Contact Committee – he welcomed the fact
that many of the co-operation issues mentioned
in the resolution have already been addressed,
although could be better known, and informed
the participants that he was looking forward
to co-operating with the Contact Committee.
Interestingly, although not discussed by the
Contact Committee, Mr Šoltes also touched upon
the issue of accountability and public scrutiny of
the expenditure of the Council of the European
Union – a topic also addressed in the ECA’s
landscape review of EU accountability and public
audit arrangements. The discussion on enhancing
co-operation continued with a presentation of
the ECA’s landscape review, which identifies risks
associated with new mechanisms being set up
without sufficient provisions for transparency,
accountability and audit.
In the ensuing discussions, heads of SAIs agreed
that there are benefits in further exploring
possibilities for enhancing co-operation among the
Contact Committee members. In this context, the
Contact Committee established an early warning
mechanism for monitoring EU developments,
informing its member SAIs and proposing
appropriate action.
Heads of SAIs also agreed that enhanced cooperation should extend to concrete audit activities,
which can make an important contribution to the
effective implementation of policies and measures
managed simultaneously at EU and national
levels. In this respect, the Contact Committee took
Contact Committe 2014 continued
particular account of some of the elements of the
ECA’s landscape review, as described in the next
paragraph.
The setting up of the banking union, particularly
the Single Supervisory Mechanism, is an example
of an area where EU SAIs see a risk of possible
accountability and audit gaps. The heads of SAIs
agreed to explore the functioning of the new
banking supervision and resolution mechanisms
at both EU and national levels. The Europe
2020 Strategy is another example of a complex
framework implemented at EU and national levels.
Considering the European Commission’s mid-term
review of the Europe 2020 strategy planned for
2015, members of the Contact Committee decided
to address the issue by initiating collaborative audit
work. The Contact Committee’s working body for
this issue – the Network for Europe 2020 Strategy
Audit – will play an important part in this process.
One of the working sessions organised within
the framework of the meeting provided the
opportunity to discuss the ECA’s view on the first
EU Anti-corruption report. Mr Nunes de Almeida,
Director for Public Procurement of DG MARKT at
the European Commission, contributed to the
discussion. The Heads of SAIs agreed to explore
if there was scope for common work in fighting
corruption, in particular in public procurement.
Another area which might have a significant
impact on EU Member State administrations is
12
the European Commission’s initiative to develop
European Public Sector Accounting Standards
(EPSAS). The Contact Committee, who had already
in 2013 established a task force to closely monitor
developments in this field, agreed to continue this
monitoring and contribute to the EPSAS project
where appropriate.
The heads of SAIs also took stock of activities
undertaken by the individual members of the
Contact Committee and its working bodies. The
reporting session included, among others, a
presentation on the activities of the Network of SAIs
of EU Candidate and Potential Candidate Countries,
whose representatives attended the meeting. The
status outline of activities of Contact Committee
working bodies is available on the website of the
Contact Committee.
The Contact Committee meetings traditionally
include a session in which SAIs share their national
experiences of auditing EU funds. The focus this
year was Denmark’s absorption of EU funds, the
preparation by Poland for implementing the
structural policy in 2014-2020, and the Lithuanian
SAI’s experience of performing the function of audit
authority for EU structural assistance.
The next meeting – to be hosted and chaired by the
State Audit Office of Latvia in June 2015 – will give
the heads of SAIs the opportunity to follow-up on
the decisions taken in Luxembourg.
The Europe 2020 strategy – an opportunity for
closer co-operation
13
By Henrik Otbo, ECA Member
3. Climate change and energy sustainability:
Reduce greenhouse gas emissions by 20%
compared to 1990 levels, increase the share
of renewables in final energy consumption to
20% and increase energy efficiency by 20%
4. Education: Reduce the rates of early school
leaving to below 10% and at least 40% of 30
to 34 year olds to have completed tertiary or
equivalent education
Henrik Otbo, ECA Member
On 7 April 2014 I attended a hearing on the Lisbon
strategy in the European Parliament Committee
on Budgetary Control. An extract of my speech
“The Lisbon strategy – seen through the Court’s
performance audits” was subsequently included in
the June 2014 number of the Journal. In this article
I reflect on the successor of the Lisbon strategy Europe 2020 - the challenges affecting its successful
implementation and the need, as well as the
opportunity, to work closer together with national
supreme audit institutions.
The Europe 2020 strategy, formally adopted by the
European Council in June 2010, reflects the changes
in EU's situation following the economic crisis. It
builds on lessons learned from the Lisbon strategy
and focuses on providing smart, sustainable and
inclusive growth in the EU. Where the Lisbon
strategy suffered from a lack of ownership and
implementation, Europe 2020 was established
within a framework which aimed at providing
stronger governance, regular and transparent
monitoring, leadership at the highest political
level (the European Council) and new Commission
instruments.
The targets established for the strategy are
politically binding and should be met by the EU
in 2020:
1. Employment: 75% of 20 to 64 year old men
and women to be in work
2. Research and Development (R&D): 3% of GDP
to be invested in the R&D sector
5. Fighting poverty and social exclusion: Reduce
poverty by lifting at least 20 million people
out of the risk of poverty and social exclusion.
Europe 2020 applies to the Union as a whole. The
strategy establishes a partnership between the
EU and its Member States, and as such, its success
depends on the commitment and involvement of
all parties concerned. Europe 2020 is supported
by the single market, the multi-annual financial
framework (MFF), EU's trade agenda and the reform
programmes of the Member States. Seven flagship
initiatives, directly linked to the five headline
targets, have been set up to promote skills, youth
employment, innovation, the digital economy,
industry, resource efficiency and poverty reduction.
While Europe 2020 does not have its own budget,
EU funds are channelled towards the relevant
goals via existing EU programmes. The 2014-2020
MFF enables the European Union to spend up
to €960 billion in commitments and €908 billion
in payments over the next seven years. A strong
emphasis is placed on expenditure aimed at
boosting growth and creating jobs. However, it is
important to bear in mind that the main burden
of implementation as well as funding falls on
the Member States. Compared to the national
budgets, the EU budget can only play a smaller,
but nevertheless, important part in encouraging
reforms and exploit synergies as well as the
dissemination of replicable solutions across the EU.
In the March 2014 communication “Taking
stock of the Europe 2020 strategy - for smart,
sustainable and inclusive growth”, the Commission
concludes that progress on the 2020 targets has
so far been mixed. The Commission assesses
that EU is on course to meet or come close to
The Europe 2020 strategy – an opportunity for closer
co-operation continued
its education, climate and energy targets. But
given the magnitude of the crisis, Member States
are not on track to meet employment, research
and development or poverty reduction targets,
although results and forecasts vary widely across
Member States.
Looking at a few of the recent special reports,
related to Europe 2020 targets, the Court has
identified a number of weaknesses affecting
the successful implementation of Europe the
2020 policies. A fundamental weakness, noted
in several audits across different policy areas, is a
disproportionate focus on spending, rather than
spending well, and only a limited focus on the
results to be achieved:
• The Court’s special report No 6/2013
examined the measures for diversifying
the rural economy in the EU and support
growth, employment and sustainable
development in rural areas. The Court
concluded that the Commission and the
Member States have, only to a limited extent,
achieved value for money, as aid was not
systematically directed to the projects most
likely to provide good results. Too often, and
particularly at the start of the programming
period, the selection of projects was driven
more by the need to spend the allocated
budget than by the quality of the projects.
• The Court’s special report No 9/2014
examined the EU investment and
promotion support to the wine sector.
The audit revealed that it was not possible
to demonstrate to what extent the
measure had contributed towards the
competitiveness of EU wines. It further
showed that Member States were not
sufficiently selective when choosing projects
for funding. The Court also noted a real risk
that the budget for the new programming
period is set too high, providing insufficient
incentive for Member States to apply sound
financial management.
• The Court’s special report No 6/2014
examined the contribut­ion of cohesion
policy funds towards the achievement
of Europe 2020 targets for renewable
energy. The Court found that the overall
14
value for money had been limited and that
improvements were needed if the funds
were to make a maximum contribution
towards the Europe 2020 target for the use
of renewable energy. Programmes did not
explain how the EU funds contributed to
reaching renewable energy targets and the
cost-effectiveness of the used funds had not
been sufficiently ensured.
• The Court’s special report No 7/2014
examined ERDF support to the development
of business incubators. The audit showed
that the performance of the audited
incubators was modest and thus their
contribution towards developing new
enterprises, resulting in growth and jobs,
disappointing. At the level of the managing
authority, there was too much focus on
output and not sufficient attention paid
on the scope and relevance of the services
provided by incubators as well as their finan­
cial sustainability. In most cases, the results
achieved had not been evaluated.
• The Court’s special report No 15/2013
on the effectiveness of the ‘Environment’
component of the LIFE programme, directly
managed by the Commission, further reflects
how good performance can be challenged
by having to spend in accordance with
national allocations of the budget. This
audit found that the lack of a mechanism to
target resources on relevant, pre-selected
objectives had diminished the impact of
the invested funds. The indicative national
budget allocations had hampered the
selection of the best projects, as projects
were not only selected based on their merit
but also on their Member State of origin.
While some projects had achieved positive
results, the programme had failed in fulfilling
its fundamental role in ensuring an effective
dissemination and replication of successful
projects across the EU, thus reducing its
overall impact.
This primary focus on spending does not provide
for the best possible results and the highest
possible impact for EU taxpayers. In the context of
the 2014-2020 MFF negotiations, the Commission
proposed a common performance framework for
15
both the Commission and the national authorities.
However, based on an analysis of the main
regulations governing the 2014-2020 programming
period, the Court has found that there is a risk that
the new framework will not succeed in shifting the
focus from spending on to results. Furthermore,
the Court has noted that a multi-annual budgetary
system in which funds are pre-allocated to Member
States, and the absorption of these funds becomes
an implicit objective, reduces the need and the
incentive for Member States to focus on good
performance.
Coming back to the Commission’s communication
from March 2014, taking stock of Europe 2020, the
document kicked off the mid-term review process
of the strategy. Following this communication,
the Commission held a public consultation,
open from May to October 2014, with the aim of
gathering the lessons learned from the first four
years of implementation. The next steps are the
presentation of the Commission’s proposals for a
mid-term review of the strategy, foreseen in early
2015, followed by a discussion at the 2015 spring
European Council.
