Auditors criticise Balkans reconstruction programme

The European Commission’s €5 billion spending programme to help reconstruction of the western Balkans has failed to get maximum benefits from the money spent, according to the European Court of Auditors.

The Commission has not paid sufficient attention to the capacity of Albania, Bosnia and Herzegovina, Croatia, Macedonia, Kosovo and Serbia to absorb the aid provided. Nor has it provided adequate strategic management to staff dispensing the aid and choosing and monitoring projects.

The criticisms are made by the Commission’s external auditors, the European Court of Auditors, in a report on the Community Assistance for Reconstruction, Develop-ment and Stabilisation - CARDS - published today (4 October).

CARDS, which ran from 2000-06, was set up to assist the reconstruction of the Western Balkans after a series of devastating wars. It was replaced this year by the Instrument for Pre-accession Assistance (IPA), but the projects begun under CARDS are still running.

The auditors say that the Commission’s management approaches "were effective in ensuring quick delivery of aid, but gave insufficient consideration to maximising the benefit from aid".

The auditors highlight weaknesses in the Commission’s procedures for selecting programmes and projects. "Detailed sectoral analyses by the Commission and/or recipient country national strategies mostly did not exist or were produced too late to enhance the strategic guidance," the auditors observe.

They add: "As a result, projects were not selected on the basis of objective criteria and, in certain cases, they were selected in response to the beneficiaries’ ad hoc request."

Projects were not always implemented as planned. For the programme year 2002, the auditors observe, €8 million was allocated for police and public order in Albania. The plan allocated €4m for building institutions by supporting the EC Police Assistance Mission, €2.5m for training and €1.5m for investment support. But, the auditors report: "In reality the project fiche was completely disregarded. Not one euro was spent in order to finance the ECPA mission. €4.7m were spent on a data communication network, €1.9m were spent on the power supply equipment and €1m were spent on a grant to the United Nations to support the security sector reform programme."

The auditors criticise the Commission for failing to persuade the recipient countries to participate in and take ownership of their projects. Monitoring was weakened by failure to set meaningful criteria to measure progress.

In its response to the auditors’ criticisms, the Commission says that the IPA will make it easier for the Commission staff to take account of countries’ capacity to absorb aid.

The European Commission’s €5 billion spending programme to help reconstruction of the western Balkans has failed to get maximum benefits from the money spent, according to the European Court of Auditors.