Auditing EU cohesion policy — aiming for tangible change in the daily life of EU citizens

Interview with Iliana Ivanova, ECA Member and Chair of the ECA audit chamber Investment for cohesion, growth and inclusion

Iliana Ivanova.

Cohesion — a concept with impact

Having audited cohesion policy programmes for almost ten years now, Iliana Ivanova is very familiar with the challenges and opportunities this key EU policy presents. ‘Obviously the main aim of Cohesion is to reduce disparities between EU regions. It is also the policy which is the closest to EU citizens, even though they may not often realise how projects supported by its funds are actually improving their lives — through, for example, better roads, better drinking water, improved waste treatment facilities, digitalisation and even vocational training and support for our youth. On the surface cohesion policy can come across as something very technical and distant, but its results are definitely not !’. She explains that cohesion projects can lead to very tangible results. ‘I always insist that we report not only on weaknesses but also on good practices when we come across them. After all, it is these successful outcomes that actually matter for the citizens. Those managing cohesion funds can learn lessons from both failures and successes; it is important that as auditors, we give due prominence to good examples, as sometimes these can be more inspiring than the bad practices we find’.

Identifying what works well and what not

Different players, diverging interests, various orientations

Cohesion is an explicit example of a policy area with a shared management set‑up and in which various stakeholders can have different perspectives on the priorities to be addressed. For Iliana Ivanova what matters is that ultimately a compromise is reached and a solution is found. ‘Starting with the European Parliament, particularly the Committee on Regional Development, they have a crucial role in the design of cohesion policy framework . They are working with Commission and the Council, shaping the rules in that policy area. I personally really support the active role of MEPs as they often have different perspectives that can contribute to a more effective and efficient EU policy design’. She highlights the constructive relations the ECA has with the European Parliament, taking into account their suggestions when the ECA formulates its work programme and presents its reports. ‘Here I have to say that I’m really grateful and happy about the excellent relation that we have with the REGI committee. This is thanks to the chair, his team, and of course all the MEPs that actively participate. They always express their appreciation for our work’.

Triggering changes going beyond publishing error rates

One of the improvements relates to cohesion policy spending complying more with the regulatory framework. ‘I often refer to the situation that in the first decade of this century the most likely error rate we found in cohesion expenditure was at double digit level. Each year, we present an objective and comparative figure and cohesion is one of the most error prone areas in terms of compliance. As the ECA, we also report on deficiencies in performance, such as delays in implementation, the underutilisation of infrastructure, cost overruns, and poor monitoring. But that is separate from the legality and regularity issue’. She highlights that cohesion expenditure has gone a significant way to improving both these compliance and performance aspects. ‘From my perspective for each programme period I see that the rules are being improved and simplified; things are getting better. But despite these improvements, we should not forget that the cohesion policy error rate is still above the materiality level of 2%: for 2020 it was 3,5%’.

Cohesion as flexible policy instrument to address crises

Another topic that received a lot of attention and resources within the ECA has been the impact of the pandemic. Iliana Ivanova indicates they have triggered new EU initiatives, as has the war situation in Ukraine. ‘Regarding the COVID‑19 crisis and related action I think we managed quite well to deliver timely and relevant products. But the world is moving very fast and a new crisis emerged. Until the end of last year, we were mostly worried about COVID‑19 and its effect on the economy, with economic recovery at the centre of the political debate’. She says that the start of the pandemic seriously slowed down the absorption of cohesion funds and that cohesion actions had to be very quickly adapted by allowing extra flexibility. ‘This meant extending the scope of the eligible operations of the old period rules through a number of amendments to the existing legislation such as the Coronavirus Response Investment Initiative, called CRII, the Coronavirus Response Investment Initiative Plus, and additional funds for the Cohesion policy, REACT-EU, the Recovery Assistance for Cohesion and the Territories of Europe. This actually helped absorption for the 2014‑2020 period’.

New kid on the block — NGEU

Besides adapting existing cohesion instruments, one of the main initiatives responding to the crisis has been the creation of the Recovery and Resilience Facility as part of the NextGenerationEu package of support. ‘Auditing this is one of the challenges we currently face as the ECA. Starting with NGEU, we know that this is a new temporary instrument, designed to help the economic recovery following the pandemic. Within the NGEU, the RRF, provides the bulk of the money and uses a new delivery mechanism’. Iliana Ivanova explains that for the RRF disbursements are not linked to costs but to the achievement of milestones and targets. ‘In essence, they are measured by performance indicators’.

A full audit work programme, also addressing cross-cutting cohesion topics

For the current seven year multiannual financial framework period, the ECA Member observes that several themes are embedded in the implementation of cohesion policy, addressing key policy objectives such as the green transition, digitalisation, reforms, etc. ‘We consider these aspects and their interconnections as part of our analysis in our audit chamber’s knowledge nodes, where we prepare audit proposals for the new work programme. I’m very grateful to all colleagues who work very hard on keeping our corporate knowledge up to date with the result that they are able to make excellent proposals for audits each year in our audit chamber’. She proudly refers to the presentation of her chamber’s knowledge node project to other colleagues within the ECA. ‘It was accepted with great interest. I think other audit chambers are also interested in further developing these cross-cutting aspects of our thinking when we design the annual work programme’.

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Articles from the European Court of Auditors, #EU's external auditor & independent guardian of the EU's finances.

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European Court of Auditors

Articles from the European Court of Auditors, #EU's external auditor & independent guardian of the EU's finances.