As reflected in the number of reports linked to
Europe 2020 topics, the strategy is a key priority
for the Court and thus a reference points when
setting up its annual work programme. Due to
the importance of the strategy and the midterm
review process, the Court, in its 2014 Annual
Report, Chapter 10, will focus on Europe 2020
issues, i.e. the Commission’s monitoring and
reporting on the strategy as well as some of the
new performance elements relevant to the 20142020 programming period. One of these elements
will be the partnership agreements between the
Commission and the individual Member States.
These agreements are at the heart of the revised
framework governing disbursement from the
European Structural and Investment (ESI) funds
and set out how the Member State intends to use
the available EU funding to achieve its objectives
- with more detail provided in the lower level
programmes. I have therefore encouraged dialogue
and co-operation with national Supreme Audit
Institutions (SAIs) in order to gain their input and
knowledge as to the particular challenges of their
Member State.
The role of Chapter 10, “Getting results from the
EU budget”, is to take a "macro view" of significant
performance aspects noted in the implementation
of the EU budget. An essential element of the
chapter, which will continue to develop in the
coming years, is its cross-cutting nature, covering
several policy areas, allowing a more horizontal
view than the individual special reports.
However, auditing the implementation of Europe
2020 is not just an issue for the Court. Just as the
implementation of the strategy is a partnership
between EU and its Member States, so should
the audit of the performance of the strategy be
a partnership between the European Court
of Auditors and the SAIs. For that reason, the
priorities defined in the Court’s strategy for
International co-operation in 2014 and beyond
include a more active role in the Network on
Lisbon/Europe 2020, established in the context of
the Contact Committee (CC) of the Heads of the
SAIs, as well as the identification of topics which
could be addressed by SAIs in a collaborative way.
In its June 2014 meeting in Vienna, the CC Network
on Lisbon/Europe 2020 concluded that SAIs should
reinforce the focus on Europe 2020 targets at
national level by assessing the resources used, the
results achieved and the causes for the slippages.
SAIs should also promote and encourage:
• a stronger performance culture in the
Member States;
• a better implementation of the strategy;
• that results and impact are just as important
as compliance;
• that absorption should not be the
overriding priority when allocating EU
funds; and
• that implementing bodies increase their
focus on ensuring adequate performance
data.
By encouraging best practices in these areas,
SAIs can make an important contribution to the
implementation of Europe 2020. The network
also supported the possibility of performing coordinated or parallel audits in this area in addition
The Europe 2020 strategy – an opportunity for closer
co-operation continued
to lighter forms of co-operation. These conclusions
were supported by the Heads of the SAIs during
their meeting in Luxembourg in October 2014.
Notwithstanding the expectations of our
stakeholders, enhanced co-operation with SAIs
could bring many benefits. For one thing, the audit
rights and mandates of national SAIs and the Court
would be complementary and would allow more
comprehensive audit results – adding value to our
political stakeholders. In addition, the national
SAIs have significant knowledge as to the risks and
weaknesses affecting their particular Member State
- accumulated during years of auditing national
funds as well as the work performed on EU funds
under shared management. As for the Court, it has
a unique insight and access to the Commission,
other EU Institutions and bodies, as well as being
in a position to take a cross-cutting view of the
performance of all Member States.
Coming to the end of the article, I would like to
re-emphasise a few key points:
Persistent weaknesses have affected the
implementation of the Lisbon strategy and Europe
2020. Although results and forecasts vary, Member
States are clearly not on track to meet employment,
research and development or poverty reduction
targets. During the “second term” of the strategy it is
thus important that:
• Member States, as well as the Commission,
increase the focus and priority given to
achieving results, rather than just spending
money. Regrettably, the current budgetary
and legal framework does not fully support
this shift of focus; hence,
• SAIs can make an important contribution by
continuing to promote a strong performance
culture in their Member States - not only
when it comes to national funds but also
when managing EU funds;
• Enhanced co-operation between the SAIs
of the Member States and ECA in relation to
Europe 2020 issues will benefit everybody.
16
2004
TEN YEARS OF
ENLARGEMENT
2014
17
10 milestones to maturity
By Giedrė Švedienė, Auditor General, National Audit Office of Lithuania
The practical issues relating to the implementation
of the new legislation were laid out in a 5-year
Strategic Development Plan developed with the
assistance of SIGMA experts and covering the
period of August 2001 – December 2006.
Giedrė Švedienė, Auditor General,
National Audit Office of Lithuania
Early in 2002 Public Auditing Requirements were
approved setting general public auditing principles:
the value for money (performance) function started
as a new function of the audit, and the first ideas
about systemic approach to information systems
audits appeared.
The most significant achievement of the National
Audit Office of Lithuania (hereinafter NAOL) during
the years 2004-2014 was our journey towards
institutional maturity, competence, innovation,
trust, and respect. Joining the EU on May 1, 2004
with the other 9 new EU members was not only a
quantitative jump, but also served as the impetus
towards further development.
The Information Technology Strategic Development
Plan for 2002-2006 was approved in September
2002, indicating how the IT function should
support general strategic activities and how it
should be reshaped to do so effectively. It was
followed by the 5-year Strategic Development Plan
of the NAOL, the Personnel Development Strategy,
and the Training and Qualification Improvement
Strategy – all approved by the end of 2002.
Meeting the obligations of EU membership was
the first milestone in Lithuania’s process of positive
transition. At this time, we were sufficiently
prepared for change, consequently looking ahead
for momentum and the possibility to execute the
transformation and grasp the result of excellence.
Since 2003 the National Audit Office of Lithuania
has performed a new audit function - State
Budget revenue audit; it has also acted as an audit
authority of the EU financial assistance envisaged in
the EU Regulations.
The period of 2004-2014 was meaningful, because
important changes took place at the NAOL, which
brought new tasks and responsibilities, enriched
with increasing experience and confidence
with added-value following each effort and
engagement.
Institutional maturity does not happen by itself,
it has to be enabled, and there are significant
milestones to highlight and share with others; the
Lithuanian story might be repeated elsewhere,
bringing due maturity, and even better results.
1. Setting the direction
The National Audit Office of Lithuania effectively
utilized the pre-accession period with fundamental
national decisions supported by numerous
international initiatives. The key outcome of this
period was the enforcement of the new Law on the
State Control in 2001, which changed the profile of
the NAOL from that of revision and control to a pure
audit function.
2. Learning from others
The main strategic documents approved by
that time were extremely useful for the NAOL.
They allowed us to select and use the necessary
instruments from a range of tools, mainly
international initiatives of cooperation with the
Supreme Audit Institutions of Sweden, Denmark,
the United Kingdom, Norway, Finland, as well as
the first PHARE projects, and many committees and
working groups of INTOSAI and EUROSAI.
Each partner shared the best they had with
the National Audit Office of Lithuania and we
acknowledge their support:
• National Audit Office of the United Kingdom.
Cooperation since 1994, but made a massive
contribution to all activity areas of the NAOL
during the first and the second PHARE projects
from 2002 to 2005.
18
10 milestones to maturity continued
From left to right: Delegations visiting NAOL in 2007-2008 led by Mr Edward Leigh, Chairman of PAC, UK Parliament, Ms Karin Lindell,
Auditor General of Sweden, and Mr Henrik Otbo, Auditor General of Denmark.
• National Audit Office of Denmark. One of
our longtime partners since 1994, taking part in
both PHARE projects. Contributed a lot to our IT
system and IT audit; we were introduced to the
use of TeamMate at the National Audit Office of
Denmark back in early 2003.
• State Audit Office of Finland. Our good
partner and adviser on EU audit matters and IT
audit since 2003.
• Office of the Auditor General of Norway.
A series of seminars were offered between
1997-1998 which focused on State debt
auditing, auditing the financial accounts of
central government offices and state-owned
enterprises, which was new to us. Also, expertise
was shared regarding the auditing of electronic
data processing and understanding how IDEA
works in financial audit.
• National Audit Office of Sweden. The first
cooperation projects were in 1995-1998, and a
significant cooperation agreement was signed
in late 2000, resulting in a lot of activities during
2001-2002, among which were the auditing of EU
funds and information technology strategic issues.
The National Audit Office of Sweden became our
partner in the first PHARE project.
3. Building audit tools and instruments
Prior to joining the EU on May 1, 2004, we had
already taken steps to be prepared – the NAOL
had a legal mandate to perform audit and some
experience was shared by our colleagues on how
to do this. From then on, we had to build our
own tools and instruments, enriching the legal
framework through methodological tools, audit
support, and quality assurance instruments, as well
as forming the relevant decision-making structures
to support the audit function and to get the most
out of it.
As far as methodology is concerned, the Financial
Audit Manual was approved by the Auditor General
in October 2005, followed by the Performance
Audit Manual in February 2006, and later, the
Methodological Recommendations for IS Audit in
April 2006. These key methodological tools have
been regularly updated while the Methodological
Recommendations for IS Audit were reworked into
the IS Audit Manual approved in 2013.
Together with methodology, necessary instruments
were introduced to improve audit quality. In
September 2004, an external quality review for
audit reports was started, during which the selected
audit reports were examined and assessed against
quality criteria by independent reviewers. Later,
from 2009 each performance audit had to pass
a quality assessment before being signed. This
enabled us to remove the main mistakes, while at
the same time identifying and encouraging good
practices.
IT instruments were increasingly used to support
audit management and documentation. We have
chosen TeamMate for audit documentation, IDEA
for financial audit data extraction and analysis; IT
systems for audit management and follow-up of
audit recommendations were introduced in 20052006.
An important instrument strengthening the
accountability for audit results was Audit
Committee set up at the National Parliament in
December 2004. The Audit Committee granted
additional powers to the NAOL, while auditees
started to implement audit recommendations more
carefully.
4. Strengthening institutional processes
The next years were marked by the Public Audit
Strategy for 2006-2010.
19
“To promote accountability in the public sector, as well
as management that is oriented towards results and
public needs, and progress in financial management
and control systems” – such strategic goal was
established by the Public Audit Strategy for
2006-2010.
This goal was important, because it was aimed not
only at building internal competencies at the NAOL
to perform audit as requested by the mandate,
but also to use audit as an instrument for initiating
positive changes in the public sector.
Internal mechanisms had to be developed or
improved in order to make the office more
attractive to the Parliament, auditees, and the
general public. The NAOL was building its own
competence, applying international standards,
modern management models, or adopting best
practices.
