Romania was among the 14 EU states where 160 transactions with rural development funds were checked.
Regarding rural development expenditure, of the 160 transactions sampled, 101 (63%) were affected by error, the report reads.
For most transactions affected by error, national authorities had enough information to detect and correct the errors, the Court notes.
Cases of nonobservance of eligibility requirements for investment projects were identified in Romania, Germany, Spain, Greece, France, Italy, Lithuania, Poland, Portugal and the UK.
In Romania, the beneficiary (a rural municipality) applied for support for an investment project which included a water supply network, a sewage system, improvement of local roads and a community building. Seven bidders submitted offers, of which the beneficiary rejected five as not fulfilling the requirements. The Court found that the winning bidder did not respect two tender requirements, and, moreover, that other bids had been excluded for not respecting precisely those requirements. Due to the non-compliance with the tender dossier and the nonobservance of the principle of equal treatment, which influenced the outcome of the tender, the expenditure concerned is ineligible, the report reveals.
“Concerning Romania, the European Commission has in its audits also found substantial weaknesses, and a clearance of account procedure is ongoing.”
The Commission will follow the Court’s findings with a view to protecting the financial interest of the EU and recovering any undue payments, the report reads.
The Court also notes Romania included ineligible VAT in the category of eligible expenses.
Regarding the European Agricultural Fund for Rural Development (EAFRD), the Court found that data reported by Romanian certification authorities were not reliable. The court notes it checked certification bodies in Romania again and found ineligible features in 5 of the 10 cases tested.
“Of the six Member States’ rural development systems audited, one was not effective (Romania) and the other five were partially effective (Bulgaria, Germany, France, Poland and Sweden).”
Regarding financial corrections applied by Romania, the report says the Commission identified serious problems in a Romanian European Social Fund (ESF) program in April/May 2012 and the main issues included deficient selection procedures, deficient management verifications, insufficient checks on public procurement and ineligible expenditure for individual cases.
“After negotiation, the Commission and Romanian authorities agreed on a 25 % flat-rate correction. As a result Romania made a further declaration of ESF expenditure (exceeding 25 % of all expenditure declared previously), on the basis of which the Commission paid a small amount (EUR7 602) to Romania in December 2012. Corrections (which up to 31 December 2012 amounted to EUR81 million of the EU contribution) were not made at project level, and the impact of the financial correction is equivalent to lowering the co-financing rate for this operational program.”
Regarding the European Regional Development Fund, the report also notes the EC identified serious management and control system problems, as well as deficiencies in public procurement between 2010 and 2012.
After payment interruption the Commission and Romanian authorities agreed that individual corrections must be carried out at project level. “This was reflected in the reimbursement the Commission paid to Romania in December 2012,” the report reads.
The majority of errors arise from misapplication or misunderstanding of EU expenditure rules, the Court explains.