Changes from report parliamentary committee draft to plenary report

123. Calls on the Commission to:

(i) closely monitor the Member States’ progress as regards the processing of performance data and the aggregation of data for the annual performance report and keep the discharge authority informed about issues with reliability of performance data, in particular where it concerns manually aggregated data;

(ii) inform the discharge authority why the Court concludes that for several years several errors could have been prevented, had the Commission and Member States used all information at their disposal and why the Commission and Member States do not manage to address this issue appropriately;

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Changed(iii) apply the lessons learned as regards the reduction of the administrative burden from its response to the farmers’ protests in future policy initiatives, while taking due account of the risk of abuse of funds where control measures are concerned,reduced, or risk of too much divergence between Member States when discretionary powers are used without proper oversight;

(iv) keep the discharge authority informed about the recovery rates of agricultural expenditure, in particular if the rate deteriorates in comparison to the recovery rate under the previous CAP and swiftly mitigate the causes for the deterioration, including considering the introduction of new incentives for Member State authorities to recover funds;

(v) assess the differences in ambition of strategic plans and inform the discharge authority whether there is divergence between Member States, threatening the level-playing field for farmers, and assess how the Commission addresses those differences;

(vi) make better use of its capacity for setting-up performance frameworks, for defining objectives and indicators and holding those contributing to the achievements, be they Member States or beneficiaries, accountable for their contributions;

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Removed(vii) make the results of the screening of grant agreements and other contracts available to the discharge authority in order to allow an assessment of the extent to which the Commission is exposed to a reputational risk of entering into agreements that call for explicit actions to lobby members of the discharge authority; with the necessary independent assurance on its reliability by the IAS;

Added(vii) update the Commission’s anti-fraud strategy to devote attention to advocating for and upholding a clear separation of executive and legislative power in the Union;

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Changed(viii) immediatelyhave suspenda orclear canceland grantcomprehensive agreementsstrategy withat NGOsCommission whichlevel areas into violationhow ofto better protect the financial rulesinterests of the Union and toensure supplementthat theUnion Commissionfunds guidanceare withspent concretefor proposalstheir forintended avoidingpurposes thatand EUdiligently fundingapply isthe usedFinancial toRegulation activelyprovisions, lobbyincluding EUby Institutions,ensuring suchthat asgrant self-declarations;agreements welcomescan thebe announcementssuspended madeor byterminated thewhen newbeneficiaries Commissionviolate inthe thisUnion's regard;legislation;

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Removed(ix) further develop its internal guidance related to grant agreements containing specific lobbying activities;

Added(ix) ensure a fair distribution of Union funds to CSOs to contribute to a pluralistic and vibrant society;

Removed(x) revise the Memorandum of Understanding between CINEA and DG ENV “Inter-institutional single framework contracts, in two lots, for the provision of support for the monitoring of LIFE projects (action grants and operating grants), communication about the LIFE programme and other related activities” to include a clearer division of responsibilities when awarding contracts;

Added(x) ensure that the Commission’s guidance adopted in 2024 is applied by all authorising officers and, if necessary, further develop guidance to fully align grant agreements with Treaty provisions and existing legislation;

Removed(xi) let the audit structure, including DG ENV unit A4, systematically review contracts with NGOs and DG ENV/CINEA and to flag problematic contracts immediately;

Added(xi) make the results of the screening of grant agreements available to the discharge authority in order to allow an assessment of the extent to which the Commission may be exposed to a reputational risk;

Removed(xii) have the IAS systematically review contracts between the Commission and NGOs, specifically to search for problematic content within work packages;

Added(xii) adequately address issues such as revolving doors, transparency in financing and donations, the fight against money laundering, limiting foreign interference, independence from political and economic influence, whistleblowing and transparent governance structures, in respect of all entities receiving Union funds;

Removed(xiii) make structural and staff changes with DG ENV, in particular to the decision-making structure in the areas of the awarding of contracts;

Added(xiii) review the template for MoUs between the Commission and executive agencies to ensure clearer division of responsibilities;

Removed(xiv) adopt more precise categorisation of entities listed in the Financial Transparency System (including through a clear differentiation between NGOs and NFPOs);

Added(xiv) instruct the audit structure to review contracts with beneficiaries and to flag in case they identify contracts that are not in line with applicable financial rules;

Removed(xv) consider reviewing its rules for special advisers to remove the arbitrary selection and remuneration;

Added(xv) have the IAS review contracts between the Commission and grantees, specifically to search for content that is not in line with applicable financial rules within work packages;

Added(xvi) evaluate the decision-making structure in the areas of the awarding of contracts and instruct Commission services and executive agencies to perform better checks on the content of contracts at all stages, including by ensuring that work packages and key performance indicators as listed by applicants align with the objectives of respective funding programmes;

Added(xvii) adopt more precise categorisation of entities listed in the Financial Transparency System;

Added(xviii) review its rules for special advisers to remove the arbitrary selection and remuneration;

(xix) further enhance simplification in the implementation of programmes and work closely with Member States to identify best practices regarding the digitalisation of practices and procedures;

