Anti-fraud and anti-corruption measures in relation to the use of European Structural and Investment (ESI) Funds

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Anti-fraud and anti-corruption measures in
relation to the use of European Structural and
Investment (ESI) Funds
Pascal Boijmans Head of Unit "Competence Centre
for Administrative Capacity"
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Outline

1. Rationale
2. Legislative framework
3. Assistance and tools available
4. Anti-fraud and anti-corruption conference and
   seminars in MS
5. Other on-going initiatives

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National administrative CapacitiesStrong
correlation between Absorption and Governance
Standardized Index based on Absorption data end
2013 for all funds (ERDF, CF, ESF, EAFRD, EFF)
and World Bank Governance Index 2012. Croatia is
an outlier due to short time for absorption.
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Strong correlation between Government
Effectiveness and Corruption
Latest data for all 28 Member States
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Legislative Framework

• Article 59 (2) of the Financial Regulation
• New elements in the Common Provisions Regulation
  (CPR) governing the implementation of European
  Structural and Investment (ESI) Funds

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Article 59 (2) of the Financial Regulation
"When executing tasks relating to the
implementation of the budget, Member States shall
take all necessary measures, including
legislative, regulatory and administrative
measures, to protect the Union's financial
interests, namely by (b) preventing, detecting
and correcting irregularities and fraud."
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Anti-fraud requirements in Article 125.4(c) of
the CPR for 2014-2020

• For the 1st time in the Regulation governing the
  implementation of ESI Funds explicit reference
• "As regards the financial management and control
  of the operational programme, the managing
  authority shall
• - put in place effective and proportionate
  anti-fraud measures taking into account the risks
  identified."

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Programming period 2014-2020 for ESI Funds

• Fight against fraud and corruption is high on the
  agenda - both in the EU in general, and in the
  ESI funds in particular
• Stronger legal basis provides opportunity to step
  up the game in fight against fraud and
  corruption
• For the ESI Funds no business as usual
• Zero tolerance to fraud and corruption in ESIF

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Anti-Fraud and Anti-Corruption Measures
Assistance and Tools

• Everybody agrees that fraud and corruption is not
  acceptable, but what can we do about it?
• For 2014-2020 the Commission has developed a
  number of new guidelines and tools
• Fraud Risk Assessment Guidance Note
• ARACHNE

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EC Guidance Note on Fraud Risk Assessment and
Effective and Proportionate Anti-Fraud Measures

• Made available to MSs in mid-December 2013
• Provides assistance and recommendations to
  Managing Authorities for implementation of
  Article 125.4 c)
• Provides fraud self-assessment tool - focuses on
  fraud risks in relation to 3 key processes
• selection of applicants
• implementation and verification of the operations
  (including public procurement-related fraud
  risks)
• certification and payments.

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Commission's guidance provides a tool which can
mitigate fraud risks

• Assessing the degree of exposure to specific
  fraud risks using a self-assessment tool provided
  by the Commission
• The type of additional anti-fraud measures to be
  put in place should take into account already
  existing mitigating controls
• Proportional and effective a higher fraud risk
  requires that anti-fraud measures are stepped up
• During the programming period, the fraud risk
  assessment should be carried out annually or
  every second year

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ARACHNE risk scoring tool

• Data-mining tool developed by EC and offered for
  use by Managing Authorities in MSs for free.
• Objective
• Support the Management and Control Systems, to
  lower the error rate and strengthen fraud
  prevention and detection
• Facilitate the continuous monitoring / overview
  of the internal and external data regarding
  projects, beneficiaries and contracts/contractors

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ARACHNE risk scoring tool

• Based on a set of risk indicators and alerts
• Customized to the nature of OP expenditures
• Using some key (internal) data of the projects
  enriched with publicly available information
  (external data)

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ARACHNE benefits

• In view of limited resources and multiplicity of
  operations, key actors and systems
• Promote the use of a risk based approach in the
  verifications of the projects (focus on most
  risky projects)
• Complement the risk assessment with regard to
  fraud alerts and irregularities
• Identify possible irregular circumstances
  continuously on the basis of predefined risk
  criteria
• Build an overall better defence against fraud and
  errors

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Anti-fraud and anti-corruption events

• Conference on anti-corruption and anti-fraud
  measures in relation to the use of the ESI Funds.
• Follow-up seminars in selected Member Sates
• Events organised by OLAF (Greece 26 and 27
  February 2014)

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Conference on anti-corruption and anti-fraud
measures in relation to the use of the ESI Funds

• 3 December 2013, Brussels
• Organisers European Commission in co-operation
  with Transparency International
• 454 participants
• 28 EU MS different EC services REGIO, EMPL,
  OLAF, HOME, MARKT, AGRI, MARE
• Conclusion there is interest in further sharing
  of hands-on practice, guidance and promote
  awareness on the issues

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Seminars in 6 MS

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Seminars in MS - Dates

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Seminars in MS - Approach

• Co-operative
• endeavour

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Other on-going initiatives

• New Public Procurement directives
• new provisions on conflicts of interest (Art.21)
• illicit behavior by candidates/tenderers
  (Art.22)
• safeguards against undue preference (Art.39)
• obligation to transmit the text of concluded
  high-value contracts to the oversight body
  (Art.84)
• Working Group (REGIO, MARKT, AGRI, EMPL, MARE and
  EIB) on Public Procurement Action Plan some
  initiatives
• Prepare Practical Guidance on "How to avoid
  common public procurement errors"
• MS specific initiatives (RO BG Action Plans)

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Thank you !