Report on the Dutch EU member state declaration 2011

Conclusions

It can be seen from the member state declaration that the systems function and irregular expenditure is corrected when detected. We found the following shortcomings, however, at the Ministry of Economic Affairs, Agriculture and Innovation (ELI): 

• the European Commission included financial corrections of nearly €52 million in last year's accounts in respect of 2003-2008;
• inspection of cross-compliance is not up to standard;
• the European Fisheries Fund and the European Regional Development Fund exceeded the 2% error margin. 

At the Ministry for Immigration, Integration and Asylum Policy (IIA) we found a shortcoming in the management and control of the European Integration Fund. The minister was unable to close the accounts for this financially very small fund (€0.9 million) within 18 months.

Remittance of own resources

We again draw attention in our report to the remittance of own resources to the European budget, €5.6 billion in 2011. The inclusion of the remittances in the member state declaration would produce comprehensive EU accounts at member state level. Furthermore, it would address the gap highlighted by the European Court of Auditors in the control chain for the European budget at member state level. As part of its audit of the completeness of receipts from the European Commission, the European Court of Audit observes that it cannot directly audit the underlying activities and data processing that serve as input for the statistics.

Recommendations

In our report, we make 15 recommendations to the Ministers of Finance, ELI and for IIA. Some of the most important recommendations relate to: 

• the repeated recommendation that own resources be included in the member state declaration;
• more concrete measures to prevent financial corrections and recover undue payments from the beneficiaries. An improvement plan would contain concrete targets, actions and time-bound milestones to reduce future financial corrections;
• additional insight into the annual expenditure of the budgets available for the multiyear programming period.

Responses

In response to our report, the Ministers of Finance, ELI and for IIA undertook to adopt 13 of our 15 recommendations. We will continue to follow closely the effectiveness of the measures launched, according to the Minister of ELI, in 2010 to prevent financial corrections. The ministers will not adopt two of our recommendations in full or in part. These recommendations relate to: 

• the repeated recommendation to include own resources in the member state declaration;
• additional insight into the annual expenditure of the budgets available for the multiyear programming period.

We share the ministers' response that the European Court of Auditors has expressed a positive opinion on the funds received (including own resources) by the European Commission. We would again note, however, that the European Court of Auditors' audit does not cover basic data in the member states.

The member state declaration

By addressing an EU member state declaration to the European Commission and the Dutch parliament, the Netherlands wishes to improve management, control and accountability for the funds it spends under shared management with the European Commission. The member state declaration is issued annually by the Minister of Finance on behalf of the government. The Netherlands Court of Audit has expressed an opinion to parliament on the Dutch EU member state each year since 2005.

The Dutch EU member state declaration for 2011 considers nine European funds. The Minister of ELI is responsible for grants disbursed from the following funds:

• the European Agricultural Guarantee Fund (€877.2 million); 
• the European Agricultural Fund for Regional Development (€71.4 million);
• the European Regional Development Fund (€59.9 million); 
• the European Fisheries Fund (€1.6 million).

The Minister of Social Affairs and Employment is responsible for grants disbursed from the European Social Fund (€50.8 million). The Minister for IIA is responsible for grants disbursed from:

• the European Integration Fund (PM);
• the European External Borders Fund (€1.0 million);
• the European Return Fund (€0.4 million);
• the European Refugee Fund (€2.4 million).