On discharge in respect of the implementation of the general budget of the European Union for the financial year 2023, Section III - Commission

The Committee on Regional Development calls on the Committee on Budgetary Control, as the committee responsible, to incorporate the following into its proposal for a decision:

1. Underlines that the Commission and the Court of Auditors have repeatedly stated that error is not synonymous with fraud; emphasises that the error rate does not necessarily indicate that the resources have been misspent, nor does it call into question the positive results and added value of cohesion policy; is worried that the Court of Auditors' estimate of the level of error in cohesion might be contributing to a negative image of the policy and of shared management in general; acknowledges that the risk of fraud is nevertheless a cause of concern and should be minimised; stresses therefore the importance of strengthening the single audit principle, reducing duplication, and clearly distinguishing between unintentional errors and fraud;

2. Considers that the increase in the error rate for cohesion policy funds is rather symptomatic of the complexity of the rules applicable to this spending area and the insufficient administrative capacity of national, local and regional authorities; notes that overlapping eligibility periods and the simultaneous implementation of the Recovery and Resilience Facility (RRF) and of emergency response measures such as CRII(+), CARE and REACT-EU have created additional complexity for managing authorities;

3.Stresses that, in its most recent discharge opinions, the Committee on Regional Development called for an additional advisory support from the Commission to national, local and regional authorities to avoid a situation of administrative overload; recognises the Commission’s efforts but, observes that, regrettably, these have not been sufficient to mitigate the error risk; warns that a similar administrative overload might arrive at the end of the RRF eligibility period and the final years of the MFF; underlines the need to address the insufficient administrative capacity of national, local and regional authorities as a matter of urgency; calls on the Commission, in this regard, to provide them with clear guidance, and to increase its support for administrative capacity building, including through staff training, best practice sharing, peer-to-peer reviews and technical assistance to ensure effective fund management;

4.Reiterates that the above-mentioned factors, namely the overlapping programming periods and the simultaneous implementation of RRF, CRII(+), CARE and REACT-EU, have also contributed to the delays in the absorption of cohesion policy funds 2021-2027; notes that in 2023 payments for 2021-2027 programmes remained low, at 3.2%, which amounts to a one year delay when compared to the equivalent stage in the previous programming period;

5.Draws attention to the Court’s review on the main causes of errors in cohesion spending 2014-2020; welcomes the Court’s conclusion that the cohesion policy assurance framework has helped reduce the overall error level since 2007, but regrets it has not managed to bring it below the materiality threshold; points out that ineligible expenditure and projects were the most prevalent type of error, followed by non-compliance with state aid and public procurement rules;

6.Notes that a significant number of errors were detected on transactions related to 100% co-financed measures; notes that, without taking into account transactions with funding from REACT-EU, CRII+ and CARE, the error rate in Heading 2 would have been 4.3 %;

7.Notes the uncertainties regarding the closure of the 2014-2020 programming period and welcomes that the Commission has taken additional steps to address this; emphasises the importance of a successful closure of the 2014-2020 programming period and urges the Commission to implement the Court’s recommendations (6.4) in this respect;

8.Notes that the latest long-term payment forecast produced by the Commission foresees substantial decommitments as of 2027 unless Member States undertake additional efforts and implement at a much faster pace than in the period 2014-2020; notes that for the CF, ERDF, and ESF+ cohesion policy funds, the Commission forecast total decommitments for 2024-2027 at €2.2 billion, more than five times its 2022 forecast of €0.4 billion; warns that for Just Transition Fund (JTF), the low implementation in 2023 puts important amounts at risk from 2025 onwards; calls on the Commission and on the Member States to use all the available possibilities to avoid decommitments;

9.Reiterates its previous calls for further simplification, which would make cohesion policy funding more accessible for beneficiaries and, at the same time, help reduce the risk of errors, especially in a context marked by the adoption of extraordinary legislative measures that have boosted flexibility in fund management;

10.Reminds that the 2021-2027 CPR already introduced far-reaching simplification and flexibility measures, but that it is still early to draw lessons from the current programming period; urges the Commission and the Member States to continue their cooperation in the current programming period to streamline unnecessarily complex rules and procedures wherever possible, work on a common interpretation of certain legal requirements and avoid gold-plating; furthermore, recalls the need for minimizing administrative burden for local and regional authorities, but for beneficiaries in particular; calls to avoid, in future, recurrent changes in the cohesion legal framework and the administrative burden they entail;

11.Acknowledges that, to achieve genuine simplification, more drastic changes are needed in the post-2027 legislative framework; calls for the adoption, post-2027, of a simpler budgetary framework and of a single set of rules for beneficiaries to facilitate access and compliance; calls as well for the further expansion of Simplified Cost Options; furthermore, stresses the critical role of digitalisation in the management of EU funds;