2.208. Four of the six special reports mentioned above include significant positive findings. The reformed clear- ance of accounts system and the IACS had both con- tributed to improved management of large amounts of EU funds, while the milk quota regime had restricted production to the target level. The Commission strategy for dealing with BSE was basicallysound. The fifth report, on potato starch, is less positive, while the sixth confirmed that differentiated export refunds were open to serious abuse.
2.209. Certain major objectives had not been achieved. The reform had not decreased the overall time needed to complete both financial and conformityclearance of expenditure for a given year. The milk quota system had not brought production into line with unsubsidised demand. Action to deal with BSE was limited byinsti- tutional procedures for passing legislation and inad- equate Member State implementation in several key areas. For potato starch aids and for differentiated export refunds, the achievement of basic objectives had not been evaluated bythe Commission.
2.210. Persistent weaknesses in Member States’ check- ing of Communityoperations were noted in the IACS and for export refunds. The milk quota system was still not fullyimplemented 17 years after its introduction. 2.211. Simplification and harmonisation could, in gen- eral, facilitate better management, reduce administrative cost and ease the burden on beneficiaries of aid.
As for the special report on ‘potato starch’, it can be concluded from the comments of the Court that this scheme does not cause major difficulties in its implementation. The Court revealed certain deficiencies but those do not, apart from the problem in one Member State, seem to be of serious nature.
Special report ‘Clearance of accounts’
Concerning the overall timescale for the conformity procedure, the Commission accepts that the last corrections for the 1996 year will not be made any quicker than under the old proce- dure. However, the new procedure has resulted in considerable amounts of corrections being imposed at a much earlier stage than in the past.
1996 was the first year of the reformed procedures for the clearance of accounts. The Commission expects the final cor- rections for later years to be introduced considerably earlier than would have been the case under the old system. The full effects of the reform have not yet been seen. In this context, the Commission considers that the conciliation procedure has contributed to this global improvement.
Special report ‘Milk Quotas’
The Commission believes that, in the present circumstances, fixing quotas at a level which secures a balance between pro- duction on the one hand and consumption and non-subsidised exports on the other would require a fall in production of about 20 %. It considers that this would require the scrap- ping of production capacity and hence of processing capacity.
Special report ‘BSE’
The Commission welcomes the positive assessment on the strategy it developed to deal with the BSE crisis.
Special report ‘Starch’
The Commission has undertaken an in-depth study, whose results will be available at the end of 2001.
The Court describes in general terms the main control defi- ciencies established in some Member States. The Commission agrees that, even for those Member States where IACS has been implemented, weaknesses still exist and are treated accord- ingly in the context of the clearance of accounts procedure.
In respect of export refunds it must be added that Member States were corrected for the persistent weaknesses in checking Community operations. Commissionad hocDecisions 4, 5 and 6 refer to financial corrections of about EUR 230 mil- lion.
With regard to the incomplete implementation of the milk quota regime, the Commission, in addition to imposing finan- cial corrections, opened infringement proceedings against Italy (reasoned opinion 97/2228) and Spain (reasoned opinion 97/2227) for incorrect application of the milk quota regime and failure to collect the levy. In the case of these two Member States these problems are partly due to the fact that the pro- ducers and purchasers have challenged the levy before the national courts and that those legal proceedings are very lengthy.
The Commission will continue its efforts to simplify and har- monise the relevant regulatory framework.
CHAPTER 3
Structural measures
3.0. CONTENTS Paragraph Introduction 3.1 Budgetarymanagement 3.2-3.23 Introduction 3.2-3.6Implementation of the appropriations 3.7-3.9
Indicative distribution of the appropriations available for the period 2000 to
2006 3.10-3.12
Review of the Commission’s comments on financial management 3.13-3.15
Implementation of the programmes 3.16-3.23
The period 2000 to 2006: implementation slower than anticipated 3.17-3.19
The period 1994 to 1999 3.20
The periods prior to 1994: closure of the measures 3.21-3.23
Specific appraisal in the context of the Statement of Assurance 3.24-3.77
Introduction 3.24-3.27
Analysis of the underlying transactions 3.28-3.43
Commitments 3.28-3.30
Payments 3.31-3.39
Outstanding commitments 3.40-3.43
Analysis of the control systems 3.44-3.73
Implementation of Regulation (EC) No 2064/97 3.44-3.56
Implementation of the new provisions in respect of the programming
period 2000 to 2006 3.57-3.61
Procedures for the closure of the measures 3.62-3.71
Checks carried out bythe Commission 3.72-3.73
Conclusions and recommendations 3.74-3.77
Conclusions 3.74-3.76
Recommendations 3.77
Follow-up to previous observations 3.78-3.116
Measures to support small and medium-sized enterprises (SMEs) 3.78-3.92
Introduction 3.78
Confirmation of the failings identified bythe Court 3.79
Taking the failings identified into account in the regulations 3.80-3.83
Improving identification of measures to support SMEs 3.84-3.85
Initiatives taken to improve verification of compliance with competition
policyrules 3.86-3.88
Specific aspects which concern the European Social Fund 3.89-3.90
The Leader CommunityInitiative 3.96-3.112
The audit of Leader I 3.96-3.97
The follow-up audit of Leader II 3.98-3.100
Financial allocations 3.101-3.102
Management weaknesses of Leader II 3.103-3.110
Conclusion 3.111-3.112
Observations made in the context of the 1998 DAS in respect of the ERDF
and the Cohesion Fund 3.113-3.116
Summaryof Special Reports 3.117-3.131
Special Report No 1/2001 on the URBAN CommunityInitiative 3.117-3.122 Special Report No 12/2001 on structural measures to improve the
employment situation 3.123-3.129
Special Report No 10/2001 on financial controls in the context of the
Structural Funds 3.130-3.131
INTRODUCTION
3.1. This chapter deals with heading 2 of the financial perspective concerning structural measures. It examines the implementation of the four Structural Funds (SFs): the European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Agricultural Guidance and Guarantee Fund, ‘Guidance’ Section, (EAGGF-Guidance), the Financial Instrument for Fisher- ies Guidance (FIFG) and the Cohesion Fund.