EU auditors take Commission to task for ineffective support to Macedonia
Thursday, 30 June 2016
photo credit: European Court of Auditors
EU funding to help Macedonia strengthen its administrative capacity has had an insufficient impact partly due to a lack of active backing from the national authorities.
This is the main conclusion in a new audit report from the European Court of Auditors published on 27 June. While EU-funded projects have generally been delivered as planned they still need to be better targeted and prioritised, say the auditors. The report also concludes that in key areas, such as the fight against corruption and public procurement, the national authorities should make better use of the benefits created with EU funds.
Between 2007 and 2013, the EU allocated €615 million under the Instrument for Pre-Accession Assistance (IPA) to help Macedonia, or as the country is called in the report the former Yugoslav Republic of Macedonia, prepare for accession to the EU. The country received additional financial support under regional programmes also provided to other enlargement countries.
EU support for reform in the country is continuing under the current round of IPA, with an allocation of €664 million from 2014 to 2020. Under the new round of IPA, the Commission has reduced the country’s overall allocation by 4 million euros because the national authorities declined to receive support for technical assistance and capacity-building in the transport sector.
The auditors examined a sample of 17 projects aimed at strengthening national administration across three major sectors: public administration reform (11 % of total assistance), transport (18 %) and environment (16 %). These sectors accounted for 46 % of the total assistance during the period.
In the beginning, the projects were directly managed by the Commission but in 2010 the contracting and implementing of most of the funds were decentralized to the national administration in Macedonia – apparently according to the audit report without much success.
The national authorities were required to set up operating structures to manage the decentralised IPA funds. According to the report the process of decentralisation was carried out in accordance with the regulations. However, the Commission was not required to assess whether the national authorities were ready to manage the funds.
“The operation of the structures was not tested before new system was introduced, which is what produced the problems when the management of a large number of complex projects was decentralized,” the audit team tells The Brussels Times.
During the period the Commission cancelled its interim evaluation system which had been applied for previous pre-accession assistance to candidate countries and replaced it by other monitoring means.
Although building up the country’s horizontal public administration and its sector-specific administrative capacities was made a priority, the auditors found that relatively limited progress had been made in the audited areas.
In the transport and environment sectors, few of the audited projects addressed key capacity-building needs required to align national legislation with EU law. Investment in infrastructure was not accompanied by enough activities to successfully promote “learning by doing”. Many of the projects audited did not sufficiently fit into a coherent, cohesive and coordinated approach or were not adequately followed up.
Since the audit was carried out a new framework for providing pre-accession assistance (IPA II) is being implemented, with a more strategic focus, performance measurement and the possibility of sector-budget support. It is possible that the problems identified in the audit report are better addressed in the new system but this was outside the scope of the audit.
The audit report does not attribute any responsibility to individual departments in the European Commission. Judging from the report, the main reasons for the shortcomings in absorbing the EU funds and making the best use of them in Macedonia are domestic.
The Commission has repeatedly recommended starting accession negotiations with Macedonia since 2009 but because Greece’s objections in the name issue the Council did not follow the recommendation. In 2014 the new Commission stated that there would be no new Member State before 2020. This had probably a negative impact on the motivation and political will in Macedonia to reform the public administration.
The audit team confirms that this was a major reason for the limited progress in improving the public administration and administrative capacity observed in the audit. It did not help that the Commission reported accurately about the problems in the annual progress reports.
The latest progress report in 2015 stated that Macedonia has been “backsliding” in a number of areas related to the political criteria for becoming a member state.
Despite the absence of formal negotiations there were mechanisms in place for political dialogue. The Commission introduced a special sub-committee on public administration reform and a high-level accession dialogue (HLAD) directed by the then Commissioner Stefan Fule.
“We concluded that the effect of political dialogue on strengthen administrative capacity was weakened by different factors,” the audit team says. “The HLAD succeeded in promoting political dialogue in a stalemate situation but failed to deliver results because formal meetings could not take place once the opposition began its boycott of the parliament.”
The audit report has resulted in a number of recommendations – almost all of which have been accepted by the Commission. The Commission’s replies to the report have been published at the end of report. The Commission should among others improve follow-up of outputs and sustainability of impact. The Commission replies that it is reviewing the implementation of each programme upon its closure and reserves the right to recover funds if there are deviations between the expected results and funds used.
The audit team explains that the additional information provided by the Commission generally refers to events that have taken place after the audit or supplies clarification which the Commission wishes to add.
“In accepting the recommendations, the Commission agrees to act on them,” the audit team says. “The Court follows up how the Commission has done this and publishes its observations on whether and how well the follow-up was carried out.”
Macedonia has been suffering a political crisis since a wiretapping scandal was disclosed last year. Early parliamentary elections scheduled for 5 June have been cancelled with no new date set. Progress in Macedonia’s path to EU has been made conditional upon the resolution of the current political crisis in the country and the implementation of a number of urgent reform priorities.