The Strategic Planning and Risk Management
Commission, the IT Management Committee,
strategic plans at institutional and functional levels,
the annual planning and reporting obligation of all
audit and administrative units to the Council of the
NAOL were all used as everyday instruments, and
the office gained value from this.
The latest ongoing activity to be completed in a
couple of months is the introduction of a quality
management system complying with ISO 9001.
We became able to recommend that our auditees
not only comply with the legal acts, but having
used certain good practices, we were able to
talk about the benefits and risks of the practical
implementation of our recommendations. We
were no longer seen as an institution suggesting
theories, but rather as a provider of practical
examples tested in our own environment. This
enables us to acquire the trust of our auditees.
5. Measuring performance
To assure that our institutional processes are
relevant and mature and to measure their
effectiveness we used peer-reviews, selfassessments or international cooperation activities.
SIGMA experts who carried out a peer review of
the National Audit Office in 2005-2006 noted that
“the National Audit Office has become a modern and
effective authority which deserves the name of the
Supreme Audit Institution, it has developed rather
good audit approaches, and has managed to make
good use of technical assistance provided thereto.
Your positive impact in the public sector should also
be pointed out.”
Peer review team present their report in 2006
In addition to the SIGMA review, a controlled selfassessment of the IT function (activity of EUROSAI
IT Working Group) was performed in 2006 to
discover the maturity of the most significant
IT processes supporting audit and to suggest
activities for increased maturity. This lead to a
realistic IT Strategy for 2007-2011. Self-assessment
of IT audit function (another activity of EUROSAI IT
Working Group) was performed in 2007 suggesting
possible development directions for the newly
established IT audit function.
Peer reviews have become a regular practice; the
latest assessment of the NAOL is being currently
performed by the European Court of Auditors, the
State Audit Office of Finland and the Office of the
Auditor General of Norway.
6. Breaking boundaries
Public Audit Strategy for 2006-2010 was aimed
at enhancing the integration of the NAOL with
another organisations involved in auditing
activities. While at the beginning, the development
of principles for cooperation was foreseen, in the
longer run, it evolved into Cooperation Programme
for 2011-2015 between the National Audit Office
and Municipal Association of Controllers, the
Institute of Internal Auditors, the Lithuanian
Chamber of Auditors and the Ministry of Finance.
This allowed the NAOL to share audit methodology
and practice with internal, municipal, and certified
auditors.
Another aspect of integration followed the
provisions of INTOSAI Standards in Government
Auditing to “encourage its personnel to become
members of a professional body relevant to their
work and to participate in that body's activities”. The
result of this integration is that our colleague at the
National Audit Office was elected the President of
the ISACA Chapter of Lithuania.
20
10 milestones to maturity continued
Since 2008 the National Audit Office of Lithuania
has continued its cooperation with universities,
colleges, research institutes involved with or
interested in public audit. Awareness sessions at
universities during which auditors of the NAOL
deliver introductory courses about public audit
help to extend the understanding of students.
Those interested in entering the auditing profession
choose the NAOL for their internship; the most
promising are later employed by the NAOL.
7. Building competence
INTOSAI Standards in Government Auditing helped
in developing policies and procedures “to support
the skills and experience available within the SAI
and identify those skills which are absent; provide
a good distribution of skills to auditing tasks and a
sufficient number of persons for the audit”.
The NAOL has an extensive training system in
place involving initial training for all new auditors
continued later by professional development. In
most cases practical training is provided by our own
auditors who share practical experience with their
junior colleagues.
Each auditor has his or her own individual skills, and
those skills (personal or professional) are identified
and revealed. Our personnel management
practices aim at accumulating such competencies
and developing them individually. Using this
approach, each audit team may be balanced with
by incorporating those with the best professional,
methodological, and managerial skills.
The individual competence of auditors is used when
they are dealing with specific and content-related
tasks during their audits. The IS audit function
and later on, the infrastructure audit function
were adjusted to the needs of the National Audit
Office. Auditors with backgrounds and skills in the
information technology and building construction
fields are included in every financial/performance
audit, where such competencies are needed. This
allows us to compose mixed teams of auditors
possessing different professional competences
and qualifications, and audits can therefore
become more tailored and specialized. The NAOL
employs auditors with educational backgrounds
in chemistry, biotechnology, educational sciences,
and medicine; such auditors are very helpful when
performing audits in related fields.
In order to ascertain each auditor's personal skills
and to address them specifically by providing
adequate training, we have introduced a detailed
personnel assessment scheme using over a
hundred detailed criteria, which helps to identify
the precise competences of an auditor and provides
the provision for further improvement. Good
practices in personnel management are unlimited –
even an insignificant effort to put an audit team in
the same office space (and changing it as the audit
team changes) helps people to get to know each
other better, to discuss issues more openly, and to
become more efficient.
8. Trust in what we suggest
Taken together, our modern audit methods, the
maturity of our institutional processes, and our
open and competent auditors recognised within
the NAOL and beyond, culminate in creating a
powerful tool which allows us to bring our audit
recommendations to the public sector.
When undertaking performance audits, it means
that we are coming with the criteria of effectiveness
and efficiency, which are a part of good practices
or are reflected in international standards. Even if
the recommendations of global best practices are
more demanding and stringent than the current
Lithuanian legal framework, they are worthwhile
and realistic, because they have been tested in the
environment of the NAOL.
Competence in professional areas and coherent
and reliable criteria make audit recommendations
better understood and accepted by auditees. We
are appreciated more as competent colleagues
offering professional advice, rather than narrowminded clerks.
9. Enforcing legislation
The implementation of recommendations is a
way to incorporate good practices into legislation.
Initially tested by the NAOL, and then accepted
by auditees, we need to allow some time for bring
tangible benefits to the public sector to emerge.
Over time, good practices will become the norm
for the public sector, and new legislation will be
aligned to reflect the best practices. Following this
approach we are trying to identify the areas where
our recommendations can provide major benefits –
such audits are targeted not at single agencies but
at specific sectors where our advice is needed.
10. Sharing with others
Last but not least, our mission is to share our
experience with others; to test if it is applicable in
21
• Project “Support to National Budget
Transparency in the Republic of Kyrgyzstan”.
different countries and environments. Since 2011,
the National Audit Office of Lithuania has been
active as a donor, providing other Supreme Audit
Institutions with our audit approach and practical
experience gained over the years. Just to mention a
few such initiatives:
• Projects “Transitional Capacity Support
for the Public Administration of Moldova” and
"Strengthening Local Governance in Moldova"
- sharing of expertise during expert visits to the
National Audit Office.
• Project “Georgian – European Policy and
Legal Advice Centre - Phase VII (GEPLAC VII)”
- consultations, recommendations and other
expert assistance provided to the Chamber
of Control of Georgia in the following areas:
Opinion on the Draft State Budget; Opinion
on sets of financial statements and reports on
implementation of the State budget including
revenue audit; Opinion on the report on the
State-owned property; IT Audit.
• Twinning project “Audit Quality Control
in the State Audit Institution of Montenegro”
focused on establishing audit quality assurance
system.
The National Audit Office of Lithuania currently
acts as a partner conducting peer reviews at other
Sharing experiences with colleagues from the Chamber of Control of Georgia (2011), the Accounts Chamber of the Kyrgyz Republic
(2012), the State Audit Institution of Montenegro (2014) and Moldovan National Integrity Commission (2013).
Supreme Audit Institutions. In 2012, with colleagues from the Supreme Audit Institutions of Denmark,
Austria, and the Netherlands, we performed a peer review at the Supreme Audit Office of Poland. New
contacts, new challenges, different attitude of our colleagues give us a lot of useful information. Through
sharing knowledge and experience, we can increase our horizons. Sharing our knowledge means learning
together from others.
***
10 steps towards maturity is a process, but not a final result. The final result still waits ahead. Allow me to
finish with the words of Mr. President John F. Kennedy: “Things do not happen. Things are made to happen“.
Thank you to everyone who has made and continues to make things happen at the National Audit Office of
Lithuania.
Supreme Audit Office of the Czech Republic –
10 Years Together in the EU
22
Looking back on 10 years of a common journey through the
European Union
By Miloslav Kala, President of the Czech Supreme Audit Office
December 2006. Another 20 auditors at the nine
regional offices have received specific training in
the audit of EU funds. Some of our staff have also
spent some time working at the European Court
of Auditors as national experts. We are proud that,
since the Czech Republic’s accession to the EU, the
Czech Member of the Court has been Mr Jan Kinšt,
a former Member of the Supreme Audit Office, who
is currently serving his second term.
Miloslav Kala, President of
the Czech Supreme Audit
Office
What happened 10 years ago on 1 May was
undoubtedly a turning point for the Czech
Republic. Membership of the élite European club,
which, a few years earlier, had seemed almost
unattainable, has brought profound socioeconomic and cultural change. It has transformed
the life of literally each of the 10 million Czech
citizens: free movement of people, the possibility
of studying or working in other Member States,
access to the European Union’s (EU) internal
market for Czech companies and firms, thousands
of projects implemented with the support of
European funding, active participation in decisionmaking at EU level, and so on. According the
Czech Prime Minister, Bohuslav Sobotka, accession
has increased compliance with rules and the
enforceability of law, and contributed to the
country’s overall development.
It was inevitable that this profound change would
be reflected in the work of the Supreme Audit
Office. The Office’s mandate includes auditing
funds from foreign sources provided to the Czech
Republic. Based on the above powers conferred
on it, the Office audits both the Czech Republic’s
obligations vis-à-vis the revenue side of the EU
budget, and the EU funds made available to the
Czech Republic under the various policies. In
order to carry out its mandate, an independent
eight‑strong unit was formed initially in March
2005 and then developed into an independent
department with a staff of 32 top-level auditors in
The pre-accession period and, in particular, the
Czech Republic’s accession to the EU presented
the Office with a new, and vast, audit area. Indeed,
revenue from the EU budget between 2004 and
2013 amounted to more than 16 billion euro. This
challenge has had a significant impact on the
preparation of audit plans. From 2004 until the end
of September 2014 the Office’s Board adopted 85
audits relating to the EU budget and its links to the
Czech Republic, which accounts for more than onefifth of all the audits adopted.
