Key lessons

• Author: Mélissa Campagno - Goya Razavi - Brian Kessler - Léna Bonnemains - Olga Mala
• Pages: 49-52

DG REGIO

Study on the implementation of Article 125(4)(c) of the CPR in the Member States

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7. Key lessons

The following are some of t he key takeaways from this study of anti -fraud and corruption measures

in the implementation of ESI Funds.

Anti-fraud and anti-corruption efforts are more formalised and

systematic in the 2014-2020 programming period

New legislative requirements to address fraud and corruption in ESI Funds f or the 2014-2020

programming period have catalysed a num ber of changes at MS level that have resulted in a more

formalised and more systematic approach. The FRA process is one example. A number of

authorities had in place some form of fraud risk assessment process prior to 2014, often in the

context of a broader risk assessment. Using the FRA template helped to put more focus on fraud

and corruption risks , and created clear links between identified risks and specific mitigating

measures. And of course, going through this process, and having the list of EC-recommended

mitigation measures at hand did contribute to some authorities adopting new c ontrols, or

improving existing ones. In this way, the EC effort to increase the focus on anti -fraud and

corruption amo ng ESI Funds authorities in the 2014 -2020 programming period has had a

significant positive impact.

The mitigating measures implemented are generally proportionate to

the self-assessed risks

The obligations of Article 125(4)(c), and thus a primary focus of this study, is that OP authorities

put in place measures proportional to the identified fraud and corruption risks. Based on the

analysis of the sam ple of FRAs, we concluded that overall, authorities are i mplementing mitigation

measures that are proportional to the self -identified risks. In fact, the team identified just a handful

of instances where the measures in place were considered truly inadequate to the ris ks. This

highlights the effort put in place by author ities in order to conduct a fraud risk assessment and

mitigation of identified risks through appropriate controls.

Proportionality was lowest for collusive bidding and double funding

Of the 6 risk categories analysed, collusive bidding a nd double funding were the two where there

was the greatest room for improvement in terms of implementing proportional mitigating

measures, particularly amon g high risk OP’s in Member States with a low CPI score. Often ,

authorities implemented neither EC-recommended measures nor ad ditional detection measures.

As these ris ks are particularly difficult to detect, it is crucial to devise appropriate measures to

reduce the level of ris k assessed. Particularly, concerning collusive bidding, authorities did not

impose rules on b eneficiaries to control the procurement process to detect c ollusive bidding.

Moreover, authorities often d id not conduct checks themselves on companies and third parties

participating in tenders. Concerning double funding, crosschecks w ere lacking in some high and

medium risk OPs to identify identical projects funded under different OPs.

Some authorities may underestimate the risks during the self-

assessment

A comparison between the self-assessed level of risk by authorities of the OPs in the sample and

external indicators of potential fraud and corruption risks at the MS level, notably Transparency

International’s Corru ption Perception Index , shows a discrepancy. This indicates that MS may be

assessing the level of fraud risks differently. Indeed, there was an observed pattern of authorities in

MS with moderate fraud risk indicators, and to a lesser extent those with low fraud risk indicators,

assessing their risks as higher than countries with high risk indicators. This indicates that some

authorities in countries with higher fraud risks are underestimat ing risks for fraud and corruption

compared with authorities from countries with lower fraud risks.

If this were the case, it would have an impact on the conclusion on proportionality, which are

dependent on the self-assessed level of risk. Concretely speaking, it would mean that the above

analysis somewhat underestimates the proportionality of mitigation measures in low perceived risk