Direct Management

• Year: 2022

DIRECT MANAGEMENT

48

6. DIRECT MANAGEMENT

6.1. Introduction

Section 6 contains a descriptive analysis of the data on recovery orders issued by

Commission services in relation to expenditures managed under ‘direct management’ mode,

which is one of the three implementation modes the Commission can use to implement the

budget.

According to the Financial Regulation, the Commission implements the budget directly

(‘direct management’) as set out in Articles 125 to 153, through its departments, including its

staff in the Union delegations under the authority of their respective Head of delegation, in

accordance with Article 60(2), or through executive agencies as referred to in Article 69

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.

For the financial year 2022, a total of EUR 81 201 million

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has been disbursed under

‘direct management’ mode, including payments in Recovery and Resilience policy area.

Table DM1 presents the actual payments by policy areas (excluding Recovery and

Resilience) and Table DM2 presents payments for Recovery and Resilience. Compared to

previous years, payments are higher.

Table DM1 – Payments made in financial year 2022 by policy area

Table DM2 – Payments made in financial year 2022 for Recovery and Resilience

In 2022, RRF accounted for EUR 47 223 million, representing alone the biggest part of

direct management. By the end of 2022, no recovery orders concerned the RRF.

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Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the

financial rules ap plicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU)

No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, ( EU) No 1316/2013, (EU) No

223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No

966/2012PE/13/2018/REV/1, OJ L 193, 30.7.2018, p. 1–222

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Own calculation based on ABAC data.

Policy area

Payments 2022

EUR million

%

Agriculture and Maritime Policy

418

1.3

Border Management

271

0.8

Defence

558

1.7

Environment and Climate Action

518

1.6

European Schools and Pensions

236

0.7

European Strategic Investments

5,437

16.5

External Action

6,546

19.9

Investing in People, Social Cohesion and Values

1,511

4.6

Migration

398

1.2

Pre-accession Assistance

669

2.0

Regional Development and Cohesion

2,031

6.2

Research and innovation

11,847

36.0

Security

91

0.3

Single Market

705

2.1

Space

44

0.1

Other Policies

1,612

4.9

Total (without Recovery and Resilience)

32,892

100.0

Policy area: Recovery and Resilience

Payments 2022

EUR million

%

Recovery and Resilience Facility (RRF) and Technical

Support Instrument

47,223

97.8

Other budget chapters

1,086

2.2

Total

48,309

100.0

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6.2. General analysis

For the financial year 2022, the Commission services registered 770 recovery items

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in

ABAC that were qualified as irregularities, for a total financial value of EUR 61.28

million

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. Among these recovery items, 37 have been reported as fraudulent, involving

EUR 5.67 million.

However, qualifications attributed to recovery items may change over the years: irregularities

may be turned into suspicions of fraud or the other way round, suspicions of fraud may be

reclassified as non-fraudulent irregularities, following an OLAF investigation.

6.2.1. Five year analysis 2018-2022

The following analysis gives an overview of recovery data recorded in the ABAC system in

the last five years (see Table DM3 below). From 2018 to 2022, on average, there were 42.6

recovery items per year qualified as ‘irregularities reported as fraudulent’

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. The ratio

between the financial amounts related to these irregularities and expenditure during

2018-2022 is close to zero (0.03%). This ratio is quite stable across years (see Table DM3

below).

Table DM3 – Irregularities reported as fraudulent and related amounts, fin ancial years 2018-2022

With regard to ‘irregularities not reported as fraudulent’, from 2018 to 2022, on average,

1 240 recovery items are recorded per year (see Table DM4 below). Since 2020, there is a

noticeable decline in the number of cases.