Overview of EU budget-related audits
completed by the Office between 1 January 2004
and 20 September 2014
85
EU budget-related
audits
Other audits
310
The Office’s audits relating to EU funds cover not
only the implementation bodies, which manage EU
budget funds, but also the final beneficiaries. The
importance we attach to audits of European funds
is evidenced by the fact that their share is growing
every year, reaching a record 15 audits last year.
23
Supreme Audit Office of the Czech Republic –
10 Years Together in the EU continued
Overview of EU budget-related audits included in the Office’s audit plans
between 2004 and 2013
45
42
39
40
39
38
35
36
32
30
28
30
40
38
Total audits
EU budget-related
audits
25
20
15
15
9
10
5
3
3
2004
2005
5
6
2007
2008
10
9
2009
2010
11
7
0
2006
This increased interest on the part of the Office
in auditing European funds is not accidental. It is
grounded in rigorous risk analysis, which precedes
the drafting of the audit plan and is based on an
analysis of open sources, data from government
information systems, data from international
databases and other sources. As the Czech Republic
has persistent problems in absorbing European
funds, it was natural for the Office to focus on
this area. Indeed, since March 2012 no payment
claims have been submitted to the Commission
for any operational programmes co-financed
by the European Regional Development Fund
or the Cohesion Fund. This was in response to
the Commission’s decision not to reimburse any
payment claims for these operational programmes
because of weaknesses in the functioning of the
Czech management and control systems.
The Commission called on the Czech authorities
to adopt the remedial measures defined in an
Action Plan by the end of June 2012. The Czech
government has faced, is facing and, regrettably,
will still have to face problems with regard to
absorption of European funding, but it considers
the Office’s audit findings to be a valuable source
of information on the weaknesses in the system
for implementing European subsidies, as well as
possible remedies. For eight years now, the results
of our audit work on European funds have been
summarised and placed in a European context in
our EU Report, which is appreciated by both experts
and politicians.
2011
2012
2013
Accession to the EU and the ensuing requirements
imposed on the Czech authorities have afforded
the Office clear benefits, including, among other
things, involvement in the Contact Committee
activities, participation in the Contact Committee
working groups, the organisation of seminars for
EU Supreme Audit Institutions (SAIs), participation
in the activities of the European Organisation for
the Safety of Air Navigation (Eurocontrol) and the
European Defence Agency, the appointment of
Office representatives to the audit commission
of the European Space Agency, joint coordinated
audits with the audit institutions of other EU
Member States, as well as participation in the pilot
project for a joint audit with the ECA. All of this
not only results in lessons being learnt with regard
to the practical application of audit standards
and European audit directives, the adoption
of principles and the development of our own
methodology for auditing management and control
systems and classifying and quantifying audit
findings, or the development of a methodology for
the audit of EU co-financed investments, but also in,
for example, improvement of the auditors’ language
skills and the enhancement of their proactive
approach.
Looking back over 10 years we can say that we
are no longer newcomers to the field of European
audit, trying to find our feet and keep up with
our colleagues from the countries of the former
EU-15. Over many years of intensive international
cooperation we have been able to learn how both
Supreme Audit Office of the Czech Republic –
10 Years Together in the EU continued
the audit institutions of other European countries
and the ECA carry out their audit work. While some
of the observations and lessons were an inspiration,
and others a warning to us, we became convinced
that we are at least as good as our partners in many
areas.
A significant challenge as regards our future work
is, for example, the European Parliament resolution
of February 2014 aimed at greater integration of
the work of SAIs and the ECA, and the involvement
of SAIs in the discharge procedure under
shared management. We are involved in intense
discussions with our partners on this matter, as, for
example, was recently the case at the meeting of
the SAIs of the V4+2 countries (the Czech Republic,
Hungary, Poland, Slovakia, Slovenia and Austria)
held in September 2014 in Austria. Discussions
concerning increased cooperation between
national SAIs and the ECA are expected to continue
at the Contact Committee meeting due to be held
in October in Luxembourg.
We would also like to continue to develop our
quality team of experts in the audit of EU funds
which, by its very nature, is not an easy domain.
We want to produce high-quality output from
our audits, thus contributing to both sound
management of the EU budget and effective and
efficient use of EU funds. An important role will
of course be played by continuing international
cooperation across the EU, which helps to maintain
the high quality of our work.
When the Czech government applied to join
the EU on 17 January 1996, it wrote in its
memorandum that the EU is a creation that “has
guaranteed the citizens of its Member States peace,
political stability, positive international relations,
unparalleled freedom and economic prosperity over
many decades”. It was therefore natural to aspire
to become part of this community. The road to
achieving this was winding, and sometimes thorny,
but eventually led to success. The Accession Treaty
was signed in April 2003 in Athens, and in the
referendum of June 77% of voters voted in favour
of joining. On 1 May 2004 the country became a
member of the EU; it was full of enthusiasm and
expectation, but also concern. Although the matter
of evaluating recent history is always a tricky
business, on behalf of the Supreme Audit Office
I shall risk doing so and state that, despite some
expectations that have not been met and concerns
that have proved to be founded, the gains have
outweighed the losses and EU membership has
greatly enriched us. We are privileged to be part of
an integrated European union.
24
Special Report N° 13/2014
EU support for rehabilitation following the
earthquake in Haïti
25
Interview with Piotr Zych, team leader
By Rosmarie Carotti
This report was presented on 23 September 2014 to the press by Hans Gustav Wessberg,
ECA Member
Protection department (ECHO). ECHO was already
active in the country before the earthquake, as
Haiti was in a protracted humanitarian crisis due to
its fragile situation, recurrent tropical storms, and
environmental degradation. Projects financed by
ECHO focused on the delivery of water and food,
construction of temporary shelters and sanitation
facilities.
Piotr Zych, team leader
R. C.: The earthquake happened in 2010. What
was the response of the EU and why is this the
right time to publish the audit?
Piotr Zych: The earthquake of magnitude 7.0 which
hit Port-au-Prince and its surroundings on 12th
January 2010 killed about 230 000 people and left
1.3 million homeless. As it happened in a densely
urbanised area, the earthquake destroyed over
100 000 houses, most of the capital’s hospitals,
public administration buildings, schools, but also
water pipelines and roads. Soon after the disaster
a cholera epidemic broke out and spread rapidly
due to poor sanitary conditions. The most urgent
humanitarian needs included the provision of
water, food, medical supplies, ambulant treatment
and shelters.
The international response was immense.
Several hundred organisations, including NGOs,
international organisations and state agencies
sent their help. The UN launched a so called “flash
appeal” and gathered almost 600 million USD in
just 72 hours. The US army also established a strong
presence in Port-au-Prince.
The EU was delivering relief support through the
European Commission's Humanitarian Aid and Civil
Following the first phase of emergency assistance,
which focused on saving lives and livelihoods, both
ECHO as well as EuropeAid – Directorate-General
for Development and Cooperation - engaged
in activities aimed at the rehabilitation of the
country. To this end, the Commission reviewed
its development cooperation strategy with the
country, which resulted in a change in the allocation
of resources and additional financial means, mostly
for urban reconstruction and general budget
support. Furthermore, disaster risk reduction
became a crucial element of the efforts to increase
country resilience – the ability of communities and
state institutions to cope with future disasters.
We carried out the audit work 3.5 years after the
disaster – just enough time to see reconstruction
results. But the rehabilitation of the country is far
from finished. I think the timing of the audit was
well-chosen, enabling us to see the outputs and
delayed projects, and to assess the main factors
limiting the effectiveness of support.
R. C.: The report is indeed about rehabilitation.
Does that mean that you did not audit
humanitarian aid given as a first response to
Haiti? And what is rehabilitation?
Piotr Zych: Rehabilitation operations are processes
which aim at stabilising the economic and social
situation by helping the country to rebuild
infrastructure (including houses), improve provision
of social services and reinforce institutions.
Successful rehabilitation should permit a decent
transition towards development cooperation
and restoration of conditions for sustainable
Special Report N° 13/2014
EU support for rehabilitation following the earthquake in Haïti
continued
development in the long run. All those phases
– relief, rehabilitation and development - are
interconnected in a sense that every phase should
build upon the achievements of the preceding
phase and enable transition to the next one. In
our audit we focused on rehabilitation, but also
assessed the link between short-term and longterm assistance.
Let me give you two examples: humanitarian
assistance should fulfil immediate needs for food,
among others. Shipment of food from donor
countries is rapid and beneficial but also has side
effects – it destroys local markets and harms local
producers. Cash-for-work activities on the other
hand enable the restoration of local markets and
drive agricultural production. The next step would
be the development of agricultural production
capacity. In the long run this would result in
increased food security of the country.
Programmes designed to reconstruct damaged
neighbourhoods should not only result in the
restoration of pre-disaster conditions, but in
enhancing employment or transportation
possibilities, thus laying foundations for the lasting
development of these neighbourhoods.
R. C.: To whom was the EU money given for that,
to the government? Did you evaluate corruption
in this context?
Piotr Zych: In the three years after the earthquake
the EU committed over €400 million from the
European Development Funds, thematic budget
lines, ECHO and Instrument for Stability. The
implementation of individual programmes is
entrusted to aid partners – usually NGOs or
international organisations.
In case of budget support the amounts are
disbursed in tranches directly to the State’s
budget. The two audited budget support
programmes, totalling €47 million, aimed to
support government’s action plan for postdisaster reconstruction and its growth and poverty
reduction strategy.
Corruption was assessed as a risk for sound financial
management in the preliminary study and at the
planning stage of the audit. It turned out to be one
of the main reasons for most donors to withdraw
from the agreed budget support programme.
This had an impact on the implementation of
26
safeguard measures improving financial controls at
the treasury level, which led to one of the Court’s
findings.
R. C.: Was the choice of the NGOs good?
Piotr Zych: The picture is mixed. We audited
projects, where NGOs were selected on the basis of
their prior experience in a given neighbourhood.
Knowledge of local circumstances and
interdependences, and trust of the local population
seem crucial to successfully implementing a project.
On the other hand, some of the implementing
partners lacked in-country experience, linguistic
skills, and technical capacity or just underestimated
the challenges of working in a post-disaster
environment in a fragile country.
R. C.: In the special report you say that the
design of the aid by the Commission was good
but the implementation not. Why?
Piotr Zych: Immediately after the earthquake
Commission experts assessed multi-sector needs.