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Added(xx) improve the quality of dialogue with farmers from all Member States;

Added(xxi) react more quickly when serious concerns of the discharge authority are flagged to the Commission;

Added(xxii) perform adequate checks of entities listed in the Transparency Register, in order to ensure that they comprehensively list their activities in the Register;

Added(xxiii) draw clearer lines of responsibility when implementing collaborative platforms;

Added(xxiv) instruct the Corporate Management Board to submit consolidated information on the list of critical risks to the internal audit service and ensure executive agencies address potential risks and ensure a transparent selection of independent evaluators to prevent conflict of interest and guarantee their independence;

Added(xxv) instruct all DGs and executive agencies to review the distribution of funds dedicated to auditing in order to ensure sufficient resources;

Added(xxvi) ensure that proposals for Multiannual Work Programmes of any Union funding instrument have clear guidelines on the activities eligible for funding, clearer rules on screening of applications and on admissible content as well as clearer requirements for transparency and traceability of the use of Union funds, including in relation to the disclosure requirements under the EU Transparency Register;

Added(xxvii) ensure that all grant agreements respect the necessary requirements related to transparency, traceability and visibility of funds;

▸6 unchanged paragraphs

Migration and Border management

124. Notes that in 2023 the budget for the programmes under MFF heading 4 ‘Migration and Border Management’ was EUR 2,7 billion (1,4 % of the Union budget spending) distributed as follows: 1,2 billion (46,5 %) for three decentralised agencies, the European Boarder Coast Agency (FRONTEX), the European Union Agency for Asylum (EUAA) and the European Union Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice (EU- LISA); 1 billion (38,6 %) for the Asylum, Migration and Integration Fund (AMIF), and 0,4 billion (14,9 %) for the Integrated Border Management Fund (IBMF);

125. Notes that in 2023 a significant portion of the spending under MFF heading 4 still concerned the completion of projects remaining from the 2014-2020 MFF; notes that 18 % of AMIF national programmes for 2014-2020 remained undeclared at the end of 2023 and that the last annual accounts and the request for payment of the final balance for these funds will be provided by the Member States as part of the closure package by 31 December 2024 at the latest;

126. Notes that the Court examined a sample of 23 transactions, which is not large enough to be representative of the spending under MFF headings 4 and 5 and, thus, it cannot provide a separate estimate of the error rate for these headings; further notes that the Court’s audit results show that the expenditure under MFF headings 4 and 5 is affected by eligibility and procurement issues and that it is a high-risk area (7 out of 23 transactions audited, i.e. 30,4 %, were affected by errors); is concerned that the Court detected four quantifiable errors which had a financial impact on the amounts charged to the Union budget and that it also found further ten cases of non-compliance with legal and financial provisions (which had no direct financial impact on the Union budget); therefore, invites the Court to provide a clear estimate of the error rate for heading 4; notes that the Commission concludes that the risk at payment in 2023 is 1,1 % for the expenditure on migration and border management;

127. Notes that the Commission has accepted the Court’s recommendation made in its annual report for 2023 to provide further guidance on applicable rules to the Member State authorities responsible for implementing DG HOME funding via shared management; regrets that the Commission has not yet fully implemented the Court’s previous recommendations that were due to be addressed by the end of 2023; notes that DG HOME is undertaking a reassessment of its ex-ante methodology to ensure the respect of the rules applicable to post-2021 generation of grants, and that this reassessment will also address the Court’s relevant recommendations and those of the IAS audit on the preparedness for closing actions and programmes funded under the Internal Security Fund (ISF) and the AMIF 2014-2020 through direct and shared management;

128. Notes with concern that two reservations on the declaration of assurance were issued in DG HOME’s Annual Activity Report for 2023 and that one reservation concerns the implementation of AMIF and ISF 2014-2020 in several Member States and the other reservation concerns the implementation of Border Management and Visa Instrument (BMVI) 2021-2027 in one Member State; welcomes the Commission’s commitment to take remedial measures for the underlying issues that necessitated the reservations;

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Changed98.129. Welcomes the progress identified by the Court in its review of the preparatory work done by five member state audit authorities in managing the transition of the AMIF, BMVI and ISF funds to the CPR of the 2021-2027 MFF; observes that these audit authorities reported to the Court that the support and guidance DG HOME provided to them was satisfactory; notes with concern that at the time of the Court’s audit four out of five -MemberMember State audit authorities had not finalised their audit strategies;

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Changed99. Welcomes the new Pact on130. MigrationTakes andnote Asylum,of forthe whichadoption politicalof agreementthe wasNew reachedPact inon 2023,Migration and furtherAsylum; welcomes that the mid-term revision of the Multiannual Financial FrameworkMFF 2021-2027 allocated an additional EUR 2 billion to migration and border management for 2024-2027 to address the growing challenges in migration and border management resulting from the current geopolitical context; notes, however, that additional funds might be needed with a view to ensuring the full implementation of the Pact; calls for the quick implementation of the Pact in the Member States;

