The European Court of Auditors is best known as the watchdog of the reliability and legality of the EU’s accounts. In its special reports it often undertakes an assessment of specific areas of Union activity, and it has published various reviews of specific aspects of agricultural expenditure over the years.
It can also submit opinions at the request of one of the other institutions of the Union, and it has just released an opinion on the Commission’s legislative proposals for the CAP post-2013 announced in October 2011.
The opinion focuses on whether and to what extent the Commission’s legislative proposals remedy weaknesses already identified by the Court following its audits. Subsequently it presents some further reflections resulting from the Court’s analysis of the proposals.
The opinion is comprehensive, addressing issues in all four of the main draft regulations in the Commission’s package. One of the guiding principles behind the Court’s observations is whether the proposals facilitate sound financial management by shifting from the current focus on compliance and financial implementation towards a performance-based system, with clear objectives and criteria against which performance can be measured. In this respect, the Court is not impressed:
Despite the claimed focus on results, the policy remains fundamentally input-based (expenditure oriented), and therefore oriented more towards compliance than performance. In particular, the objectives established for direct payments to farmers within the framework of the CAP are not disclosed in the articles of the regulation, nor are their expected results, impacts and indicators. For rural development, a disparate and wide ranging set of objectives are laid down in the regulation which does not include either their expected results and impacts or relevant indicators. Similarly, the objectives and expected results of cross compliance and the ‘greening’ component of direct payments are not adequately defined. The disclosure of these elements would help to focus and target the policy on delivering the desired results.
The Court is also concerned about simplification of CAP regulations, which it relates to the level of administrative and compliance costs which member states and farmers must incur in administering the policy. On this issue, the Court comments as follows:
The limited simplification and additional administrative burdens introduced will have an effect on the costs of the reform which the Commission estimates are likely to represent an increase of 15 % overall. Member States consider that the percentage increase in costs may be even bigger. The Court notes that no information is available to show to what extent these additional costs will be offset by increased management effectiveness or efficiency in delivering the policy.
The opinion also contains observations on other issues that the Court has raised in its audit reports, including confining aid to active farmers, capping and improving the distribution of aid, and improved targeting of investment support to rural areas.
The question is whether the Council, Parliament and Commission will respond to the Court’s criticisms, and how?