This was the basis for EU response programmes,
agreed with the three main EU Member States most
active in the country – France, Germany and Spain.
EU support for rehabilitation was channelled to
priority areas – housing and urban rehabilitation,
water, sanitation and hygiene, health, food security
and education. At the same time however, wider
development needs were agreed on with the
Haitian government and also followed. The main
project in this area was the construction of a road
connecting Port-au-Prince with the central region
of Artibonite and the North of Haiti – an important
investment for the development of agriculture in
the country.
Problems with the implementation led to delays
of the majority of, and limited results of three
out of, thirteen audited programmes, including
the financially most important macroeconomic
stability support programme. We identified
several reasons: insufficient management and
mitigation of identified risks, lack of experience and
awareness of local constraints such as cumbersome
administrative procedures and insufficient technical
expertise in the supported areas. The Commission
was aware of most of the risks, but did not take
proper measures to address them.
27
Complex coordination mechanisms and the
collapsed institutional capacity of the Haitian
administration were also hindering factors. Lack of
land registry in the country is a prominent example.
Lastly, monitoring of the implemented actions
was not fully effective. The Commission and the
European External Action Service did not send
sufficient staff with relevant skills and experience in
the critical phase following the earthquake.
R. C.: Was there also a part of budget support in
the rehabilitation aid?
Piotr Zych: The earthquake hit the part of
the country with the highest concentration
of economic activity. It led therefore to an
extraordinary fall in public revenues. Major donors
agreed on the budget support to the Haitian
government over two years to finance critical
expenses such as the salaries of civil servants and
police and the operation of schools and hospitals.
It was also aimed to support the implementation
of the government’s action plan for postdisaster reconstruction. The EU budget support
programme was already planned under the 10th
EDF cooperation strategy for the period 2008-2013,
but was increased by €29 million following the
earthquake.
The donors agreed a set of control measures
to be developed to safeguard the assets and a
priority action plan for reforms of public finance
management. However, this complementary
assistance failed to achieve the progress intended.
The main challenges were insufficient political
will from the government and weak support from
the parliament. However, we also found out that
the monitoring of progress of the reform was not
consistently carried out and that the EU delegation
lacked specific competence in the area of economic
governance. As a result, some international donors
decided to withdraw. The Commission disbursed
the first payments, but also had to withhold
the support. Prospects to end the deadlock are
currently uncertain.
R. C.: What was the role of the delegations of the
Commission?
Piotr Zych: The EU delegation is responsible,
among others, for country strategy development,
political dialogue with the government,
contract assignment and monitoring of projects
implemented by implementing partners – usually
NGOs or international organisations. However,
during the earthquake the EU delegation in Portau -Prince was likewise severely affected. One
person died, the Head of Operations needed
hospitalisation outside the country. The building
in which the EU had its offices was unsafe – files
and equipment were damaged or got lost. Nearly
all staff was evacuated – to Brussels or to the
Dominican Republic.
The main challenge for the EU Delegation was
therefore to restore a proper functioning of the
office as quickly as possible in order to assess
the damages and support needs, and to start
rehabilitation programmes. It was pretty obvious
from the beginning that it couldn’t be done
remotely – from the headquarters or Santo
Domingo. Some officials returned, but for the
next three years the Delegation remained heavily
understaffed. DG DEVCO officials, beside their
usual work, were assigned with tasks of other
services (like the Instrument for Stability). Many
important functions were not occupied or occupied
by persons without an adequate background. In
addition, there was high fluctuation in the post
of the Head of Delegation, with long periods in
between without an appointment. This was an
important factor influencing the quality of political
dialogue (e.g. on the public finance reform) but
also of the implementation of programmes. In that
respect, in the report, we pointed to the lack of
timely measures taken by the headquarters.
R. C.: What is the value of this report for the
future?
Piotr Zych: The main focus of the audit report is put
on the link between the short-term humanitarian
assistance and long-term rehabilitation and
development efforts. The effectiveness of aid in
cases of future disasters shall be increased by taking
into consideration long-term objectives at the early
phases of support, by increased coherence between
different instruments available, and by improved
modes of cooperation between EU actors – mainly
DG DEVCO and DG ECHO. The report also prompts
the Commission to establish a common strategy
between both DGs and to set their respective
responsibilities and handover procedures.
The audit report urges the Commission to better
design the interventions and coordinate the efforts
and calls for the implementation of measures for
Special Report N° 13/2014
EU support for rehabilitation following the earthquake in Haïti
continued
emergency staff redeployment. Its impact therefore
goes beyond the case of Haiti.
The improvements described in the audit report are
supposed to improve the quality and pace of aid
programmes and therefore have a direct impact on
living conditions of people hit by future disasters.
R. C.: What was the main problem for you in
auditing the EU Commission?
Piotr Zych: I think the main difficulty in auditing the
Commission was to assess, to which extent audited
programmes’ failures were due to challenging
circumstances and to where the Commission
could do better. Our interlocutors consistently
underlined the difficulties they face in Haiti. It was
a fragile state already before the earthquake, with
barely functioning administration, huge social
problems and poverty. The fact that it was the
first urban disaster on such scale required even
from experienced humanitarian and development
actors a lot of imagination to solve problems they
had never encountered before. Another difficulty
was linked to the number and diversity of aid
organisations, some of them being hostile towards
each other. The coordination of the assistance
under such circumstances is no easy challenge.
I believe nevertheless, that we succeeded in
producing a balanced audit report, in which the
Commission’s services are criticised for what is in
their hands and given credit for its achievements.
Mr Wessberg, the reporting member, in the press
conference launching the report said that despite
the criticism “a helluva lot of good” has been done.
I can only agree.
R. C.: How did the Commission react to our
report?
Piotr Zych: The Commission underlined the
difficult context but accepted all of the Court’s
recommendations. It stressed that it implemented
some programmes despite the inevitable risks
in order to contribute to the wellbeing of the
population.
The Commission confirmed that the link between
the short-term assistance and long-term
development aid will be assured in the newly
developed resilience agenda, which follows the
objective to better prepare countries for future
disasters. As concerns budget support and reforms
of the public finance the Commission pointed at
the newly developed instrument of intervention
28
known as a ‘state building contract’ which should
be better adapted to fragility and crisis or post-crisis
situations. Finally, the European External Action
Service established in the meantime provisions
for emergency personnel redeployment. The EU
delegation in Haiti has been reinforced with 11 new
posts.
R. C.: Are there still EU funds given to Haiti by
the Commission in 2014? How long is the aid
scheduled to last?
Piotr Zych: The rehabilitation of the country is thus
far not finished. By the end of 2013 over 200 000
people were still living in tented camps. None
of the administration buildings have been fully
reconstructed yet. Development of the land registry
– crucial for the development of the country – will
take years or even decades. Therefore the EU will
continue its support to Haiti and has foreseen €420
million for the period 2014 – 2020.
From left to right: Peter Eklund, private office attaché of Wessberg,
Hans Gustav Wessberg, ECA Member, Piotr Zych, team leader,
Damijan Fišer, press officer
Special Report N°15/2014
Between external borders and internal solidarity:
The special report on the External Borders Fund1
29
By Katharina Bryan, team-leader
This special report, published on 8 October 2014, was produced by
Chamber IV. Louis Galea is the Member responsible for the report, Paul
Stafford is the Head of the CD4 PRF unit, and Katharina Bryan was the
team leader.
borders through the External Borders Fund (EBF).
The EBF aims to establish financial solidarity
between Member States3 by supporting those
for which the control of the EU’s external borders
represents a heavy burden. In total, € 1.9 billion
were available from the EBF for the 2007–2013
period.
From left to right: Paul Stafford, head of unit; Jurgen Manjé,
auditor;
Louisexternal
Galea, reporting
ECA Member;
Jacques Sciberras,
Between
borders
and internal
head of private office of Galea; Katharina Bryan, team leader;
solidarity: The Special
report on the External
Wayne Codd, auditor;
absent : Tim Upton, auditor
1
Borders Fund
Whether we are on business or private travel,
most of us nowadays take for granted that we are
able to travel without time-consuming checks
when crossing borders between the 26 Schengen
countries.2 At the same time, this ease of travel
resulting from the end of internal border controls
on persons, which started nearly 30 years ago in
Schengen, means that the security of the external
borders of any one state can affect us wherever we
are in the Schengen area.
How does the EU support external border
management?
Schengen States are responsible for controlling
their borders according to commonly agreed rules
(the Schengen acquis) and most related costs are
financed nationally. The EU supports current and
prospective Schengen States to ensure uniform,
effective and efficient controls at the external
The EBF was established as part of the “General
programme on Solidarity and Management of
Migration Flows for the period 2007-2013” run
by the Commission’s Home Affairs DG. Two funds
of the programme, namely the European Fund
for the Integration of Third-Country nationals
and the European Refugee fund, had already
been the subject of an ECA performance audit4.
For the financial period 2014-2020, the EBF has
been integrated into the Internal Security Fund
instrument (ISF-Borders). By auditing these three
SOLID funds in the run up to 2014, the Court was
able to provide input into the new legislative
framework and the management of the new funds.
What was the focus of the audit?
The audit focused on whether the EBF has
contributed effectively to external border
management. Since most of the Fund is run under
shared management with the Member States,
auditing the latter’s management of the EBF was
fundamental to answering the audit questions.
Greece, Spain, Italy, Malta and Poland were chosen
for on-the-spot visits, representing 55% of the total
EBF allocation. In addition, the audit included the
parts managed directly by the Commission such as
emergency actions5.
3 Based on established practice in this area, the term “Member
fostered financial solidarity but requires better measurement of
results and needs to provide further EU added value”.
States” in this article refers to countries participating in the EBF,
regardless of whether they are EU Member States or Associated
States.
2 The Schengen area currently consists of 22 EU Member States
4 SR 22/2012 “Do the European Integration Fund and European
1 Special Report No 15/2014“The External Borders Fund has
(Belgium, Czech Republic, Denmark, Germany, Estonia, Greece,
Spain, France, Italy, Latvia, Lithuania, Luxembourg, Hungary,
Malta, Netherlands, Austria, Poland, Portugal, Slovakia, Slovenia,
Finland and Sweden) and four Associated States (Iceland,
Liechtenstein, Norway and Switzerland).
Refugee Fund contribute effectively to the integration of thirdcountry nationals?”
