Select Committee on European Scrutiny Seventh Report


AUDIT OF MANAGEMENT OF EXTERNAL AID PROGRAMMES


(22073)
5330/01
— 

Special report by the Court of Auditors on the management
of the Commission's external aid programmes (in particular
on country programming, project preparation and the role of
delegations).


Legal base:
Document originated: 16 January 2001
Forwarded to the Council: 16 January 2001
Deposited in Parliament: 6 February 2001
Department: International Development
Basis of consideration: EM of 20 February 2001
Previous Committee Report: None
To be discussed in Council: May 2001
Committee's assessment: Politically important
Committee's decision: Cleared, but relevant to debate covering the EU's policy on assistance to the Middle East (see paragraphs 1 and 4 above)

Introduction

  19.1  The European Court of Auditors (ECA) examines in this Special Report the adequacy and effectiveness of the Commission's procedures for country programming, project preparation and appraisal, and the management of aid by delegations.

  19.2  Aid is provided to the different geographical areas through a variety of programmes. In the African, Caribbean and Pacific (ACP) countries, it is mainly provided through the European Development Funds (EDF). In the other geographical areas, the different programmes are funded directly from the general budget of the European Union. In 1999 a total of 7, 927 million euros of commitments were made (see Table 1 below).

The report

  19.3  The report makes the following key points:

    —  the Commission has not established common procedures for country programmes in the different geographical areas;

    —  project preparation is weak and objective indicators are neither uniform nor integral to country programmes;

    —  the Commission's decision-making structure remains over-centralised. Conversely, delegations have limited time to monitor projects, project implementation undertaken by contacted agencies and/or consultants; and

    —  the Commission's organisational structure, procedures, use of human resources and working culture hinder the effective management of external aid.

— Overall conclusion and recommendations

    The ECA says:

    "European external action is governed by a variety of legal frameworks depending on the source of funding, the geographical area and the instruments or the channels through which aid is provided. This results in different procedures at all stages: country programming, project preparation and implementation and in the degree of involvement of beneficiary countries and the Commission's delegations in those countries, which complicates the efficient implementation of the different programmes.

    "The weaknesses noted in the management of external aid have been pointed out in previous reports, notably the 1997 Annual Report,[54] and similar observations have also been made in the reports of the external evaluations commissioned by the Council and the Commission.[55] The attempts so far to improve the Commission's organisational structure to implement aid, such as the establishment of the SCR,[56] have, however, been only partial.

    "The SCR is responsible for the implementation of projects once the Financing Agreement has been signed. The geographic Relex DGs[57] are responsible for overall programming, country strategies and project preparation. This effectively splits the project cycle, making decision-making procedures and the interface between the delegations and headquarters even more complex. The Commission has now accepted that splitting the project cycle is not satisfactory. A further reorganisation of the External Relations services is, therefore, being undertaken which seems to address many of the problems presented in this report. The Commission's proposal should help to improve its delivery of aid, but only if these changes of structure and procedures are accompanied by changes in the Commission's management culture towards a greater flexibility and a results oriented approach".

— The Commission's response

  19.4  In its response, the Commission indicates its willingness to address the issues raised in the report. It shares the Court's view that the variety of different procedures often complicates the management of the external aid programmes. The reasons are "historical". New programmes have been introduced to respond to new circumstances. It recalls that:

    "The Commission's chronic lack of resources and the unclear division of responsibilities within the Commission governing the management of the entire external aid effort hindered attempts to achieve greater harmonisation of procedures, although the establishment of the SCR in 1998 was the first stage in this process. Real progress was made in developing unified tendering procedures and operational manuals."

  19.5  Apart from the far-reaching reform programme currently underway, other new measures the Commission is taking include the introduction of a standard framework for Country Strategy Papers designed to improve programming and the introduction of project cycle monitoring. The Commission points out that the rapid growth in the area of external aid has not been met by a proportional growth in staff. It argues that the provision of adequate resources is essential to its success.

The Government's view

  19.6  The Secretary of State for International Development (the Rt. Hon.Clare Short) welcomes the report, commenting that it confirms a number of criticisms previously made about the Commission's management of external aid programmes. The Commission is currently undergoing a process of reform which is strongly supported by UK Government, she says, adding that:

    "Providing this reform process is fully and coherently implemented the concerns raised by the Court of Auditors report will be addressed. This report will be an important element in discussions on the reform process, including at Development Council".

  19.7  The document is due to be discussed at the May Development Council as part of a general discussion on EC reform.

Conclusion

  19.8  It is not surprising that when radical reforms are undertaken, some modification is needed. The encouraging aspect of this exchange is that the Commission is ready to make further adjustments as experience is gained. However, it continues to stress its lack of resources. In the past, the Secretary of State has said that it should manage the resources it has more effectively. The Court of Auditors report suggests that there is still room for improvement. However, the question remains of whether the Council is continuing to overload the Commission and whether European Community aid would be more effectively delivered if commitments were scaled down to a more manageable level.

  19.9  We consider elsewhere in this Report a European Court of Auditors Report on assistance to Palestinian society, which we have recommended for debate in European Standing Committee B as part of a wider debate on European Union policy on the Middle East. The commitments made under that programme go well beyond what the Commission has succeeded in delivering. We believe that the Council should take some responsibility for the situation which developed, and we continue to question whether it is being realistic in what it expects of the Commission.

  19.10  We, therefore, tag this report to that debate.


Source: SCR


54  Court of Auditors - Annual report concerning the financial year 1997 (OJ No. C 349, 17.11.1998, paragraphs 5.19-5.44). Back

55  In 1995 the Council requested a full and detailed evaluation of the European Community's development instruments and programmes. Independent evaluations were carried out into European Community aid to ACP countries, Mediterranean countries, Asian and Latin American countries and the EC's humanitarian assistance. The final report was delivered in May 1999: (20048) -; see HC 34-xix (1998-99), paragraph 11 (12 May 1999). Back

56  Common External Service of the Commission. Back

57  DG Development, DG Enlargement, DG External Relations. Back


 
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