Table DM4 – Irregularities not reported as fraudulent and related amounts, financial years 201 8-2022

From 2018 to 2022, in total, there were 6 200 registered recovery items qualified as

‘irregularities not reported as fraudulent’, with an aggregate recovery amount of

EUR 267 million. The ratio between these aggregate irregular amounts involved in the

recovery items and expenditure during 2018-2022 is around 0.22% (see Table DM4). This

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Recovery items mean ‘recovery context’ elements in ABAC. There can be more recovery context elements

associated to one recovery order issued.

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Tables DM3 and DM4: sums for 2022.

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‘Irregularities repo rted as fraudulent’ are cases of recovery items qualified in the ABAC system as ‘OLAF

notified’.

Year

Payments

Irregularities reported

as fraudulent

Irregular

amounts/

Payments

EUR

million

N

EUR million

%

2018

20,816

44

6.17

0.03

2019

20,630

37

10.57

0.05

2020

26,579

41

9.15

0.03

2021

21,711

54

7.04

0.03

2022

32,892

37

5.67

0.02

Total

122,628

213

38.60

0.03

Year

Payments

Irregularities not

reported as fraudulent

Irregular

amounts/

Payments

EUR

million

N

EUR million

%

2018

20,816

1,579

66.97

0.32

2019

20,630

1,778

55.35

0.27

2020

26,579

1,285

53.22

0.20

2021

21,711

825

35.85

0.17

2022

32,892

733

55.61

0.17

Total

122,628

6200

267.00

0.22

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ratio has been steadily declining for many years now from the zone of 0,5-0,6% (seven years

ago).

6.3. Specific analysis

6.3.1. Recoveries according to legal entity residence

Table DM5 above shows the total recoveries made during the past five years by country of

residence of the legal entity to which the payment was unduly made.

During 2018-2022, with regard to ‘irregularities not reported as fraudulent’, 74% of the total

number of recovery items and 70% of the related recovery amounts concerned legal entities

that are resident of the EU-27

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. For ‘irregularities reported as fraudulent’, these ratios are

slightly lower: 73% of the total number of recovery items and 68% of the related recovery

amounts.

Table DM5 – Recoveries per country of residence of the legal entity, 2018 -2022

6.3.2. Method of detection

For each recovery item, the Commission service issuing the recovery order has to indicate

how the irregularity has been detected. Six different categories are pre-defined for this

purpose, two of which fall under the direct responsibility of the European Commission: ‘Ex-

ante controls’ and ‘Ex-post controls’. Table DM6 provides a breakdown of the recoveries by

source of detection and by qualification.

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The residence of the legal entity and the residence of the beneficiary are not necessarily the same.

LE Country

name

Irregularities

not reported as

fraudulent

Irregularities

reported as

fraudulent

N

EUR

million

N

EUR

million

Austria

137

9.12

0

0.00

Belgium

347

11.69

11

6.89

Bulgaria

30

1.00

0

0.00

Croatia

33

1.95

0

0.00

Cyprus

43

0.36

9

0.24

Czech Republic

33

4.10

2

0.05

Denmark

187

7.42

0

0.00

Estonia

16

1.01

7

0.67

Finland

68

8.96

3

0.66

France

574

18.69

23

4.24

Germany

537

27.46

9

2.35

Greece

139

4.29

5

0.43

Hungary

33

1.83

0

0.00

Ireland

99

3.27

1

0.09

Italy

389

21.04

32

4.41

Latvia

13

0.19

0

0.00

Lithuania

26

0.41

1

0.11

Luxembourg

17

0.35

0

0.00

Malta

45

0.67

0

0.00

Netherlands

398

17.04

7

1.54

Poland

90

1.74

3

0.17

Portugal

87

2.90

20

2.97

Romania

53

4.52

2

0.04

Slovakia

15

4.27

0

0.00

Slovenia

116

1.81

1

0.04

Spain

872

24.78

20

1.20

Sweden

159

6.38

0

0.00

Total EU 27

4556

187.22

156

26.09

United

Kingdom

713

32.50

23

5.74

Total other

countries

931

47.27

34

6.77

Grand Total

6200

267.00

213

38.60