5 Community actions, which include Emergency actions, and so-
called Specific actions designed to address specific weaknesses at
external borders
Between external borders and internal solidarity: The Special
report on the External Borders Fund continued
30
What challenges did the audit face?
Fixed wing maritime patrol aircraft co-financed by the EBF to
enhance the border control capabilities of the Armed Forces of
Malta (© Armed Forces of Malta)
Did Frontex play a role in the audit?
The European Agency for Management of
Operational Cooperation at the External Borders
(Frontex) coordinates Member States’ operations at
border areas under significant migratory pressure,
performs risk analysis and supports border guard
training. While it is not financially supported by the
EBF, Frontex is relevant to the Fund’s effectiveness
by providing risk analysis for the annual calculation
of the Fund’s allocation to the Member States and
identifies specific weaknesses at border points
which should be addressed by the so-called EBF
“specific actions”. Moreover, EBF-funded equipment
can be used by Member States to participate in
Frontex missions. Therefore the auditors visited the
agency, even though Frontex was not an auditee as
such.6
One of the first questions “the woman on the bus”
would ask would probably be whether the EBF has
made the borders safer. However, this question is
extremely difficult to answer due to the loose (or
non-existent) cause and effect relationship one
encounters for border measures. For example, is the
fact that fewer irregular migrants are encountered
due to the EBF-funded patrol boats or due to the
changed political situation in a neighbouring
country. Direct measurement of results was not
considered feasible within the audit. Hence,
reliance was to be placed on Member States’ and
Commission’s evaluations – which were found to
have serious deficiencies.
The audit also provoked interesting discussions
on the concept of EU added value and how
to operationalise it in the context of the EBF.
For example financial solidarity can be seen
to constitute added value per se but should
EU involvement trigger more than a mere
reimbursement of costs.
Why was there co-operation with the EU agency
for fundamental rights (FRA)?
The EBF’s objectives are to be achieved with the
principle of respectful treatment and dignity. The
audit team successfully cooperated with FRA and
was able to benefit from work undertaken in the
agency.7 One of the more striking findings of the
report was the detection of the EBF co-funding of
a temporary detention centre in Greece which did
not comply with fundamental rights.
Temporary detention centre in Greece
6 Chamber IV carries out the financial audit of Frontex as part of
its special annual reports on EU agencies.
7 See, for example, the report “Protecting fundamental rights at
the EU sea borders” (Fundamental Rights Agency, 2013)
Three EBF co-financed class 300 all-weather vessels of the Italian
Coast Guard operating from Lampedusa, Italy
What were the results of the audit?
The audit found that the EBF has contributed to the
external border management of the EU and that it
has fostered financial solidarity between Member
States. However, further EU added value was limited
and the overall result could not be measured
due to weaknesses in the responsible authorities'
monitoring and serious deficiencies in the ex post
evaluations by the Commission and the Member
States.
The auditors found serious weaknesses in
management of the fund in key Member States
(Greece, Spain, Italy and, for the early funding
years, Malta). These weaknesses lead to the risk
that border management is not adequately
strengthened where it is most needed. Low
implementation in some countries limited the
31
fund’s effectiveness. Furthermore the fund’s links
with Frontex operations need to be improved.
What are the recommendations from this audit?
Our recommendations concern both the
Commission and the Member States. We underlined
the importance of the availability and timeliness
of information on overall results of the Fund. While
some of these recommendations have been taken
account of in the new legislation, it will remain to
be seen whether in the practical management of
the Fund monitoring and evaluation will indeed
be improved. We also recommend concrete steps
to increase the EU added value of the Fund such
as by strengthening the its link with Frontex or by
funding common application centres and other
forms of consular cooperation rather than the
renovation, adaptation or equipping of consulates.
For a video on the report see:
http://youtu.be/HlwXmTbg4Jc.
Comment by Louis Galea, the ECA Member
responsible for the report “The EBF has
helped Member States in their task of managing
the EU's external borders, but the Commission
and Member States have to improve the Fund`s
operation so that the EU taxpayers' money
can be used more effectively in assisting the
management of our external borders whilst
continuing to support financial solidarity.”
An EBF co-financed cabin on the Spanish-Moroccan border in
El Tarajal, Ceuta
E
FOCUS
A
32
Focus
XIVe séminaire sur la Cour des comptes européenne et le contrôle des
fonds de l’Union organisé à l’intention des auditeurs des organes de
contrôle externe espagnols, 25 et 26 septembre 2014
Par le Cabinet de M. Tomé Muguruza
auditeurs ainsi que la visite de la Cour de justice et
de la BEI contribuent à donner une vue d’ensemble
du travail de l’Union.
Le jeudi 25, MM. Tomé Muguruza et Ruiz García,
Secrétaire général, ont ouvert le séminaire par
quelques mots de bienvenue. MM. Costa de
Magalhães et García de Parada (respectivement
Chef et Attaché de cabinet de M. Tomé Muguruza)
ont ensuite débuté la journée par une présentation
générale de notre institution.
En septembre dernier, le cabinet de M. Tomé
Muguruza, Membre de la Cour, a accueilli des
auditeurs de la Cour des comptes d’Espagne et des
organes de contrôle externe espagnols pour son
séminaire annuel consacré à l'importance des fonds
européens et à leur contrôle, fondé sur un échange
d’informations concernant les méthodes de travail
de notre institution.
Le séminaire a pour objectif de faire connaître le
travail de la Cour des comptes et des institutions
européennes. La participation de nos collègues
In November 2014 the Court says:
Mmes Aurelia Petliza (Auditeur) et Sabine HiernauxFritsch (Chef d’unité) ont successivement présenté le
contrôle des fonds pour l’agriculture et les audits sur
l’aide extérieure accordée par l’Union.
L’après-midi s’est poursuivi par le traditionnel cas
pratique, dirigé par MM. Costa de Magalhães,
Gonzalez Bastero (Chef d’unité) et Garrido Lestache
(Auditeur).
Vendredi 26, la matinée a été consacrée à la visite de
la Cour de justice et de la BEI. M. Tomé Muguruza a
clôturé la séance en remerciant les participants pour
leur fidèle participation à ce séminaire.
Hello to:
Goodbye to:
DANIELESCU Dan
FERRARIS Andrea
KERNHe lmut
KLINDZANS Maris
MANZANAL RUIZ Rodrigo Vicente
MEIJERS Derek
PYPER Michael
VAN BREEKarlijn
DEBLONDE VALLET Marie
ELENKOVA Daniela
WITTEMANN Markus
DELVAUX Michael
Board of the AIACE
We have the pleasure to announce that in September Dr Hendrik Fehr, former ECA director and
Ms Renata Fackler, former head of the German translation service in the ECA were both elected into the Board
of the AIACE, the organisation of former EU officials. Dr Hendrik Fehr was elected President and Ms Renata
Fackler took over the responsibility of the Newsletter.
E
FOCUS
A
Focus
Special Report N° 14/2014
33
How do the EU institutions and bodies calculate, reduce
and offset their greenhouse gas emissions?
For the European Union’s climate policy to be credible, the EU
institutions and bodies need to be at the cutting edge in designing and
implementing policies to reduce their own greenhouse gas emissions.
This special report examines how the EU institutions and bodies are
tackling the challenge to contribute to the Union’s 2020 goal of at least
a 20 % reduction in its emissions compared to 1990 by mitigating the
impact of their administrative operations on the environment.
This special report was published on 15 October 2014 and is available on
our website: www.eca.europa.eu
Special Report N°15/2014
The External Borders Fund has fostered financial solidarity
but requires better measurement of results and needs to
provide further EU added value
The aim of the External Borders Fund (EBF) is to help Member States
ensure uniform, effective and efficient controls at their common external
borders.
The Court’s audit examined the EBF’s effectiveness and the achievement
of its objectives.
The Court found that the EBF has fostered financial solidarity by
concentrating assistance on Member States who bear a heavier financial
burden.
However, further EU added value was limited, and the overall result
could not be measured due to weaknesses in monitoring and ex post
evaluations. Furthermore, the audit found serious weaknesses in the
management of the fund in key Member States, which might mean that
border management is not adequately strengthened where it is most
needed (see page 29).
This special report was published on 8 October 2014 and is available on
our website: www.eca.europa.eu
Special Report N°16/2014
The effectiveness of blending regional investment facility
grants with financial institution loans to support EU
external policies
The Commission and the Member States have set up eight regional
investment facilities tosupport EU external policies. These investment
facilities aim at pooling together (blending) grants provided by the
European Commission with loans from financial institutions. They
contribute to finance key infrastructure projects that require considerable
financial resources. The Court examined the effectiveness of
blending EU grants with loans from financial institutions.
The Court concludes that this blending has been generally effective.
The regional investment facilities were well set up but the potential
benefits of blending were not fully realised. The Court makes a
number of recommendations for the Commission that concern project
selection and grant approval, disbursement of funds, monitoring of the
implementation of EU grants, and enhancing the visibility of EU aid.
This special report was published on 22 October 2014 and is available on
our website: www.eca.europa.eu
E
SOCIAL
A
34
ECA Social
Reception at the ECA for the national karate team of Cyprus
The first Karate championship of the Small States of
Europe, held in Luxembourg from 19 to 21 September
2014, was a success for the national karate team of
Cyprus, achieving the second place in the overall
ranking, with Luxembourg coming first. Mr Lazaros S.
Lazarou, ECA Member, hosted a reception in honour
of the Cyprus delegation on 21 September 2014 at
the ECA’s premises in Luxembourg.
Lazaros S. Lazarou, ECA Member, Andreas Vasiliou, President
of the Cyprus Karate Federation, Eduardo Ruiz Garcia, ECA
Secretary-General
Mr Lazarou said “The ECA, in addition to its
contribution to European citizens through its audit
work, is pleased to have the opportunity to contribute
through other fields such as supporting sports. Sports
build character and provide tools and experience which
are useful in the track of life.
I personally became witness and I took lessons on
this character building from the brave attitude with
which Christos and Simonas faced their injury at
the championship, and from the selflessness of their
colleague Anna and Niki, mother of another athlete
and a nurse by profession, who both chose to be with
the injured athletes in hospital rather than staying at
the championship games. Anna missed her award
ceremony and Niki missed the
participation of her daughter in the
finals and subsequently her award
ceremony.
