Auditors attack management of ‘Med’ programmes

Date: 26/09/1996

JUST as European, North African and Middle Eastern partners say they are getting Mediterranean cooperation efforts off the ground, the Court of Auditors has severely criticised the management performance of the European Commission, author of the 'Med' programmes.

In a report now being discussed in the European Parliament, the Court finds “serious irregularities and shortcomings in financial management” of the numerous programmes.

In an 'on-the-spot' examination of programme offices and coordinators, the Court found that in subcontracting the projects out, the Commission ignored legal advice by delegating powers through an unapproved procedure, and then produced contracts which were vague about the responsibilities of those involved.

The Commission also failed to monitor project coordinators closely enough to uncover what the Court describes as “serious confusions of interest, prejudicial to the proper management of Community funds”.

According to the report, the coordinators' group awarded contracts to its own members rather than putting projects out for tender, paid themselves twice for some services and kept faulty accounts. Worse still, says the report, the Commission “was ineffective for a long time” in ending practices drawn to its attention by the Court in 1994.

The Court found that coordinators disbursed only 33 million ecu of the 41 million ecu available for projects in 1994, and claims that almost 20&percent; of the money paid out was given to the coordinators themselves for services for which they had already been paid.

While approving of the Commission's intention to help the region, the Court also finds fault with the concept of the Med programmes, saying it is too hard to evaluate their impact and calling on the Commission to find objective criteria for evaluating project results.

“The Court considers that the impact of the Med programmes remains to be proven,” it concludes.

It questions whether the programmes are really enriching Mediterranean countries when, during the first two years of the programmes, “the bulk of the funds provided by the Commission were consumed in Europe”.

In addition, the Court queries whether the projects chosen were the best ones. Out of 30 urban projects the Court sampled, 28 were proposed by Europeans, without any input from the Mediterranean country involved or even the Commission's delegations in Mediterranean countries. “Consequently, the projects ...were better suited to the concerns of northern cities than to the priority needs of those in the south.”

The report concludes that the Commission “should take immediate action to redesign the manner in which these programmes are formulated, managed and implemented”.

It also advises that no new projects should be started until the current problems have been resolved.

Responding to the Court's findings, the Commission has acknowledged that “certain undesirable situations arose during the setting up ... of the programmes”, blaming them on “extreme time pressure to set up the new programmes and commit expenditure”.

But it insists that measures taken in 1994 “went some way to eliminating the problems” and adds: “With 200 networks operating (in 27 countries), it is impossible for the Commission to carry out at all times individual checks on the financial operations of them all.”

In a bid to correct remaining “anomalies”, the Commission has now proposed “more drastic measures”.

Under its New General Framework, which will be applied not only to Mediterranean projects but also to EU efforts in Asia and Latin America, the Commission pledges to keep control over policy implementation, draft a 'manual of procedures' to govern all aspects of project management, draw up standard contracts and require external audits of programmes.

Whether those moves will be enough to satisfy the Court remains to be seen. But the Commission maintains that the benefits of Med programmes are widely acknowledged and they should therefore be continued.