Auditors criticise commission's outsourcing policy

VALENTINA POP

24.11.2009 @ 09:22 CET

EUOBSERVER / BRUSSELS – The EU commission did not properly think through its plan to externalise the management of some EU-funded programmes in the areas of research, education, innovation, transport and health to special agencies, a report by the European Court of Auditors shows.

In order to focus more on policy-planning and relieve its services from the day-to-day management of EU projects, the European Commission set up six special so-called executive agencies.

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The total budget they are managing until 2013 is around €32 billion, which represents a fifth of the commission's directly-managed money. Most of the EU budget, amounting to €864 billion in 2007-2013, is co-managed by member states and the commission.

The externalisation process began in 2003, following a 1999 corruption scandal that saw the EU executive led by Jacques Santer resign en masse.

At the time, private contractors in so-called technical assistance offices were managing large parts of the EU-funded programmes, raising doubts in the EU legislature over the lack of financial scrutiny.

But a report by the European Court of Auditors published last Friday (20 November) shows that the process was "mainly driven by the need to compensate for staff shortages at the commission rather than being part of a general reform."

The savings seen by the externalisation stem largely from the fact that agency staff are paid less than commission staff.

The report also notes that the commission ignored some of the related costs to the externalising process, for instance the additional staff needed to supervise the agencies, or the costs of running the programmes beyond the established life-span of a particular agency.

In reply, the commission pointed out that neither the European Parliament nor member states objected to the cost-benefit assessment put forward before setting up these agencies.

Auditors also criticised Mr Barroso's outgoing commission for lacking "fully effective supervision of the agencies' work," with no "results-oriented objectives and related targets" assigned to these new bodies.

"Monitoring, whilst making use of a large number of indicators, is focused on how the tasks are carried out rather than on the results produced. Reporting is usually limited to budgetary data and does not identify corrective actions for the future," the report notes.

"It's a learning process," commission spokeswoman Valerie Rampi told this website, pointing out that at the time the audit was carried out, only four agencies were fully functional.

The work of the agencies themselves, however, was deemed to be more efficient than the commission's own services. For instance, the contracting time for public health projects was reduced from almost one year to 219 days, while the period required for approving technical and financial reports shrank from 90 to 42 days. Agencies also seemed more media-savvy than the commission when publicising their results.

MEPs sitting on the budgetary control committee said the auditors' report proves the need to have more scrutiny over the commission's externalisation drive. "There is a risk with the commission focussing only on policy-planning, that it loses touch with the reality of managing the complex programmes it creates," German Christian-Democrat MEP Ingeborg Grassle told this website.

The issue would be taken up by her committee as part of the larger muscle-flexing of the EU legislature, which will be granted more decision-making powers after the Lisbon Treaty comes into force on 1 December. A moratorium on setting up new executive agencies was put in place in 2007.

For now, the commission is in the process of reviewing all EU agencies, including the so-called regulatory ones, such as the Food Safety Authority or the Plant Variety Office, which are independent and located in other member states. A report is due by the end of the year.