The young generation is the future
of a country and the future of
Europe. A big bravo to Andreas
Vasiliou and his associates in the
Cyprus Karate Federation and the
Olympic Committee for what they
have achieved together with the
young athletes and the support of
their parents.“
Mr Lazarou concluded by
thanking the ECA and its services
for making the reception
possible.
La certification du service d’audit interne de la
Cour des comptes européenne
35
Par Rosmarie Carotti
Entretien avec Meletios Stavrakis, auditeur interne de la Cour à l’occasion de
la nouvelle certification du service de l’audit interne de la Cour des comptes
européenne
Le 1er octobre 2014
R. C. : Qui fait la révision des standards utilisés
pour les évaluations des services d’audit
interne?
Meletios Stavrakis : Au sein de l’Institut des
auditeurs internes (IIA) il y a des groupes de travail
spécifiques qui examinent les propositions de
modifications des standards et des guidelines. Ces
propositions sont ensuite discutées au niveau du
comité exécutif puis elles sont adoptées.
Iliana Ivanova, ECA Member, Vítor Caldeira, ECA President,
Meletios Stavrakis, head of unit, Laurent Berliner, Partner in
Deloitte Luxembourg, Augustyn Kubik, ECA Member
R.C. : Monsieur Stavrakis, la certification du
service d’audit interne de la Cour vient d’être
renouvelée. Elle avait été octroyée pour la
première fois en 2009 pour une durée de cinq
ans.
Meletios Stavrakis : En effet, le standard 1312 des
« standards pour la pratique professionnelle de
l’audit interne » établit que : afin d’obtenir
et/ou maintenir la certification, le service d’audit
interne doit être en conformité avec les normes
internationales. Une telle évaluation doit être
effectuée tous les cinq ans (une première
évaluation avait déjà été réalisée en 2009).
Depuis ma nomination en tant qu’auditeur interne
en 2010, mon engagement a donc été d’assurer
le maintien de cette certification mais également
d’améliorer notre niveau de performance en
accord avec les recommandations émises par les
évaluateurs en 2009. Ces deux objectifs ont été
atteints et la certification de l’audit interne a été
renouvelée pour une période de cinq ans.
En tenant compte de l’évolution du rôle de l’audit
interne au sein des organismes privés et publics,
le défi pour notre service est de rester à jour et de
pouvoir s’adapter aux nouvelles exigences.
Plus de 40 contrôles clés se référant aux standards
« attribute » et « performance » sont régulièrement
évalués et révisés si cela est jugé nécessaire par les
groupes de travail de l’IIA. Les évaluations de qualité
des services d’audit interne portent essentiellement
sur le respect de ces standards et contrôles clés mis
en place.
R. C. : Pourriez-vous nous expliquer pourquoi la
Cour des comptes européenne qui fait autorité
en matière d’audit externe a besoin de la
certification d’une firme d’audit privée en ce qui
concerne la qualité d’un de ses services ?
Meletios Stavrakis : Le service d’audit interne a
été créé à la Cour en 2003 suite à la révision du
règlement financier de 2002 qui établissait que
chaque institution devait se doter d’un service
d’audit interne.
Le rôle de l’auditeur interne est principalement
d’assister l’institution dans l’accomplissement de
ses objectifs. Il émet principalement des rapports
d’audit accompagnés de recommandations qui
visent à l’amélioration des procédures internes et à
la mise en place d’une gestion à risques.
Afin qu’une certification de l’audit interne soit
indépendante, elle doit être conduite par des
sociétés externes qui sont des professionnels de
l’audit et qui sont habilités à réaliser ce type de
révision. Dans le cadre de notre certification, le
service d’audit interne a effectué un appel d’offre et
c’est la société Deloitte qui a été choisie sur base du
rapport qualité/prix de sa proposition.
La certification du service d’audit interne de la Cour des
comptes européenne continued
R. C. : Dans quelle mesure le fait de payer la
société Deloitte pourrait avoir un impact sur la
qualité de la certification?
Meletios Stavrakis : Ceci n’a aucun impact. Comme
indiqué précédemment pour qu’une société puisse
conduire une révision et accorder une certification,
elle doit être habilitée à le faire. Cette habilitation
n’est accordée que suite à une série de vérifications
faite par l’institut des auditeurs internes (IIA) sur le
respect de la méthodologie et des critères suivis par
ces sociétés pour effectuer des révisions et émettre
des certifications.
Il est important de noter également que certains
services d’audit interne se sont vus refusés la
certification ou bien que celle-ci a été conditionnée
à la mise en œuvre d’une série d’améliorations.
Dans ce contexte il est intéressant de rappeler
que l’IIA dont le siège est au États-Unis est une
institution mondiale qui compte de nombreux pays
membres et un très grand nombre d’adhérents. À
ce titre, tous les auditeurs du service d’audit interne
de la Cour ainsi que moi-même, sommes affiliés à
l’IIA Luxembourg.
R. C. : Quel est le coût d’une certification ? Et
quelle est son utilité pour l’image de la Cour des
comptes européenne ?
Meletios Stavrakis : Le coût peut varier en fonction
de la nature de l’organisme faisant l’objet de la
révision, du nombre d’employés de la société révisé
et également du type de révision souhaitée. La Cour
a demandé une révision complète. Il est évident
que le coût d’une révision similaire au Parlement
européen ou à la Commission serait très différent.
La Cour est une institution reconnue au niveau
international et qui adhère à une série de normes
internationales d’audit. Le service d’audit interne
doit se situer au même niveau de qualité. La
certification est en quelque sorte une garantie de
la qualité des services offerts par la fonction d’audit
interne à la Cour. Il s’agit d’une assurance qui
s’ajoute à la reconnaissance de nos interlocuteurs et
audités à la Cour.
R. C. : Il y a récemment eu une révision de
règlement financier de l’UE. A-t-elle touché au
rôle de l’auditeur interne ?
Meletios Stavrakis : Le règlement financier révisé,
comme le précédent règlement, ont maintenu le
36
rôle et les compétences de l’auditeur interne au
sein des institutions de l’union européenne. Son
action ne se limite pas uniquement à un droit
de regard à posteriori des effets de la gestion de
l’institution mais elle vise également à contribuer à
l’amélioration de l’efficience des travaux de la Cour.
R. C. : Comment vos collègues voient-ils votre
rôle ?
Meletios Stavrakis : Tout d’abord le rôle de
l’auditeur interne n’est pas d’intervenir dans la
gestion mais d’informer les gestionnaires sur
les risques qui pourraient avoir un impact sur la
réalisation des objectifs fixés par le Traité et dans la
stratégie de la Cour. Dans ce contexte, je pense que
nos collègues, ainsi que le management de la Cour
ont toujours eu une appréciation positive de mes
travaux en tant qu’auditeur interne ainsi que du rôle
de l’IAS dans le contexte de la gouvernance de la
Cour.
R. C. : À qui vous, et votre comité d’audit, vous
adressez-vous ?
Meletios Stavrakis : Comme ceci est établi dans la
« Charte pour la fonction d’audit interne » ainsi que
dans les « Règles et procédures de fonctionnement
du comité d’audit interne », l’auditeur interne
reporte directement au comité d’audit interne.
Après discussions entre l’auditeur interne et
le comité d’audit interne lors des réunions
périodiques, l’auditeur interne communique ses
rapports au Président, à l’ordonnateur délégué ainsi
qu’à ceux qui sont chargé de la mise en œuvre des
recommandations.
37
Journée de la traduction 2014
Cour des comptes européenne, 30 septembre 2014
Par Veronica Ardelean, chef de l’unité roumaine de traduction
aux décideurs politiques et aux gestionnaires de
fonds européens, la Cour a besoin de faire entendre
sa voix de la manière la plus claire possible. C’est là
qu’intervient la traduction : en tant que premiers
lecteurs des rapports de la Cour, les traducteurs
aident à identifier les éventuelles ambiguïtés ou
maladresses dans les textes, contribuant ainsi à
la qualité des produits délivrés par la Cour. Plus
important encore, à travers la traduction, les
documents de la Cour deviennent accessibles dans
tous les États membres de l’UE et à tous les niveaux
de la société.
Claude Hagège, professeur honoraire au Collège de France,
linguiste et écrivain, Vítor Caldeira Président de la Cour des
comptes européenne, Gailé Dagiliené, Directrice de la traduction
À l’occasion de la Journée internationale de la
traduction, qui est célébrée dans le monde entier
le 30 septembre, la Direction de la traduction de
la Cour des comptes européenne a organisé un
événement consacré à cette journée. Nous avons
ainsi eu l’honneur d’avoir comme invité M. Claude
Hagège, professeur honoraire au Collège de France,
célèbre linguiste et écrivain français, auteur de
nombreux volumes parmi lesquels on peut citer
L’Homme de paroles, Dictionnaire amoureux des
langues ou Contre la pensée unique.
L’événement a été un véritable succès, réunissant
près de 200 participants. Il a été ouvert par M.
Vítor Caldeira, président de la Cour des comptes
européenne, qui a ensuite donné la parole au
professeur Hagège. L’intervention de M. Hagège
a été suivie d’une courte allocution de Mme Gailė
Dagilienė, directrice de la Direction de la traduction,
l’événement étant clôturé par un quiz linguistique
au cours duquel les participants ont pu tester
leurs connaissances en matière de langues et de
traduction.
Dans son discours d’ouverture, M. Caldeira a souligné
l’importance de la traduction en tant que moyen
de communication entre les peuples de l’Europe.
Grâce à la traduction, l’Union européenne est plus
proche de ses citoyens et se fait comprendre dans
son message politique et démocratique. Quant à
la Cour des comptes européenne, bien qu’elle ne
soit pas un organe législatif ou judiciaire, son rôle
dans le paysage institutionnel européen est de
la plus haute importance. Appelée à fournir une
assurance concernant la manière dont l’argent des
contribuables est dépensé et à offrir des orientations
L’intervention du professeur Hagège nous a
transportés dans le territoire fascinant des
langues, dans un voyage à travers les continents
et les cultures. Polyglotte célèbre, ayant des
connaissances dans une cinquantaine de langues,
parmi lesquelles l’italien, l'arabe, le mandarin,
l'hébreu, le russe, le persan, l'hindi, le peul, le
quechua et le japonais, le professeur Hagège nous
a offert un excellent discours, marqué d’éloquence
et de passion, dans le plus pur style des grands
orateurs français. Il nous a expliqué quelles
étaient les principales difficultés rencontrées
par la traduction dans les différentes langues,
en assortissant ses explications théoriques de
nombreux exemples illustrant que le diable se
cachait effectivement dans les détails. Attention aux
mots ! Ce n’est pas un hasard si au commencement
était le Verbe. Les mots peuvent construire ou
détruire un monde. C’est pourquoi il faut les choisir
avec soin, sans quoi ils peuvent être destructeurs.
