On control, transparency and traceability of performance-based instruments
CONT-PR-778127
Committee on Budgetary Control · Rapporteur: Monika Hohlmeier
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This draft report on control, transparency and traceability of performance-based instruments sets out Parliament's concerns and recommendations. It warns against generalised use of financing not linked to costs and calls for stronger safeguards, transparency and parliamentary oversight.¶¶¶
Committee position. The rapporteur proposes a resolution that warns against generalised use of financing not linked to costs and calls for stronger control, transparency and accountability measures for performance-based instruments.¶¶¶
Key points
- Reaffirms that performance-based instruments must respect legality, regularity, economy, efficiency and effectiveness, and that simplification must not undermine sound financial management.¶
- Notes that the RRF model has been replicated in the Ukraine Facility and Western Balkans Facility, and that the Commission proposes similar models for most EU programmes in the next MFF.¶
- Reiterates concern about weaknesses in the RRF model, including reduced accountability, limited EU-level oversight, insufficient transparency on final recipients, and inadequate involvement of subnational entities.¶
- Considers that RRF financing focuses more on outputs than results and calls for more specific key performance indicators in future instruments.¶
- Stresses that reliance on ex ante cost estimates without verification of actual expenditure creates an accountability gap and risks undermining economy and efficiency.¶
- Is extremely concerned about generalised use of FNLC in the next MFF without adequate safeguards or a comprehensive evaluation of the RRF, and asserts that it increases risks of irregularities, double funding and fraud.¶¶
- Notes that at the end of 2024 the EPPO was handling 311 active cases related to NextGenerationEU, with estimated damage of EUR 2.8 billion, representing 30% of all EU expenditure fraud damage.¶
- Calls on the Commission to take corrective measures against systemic weaknesses in Member States' control systems, and notes the absence of clear standards for when national systems are considered insufficient.¶¶
- Calls for a single, integrated and interoperable information and monitoring system, with use as a precondition for accessing Union funding in the next MFF.¶¶
- Demands that the Commission establish and publish clear thresholds for corrective measures, and that assessments of milestones and targets be performed by the Commission with transparent methodology.¶¶
- Demands greater transparency, including timely publication of assessments and data, and insists that Parliament's prerogatives be respected.¶¶
- Calls for enhanced reporting, improved audit trails, robust safeguards for audit work, and introduction of AI-powered predictive analytic tools.¶¶¶
Who is affected
- Member States and beneficiaries of EU funds: FNLC should not be generalised; large projects should remain cost-based, and smaller beneficiaries may use lump sums.¶
- National audit authorities: must comply with international standards and adapt to performance-based auditing.¶¶
- European Commission: must establish thresholds, perform assessments, and ensure safeguards for financial instruments.¶¶¶
- European Parliament and ECA: should have access to all data and assessments.¶¶
Figures and deadlines
- 311 active EPPO cases related to NextGenerationEU at the end of 2024, all but four concerning the RRF.¶
- Estimated damage to EU financial interests: EUR 2.8 billion, representing 30% of total estimated damage from EU expenditure fraud.
Legal basis: Articles 311, 312, 319, 323 and 324 of the Treaty on the Functioning of the European Union¶