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Changed100.131. RecallsStresses that securing the Union’s external borders is a pillar of the New Pact on Migration and Asylum; notes with concern that the Commission reported that the number of irregular border crossings in the Union increased in 2023 to 380 000, compared to 330 000 in 2022; underlinesobserves that the needBMVI tocan bettersupport protectfrontline vulnerableMember peopleStates fromto smugglingensure andthey traffickinghave networksthe resources for infrastructure, facilities and installations necessary to addresssecure the negativeexternal effectsborders of the instrumentalisationUnion, ofincluding migrantselectronic border security enhancements and other tools for border surveillance as partprovided for in annex III of hybridthe attacks,BMVI notablyregulation; bynotes pro-Russianthe forces;European observesCouncil conclusions of 9 February 2023 that the AMIFUnion will step up its action to prevent irregular departures and loss of life, to reduce pressure on the BMVIborders canof supportthe MemberUnion Statesand inon reinforcingreception theircapacities, borderto protectionfight capabilities,against includingsmugglers physicaland infrastructure,to buildings,increase equipment,returns; systemsunderlines the need to better protect vulnerable people from smuggling and servicestrafficking requirednetworks atand borderaddress crossingthe points;negative effects of the instrumentalisation of migrants as part of hybrid attacks, notably by pro-Russian forces, as well as by the Belarusian regime;

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Removed101. Notes the Court’s conclusion that the AMIF 2014-2020 was performing below expectations in terms of facilitating returns of migrants: also takes note of the fact that the Court and the Commission agree that progress in this area was particularly affected by COVID-19-related travel restrictions; further notes that in 2023 return measures were supported with EUR 29,8 million from the AMIF; looks forward to receiving consolidated information in 2025 on progress in this regard through the ex-post evaluation AMIF 2014-2020;

Added132. Recalls that, according to Regulation (EU) 2021/1060, Member States and the Commission must ensure respect for fundamental rights and compliance with the Charter of Fundamental Rights of the European Union in the implementation of Union funds;

Added133. Notes the Court’s conclusion that the AMIF 2014-2020 was performing below expectations in terms of facilitating returns of migrants: also takes note of the fact that the Court and the Commission agree that progress in this area was particularly affected by COVID-19-related travel restrictions; further notes that in 2023 return measures were supported with EUR 29,8 million from the AMIF; considers that the Commission must provide stronger efforts to assist Member States in addressing irregular border crossing and in successfully implementing returns of third-country nationals, as well as the integration of legal migrants; looks forward to receiving consolidated information in 2025 on progress in this regard through the ex-post evaluation AMIF 2014-2020; highlights that the Commission should continue to take action on migration and asylum within the framework of external action, including the ‘Team Europe’ approach while also increasing the transparency of the programming and implementation of the Union home affairs funds in third countries and safeguarding the role of the Parliament;

▸4 unchanged paragraphs

Recommendations

134. Calls on the Commission to:

(i) address the Court’s recommendations in a thorough and timely manner and share DG HOME’s revised ex-ante methodology, once completed, with the discharge authority;

(ii) continue to support the Member State managing and audit authorities in the timely finalisation of their audit strategies for MFF 2021-2027 funds, paying particular attention to eligibility and procurement issues, as well as all other recurrent findings of the Court;

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Changed(iii) take action to improve the performance of EU-funded actions funded by the Union in terms of effective returns and combatting irregular migration, while ensuring the full respect of Union legislation and the fundamental values of the Union in the process;Union;

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Added(iv) take action to increase the efficiency of Union spending on the protection and management of the European Union’s external borders;

Added(v) monitor, assist in and scrutinise the timely progress of the administrative, operational and legal steps required by Member States and Union agencies for the full implementation of the New Pact on Migration and Asylum by 2026;

Added(vi) increase the transparency of the programming and implementation of the Union home affairs funds in third countries, while safeguarding the role of Parliament in ensuring the democratic scrutiny of Union spending;

Added(vii) continuously assess, in the implementation of the Union Budget, compliance with the Charter of Fundamental Rights and the Union values enshrined in Article 2 TEU, in accordance with Article 6 of the Financial Regulation;

Security and Defence

135. Notes that in 2023 the budget for the programmes under MFF heading 5 ‘Security and Defence’ was EUR 1,4 billion (0,7 % of the Union budget spending) distributed as follows: 500 million (38,4 %) for the European Defence Fund (EDF), 300 million (19 %) for military mobility, 200 million (17,1 %) for decentralised agencies, namely the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), Europol and European Union Agency for Law Enforcement Training (CEPOL), 200 million (13,1 %) for the ISF, and 200 million (12,4 %) for nuclear safety, decommissioning and other areas;

136. Notes that in 2023 a significant portion of the spending under MFF heading 5 still concerned the completion of projects remaining from the 2014-2020 MFF; notes that 25 % of ISF national programmes for 2014-2020 remained undeclared at the end of 2023 and that the last annual accounts and the request for payment of the final balance for these funds will be provided by the Member States as part of the closure package by 31 December 2024 at the latest;