Ainsi, l’exercice de traduction n’est pas une
tâche aisée, chaque mot pouvant être lourd de
conséquences : un simple article déterminé peut
s’avérer plus puissant que mille chars d’assaut. En
effet, selon le professeur Hagège, la langue peut
Claude Hagège, professeur honoraire au Collège de France,
linguiste et écrivain
Journée de la traduction 2014 continued
38
linguistique offerte par les traducteurs
lors des missions dans les États membres
ou au siège de la Cour s’avère être un
service fort utile et très apprécié par les
auditeurs.
devenir un instrument politique au service des
États, elle peut contribuer à étendre la dominance
économique et politique d’un État sur les autres, à
imposer une pensée unique, contraire à la diversité
et à la richesse culturelle que l’Europe s’efforce de
préserver. Pour le professeur Hagège, qui est un
amoureux des langues, il faut aimer les langues
pour ce qu’elles sont : une source de culture et de
richesse spirituelle, un moyen de transposer l’âme
d’une communauté, de la rendre vivante et de
l’ouvrir vers le monde.
L’excellent discours du professeur Hagège n’a
fait que renforcer l’idée de l’importance que la
traduction doit occuper dans l’UE en général et à la
Cour des comptes en particulier.
Ainsi, dans son allocation, Mme Gailė Dagilienė
a souligné la valeur ajoutée que le service de
traduction apporte aux travaux de la Cour : audelà de la traduction proprement dite, l’assistance
Le rôle joué par la traduction est
donc indéniable. Les conséquences
que peuvent engendrer l’absence de
traduction ou la traduction réalisée par
des non-professionnels sont parfois
très importantes. Cela est très bien
illustré par un exemple venu d’outre
Atlantique, où l’on parle, dans le
monde des traducteurs, du « 71 million
dollars word ». Il s’agit de la somme
reçue comme compensation par un
patient auquel l’hôpital n’avait pas fourni de
services professionnels d’interprétation et qui, par
conséquent, avait été mal diagnostiqué. Comme on
le voit, les coûts de la non-traduction peuvent être
parfois très élevés.
Mais, au-delà de la valeur matérielle, il faut
davantage penser à la traduction comme étant
un vecteur de communication, un « pont » entre
les langues et les peuples, ainsi que M. Caldeira
le suggérait dans son discours. Tout comme une
œuvre littéraire est décryptée aux lecteurs par
l’intermédiaire de la traduction, le message de la
Cour est envoyé aux quatre coins du continent
dans une forme compréhensible pour ceux qui
vont le lire, c’est-à-dire dans leur langue maternelle.
C’est ainsi que la traduction contribue à la
démocratisation du travail de la Cour et c’est là que
réside la valeur ajoutée de notre service.
Evaluating the impact of International Financial
Reporting Standards in the EU
39
By Rosmarie Carotti
A meeting was organised by the Association of Chartered Certified
Accountants (ACCA) and hosted by Theodor Dumitru Stolojan,
MEP in the European Parliament in Brussels,
on 25 September 2014.
The context
Regulation (EC) No
1606/2002 of the
European Parliament and
of the Council of 19 July
2002 on the application
of international
accounting standards
(IAS) has paved the
way for a convergence
of financial reporting
standards throughout
Didier Millerot, DG MARKT;
Theodor Dumitru Stolojan, MEP the EU.
International Financial Reporting Standards
(IFRS) have been applicable since 2005 for the
consolidated accounts of listed companies in the
EU. The Transparency Directive (2004/109/EC), as
subsequently amended, also stipulates that all
issuers (including non-EU) whose securities are
listed on a regulated market located or operating in
an EU country must use IFRS.
In the wake of the financial crisis the EU
Commissioner for Internal Market and Services,
Michel Barnier, mandated Philippe Maystadt in
March 2013 to examine ways of reinforcing the EU's
contribution to International Financial Reporting
Standards and improving the governance of the
European bodies involved in developing those
standards.
On 13 March 2014 the European Parliament backed
a Commission proposal for EU co-financing of
the International Financial Reporting Standards
Foundation and the European Financial Reporting
Advisory Group (EFRAG).
The European Commission’s public consultation
The Commission has decided to measure the
impact of the IAS regulation within the EU against
its original aims. This evaluation will also address
the IFRS experience in Europe so far. The public
consultation period on the impact of IFRS in the EU
started on 7 August and continues until 31 October
2014. Citizens and organisations - notably capital
market participants and companies preparing
financial statements or using them for investment
purposes - are asked to complete an online
questionnaire.
This was the background to the ACCA’s invitation.
The discussion was moderated by Richard Martin, of
the ACCA, and articulated around the six topics of
the questionnaire.
The roundtable
Theodor Dumitru Stolojan, MEP and rapporteur
on the Union programme 2014-2020 supporting
specific activities on financial reporting and
auditing, was the host of the event. He reported
about the political debate held in the European
Parliament on IFRS and the decision to co-finance
EFRAG and the IFRS Foundation from the European
budget. Conclusions about ten years of IFRS in the
EU will be presented by the European Commission
by the end of the year.
Didier Millerot, DG MARKT European Commission,
explained that the aim of the Commission was to
establish a global set of high quality IFRS. It was
its duty to look at the impact of such a decision
on the functioning of the Single Market and at the
costs and benefits for companies and countries.
The results of the online consultation will lead
to a European Commission report which will be
discussed by the new Commission. Nevertheless,
the outcome of the consultation will not necessarily
lead to a new proposal of legislation for financial
reporting. The European Commission will conclude
whether a new system has to be turned into EU law.
Vincent Papa, Chartered Financial Analyst (CFA
Institute), focused on the need for investors to
have information which reflects economic reality
and comprehensive disclosure. IFRS have been, in
his mind, a success but investors raise points to be
addressed, such as avoidable complexity, limited
comparability and incomplete information.
Professor Colin Haslam, Queen Mary University
London, analysed the issue of information
disclosure from an academic perspective. He
Evaluating the impact of International Financial Reporting
Standards in the EU continued
40
The quality of IFRS
The Commission will look at the mechanics of the
regulation and the endorsement system of the
standards. EFRAG plays a very important role in
advising the Commission on technical issues before
it takes its decisions. Last summer the Commission
decided to appoint a dedicated expert group that
brings together the representatives from industry,
the competent authorities, enforcement agencies
like ESMA and national standard setters.
From left to right: Colin Haslam, Queen Mary University London;
Ricardo Sanchez, EBF; Mark Vaessen, FEE; Richard Martin, ACCA;
Melanie McLaren, FRC; Claes Norberg, Uppsala University; Vincent
Papa, CFA Institute
identified the volatility in the financial system
and the need to cope with it. The other challenge
is balance sheet instability which needs to be
incorporated into standards. But he suggests not to
rush into anything and calls for a progressive set of
adjustments.
For Melanie McLaren, Financial Reporting Council
(FRC), IFRS are about achieving a common
vocabulary. Many firms in the UK chose to opt
for IFRS because this makes them attractive for
investment. Mark Vaessen, Fédération des Experts
Comptables Européens (FEE), reminded that before
2005, 25 national Generally Accepted Accounting
Principles (GAAPs) were applied in the EU, and in
many countries there was no national enforcement
mechanism. Many were turning to the US GAAP
by default. Ten years later, most countries show a
tremendous improvement in financial reporting.
Europe is increasingly achieving a common
accounting language.
Claes Norberg, Uppsala University, described how
Sweden started switching from national GAAPs into
the old IFRS back in 1999. Conversion came in 2005
and was a gradual step. IFRS as a global standard
would be for him the ideal and efficient global
reporting system which reflects the economic
substance of transactions. By using global standards
the competitiveness of Europe may even be
improved.
Ricardo Sanchez, Member of the European
Banking Federation (EBF), discussed the difficulty
of comparing the costs of complying with IFRS
today with those which would have been incurred
with national GAAPs if they had undergone major
evolution. High quality standards and financial
reporting is clearly a cost-benefit issue but most of
the costs associated with financial reporting do not
come from IFRS.
From an academic point of view the European
accounting project is evolving very positively. There
is definitely a benefit to be gained from moving
towards a more stable approach. The answer to
those people calling for sub-global European
standards is that this would mean less consistency,
less comparability and transparency. It would also
mean more costs and many more opportunities for
people to disagree.
Europe has high quality financial reporting and is
contributing to more transparent, more robust and
more effective capital markets, even if concerns
about complexity remain. But it shall not be
forgotten that IFRS are trying to reflect the financial
reality of complex transactions, rather than making
those transactions complex per se.
Costs and benefits in Europe
There is a lot of talk about costs and very little
about the benefits which often are intangible and
therefore difficult to measure. However they should
not be forgotten.
IFRS make firms attractive for investment. In
2005, Europe needed to seize the opportunities
of the Single Market; today it needs to seize the
opportunities of the global market. Europe needs
growth and jobs. It needs financing and integration
of its capital markets. It needs foreign investment
and the benefits given by international standards.
Over 100 countries now use IFRS. The European
Commission and Parliament can be satisfied that
after ten years there is confirmation that they made
the right move.
Among the panel there was consensus that the
benefits of IFRS outweigh the costs.
ISSN 1831-449X
Main Contents
02 REFLECTIONS ON THE 2013 ANNUAL REPORT OF THE ECA
Interview with Lazaros S. Lazarou, ECA Member responsible
for the statement of assurance
EU ACCOUNTABILITY CONFERENCE 2014
05
11
CONTACT COMMITTEE 2014
13
17
THE EUROPE 2020 STRATEGY – AN OPPORTUNITY FOR CLOSER CO-OPERATION
2004 TEN YEARS OF ENLARGEMENT 2014
National Audit Office of Lithuania
Czech Supreme Audit Office
25
29
SPECIAL REPORT N° 13/2014
SPECIAL REPORT N° 15/2014
35
LA CERTIFICATION DU SERVICE D’AUDIT INTERNE
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