The last Line of Defence at national Level for protecting the financial Interests of the European Union in the Cohesion Policy – Audit Authorities’ Role as Assurance Providers

Table of contents

LIST OF TABLES

LIST OF FIGURES

LIST OF BOXES

LIST OF ABBREVIATIONS

STATEMENT OF CONTRIBUTION

1 INTRODUCTION

2 WHAT IS COHESION POLICY ABOUT? - THE FUNDAMENTALS
2.1 Understanding Cohesion Policy
2.1.1 Definition of Cohesion Policy
2.1.2 Importance of Cohesion Policy in the overall political context
2.1.3 Implementation means
2.2 Governance structure and dimensions of Cohesion Policy
2.3 Cohesion Policy from a financial point of view
2.3.1 Financial planning of Cohesion Policy
2.3.2 Financial dimensions of Cohesion Policy
2.4 The multilevel governance system
2.4.1 Multilevel governance as an implementing model for Cohesion Policy
2.4.2 The principle of shared budget management as a result of a multi-level governance structure
2.5 The organisational set-up of Cohesion Policy and its main stakeholders
2.5.1 Main stakeholders at European level
2.5.1.1 The European Commission
2.5.1.2 The Council
2.5.1.3 The European Parliament
2.5.2 Programming and main stakeholders at national and regional level
2.5.2.1 Programming at national and regional level
2.5.2.2 Main stakeholders at Operational Programme level
2.6 The audit authorities' role
2.7 The single-audit concept
2.7.1 Background
2.7.2 Audit standards and guidance
2.7.3 Benefits of the single-audit concept
2.7.4 General principles for the application of the single-audit concept

3 RESPONSIBILITIES OF AUDIT AUTHORITIES
3.1 Introduction
3.2 Responsibilities of audit authorities
3.2.1 Compliance assessment of the management and control system
3.2.1.1 Programming period 2007-2013
3.2.1.2 Programming period 2014-2020
3.2.1.3 Programming period 2021-2027
3.2.2 Audits of operations
3.2.2.1 Programming period 2007-2013
3.2.2.2 Programming period 2014-2020
3.2.2.3 Programming period 2021-2027
3.2.3 Systems audits
3.2.3.1 Programming period 2007-2013
3.2.3.2 Programming period 2014-2020
3.2.3.3 Programming period 2021-2027
3.2.4 Annual control report
3.2.4.1 Programming period 2007-2013
3.2.4.2 Programming period 2014-2020
3.2.4.3 Programming period 2021-2027
3.2.5 Annual summary / Annual clearance
3.2.5.1 Programming period 2007-2013
3.2.5.2 Programming period 2014-2020
3.2.5.3 Programming period 2021-2027
3.2.6 Work at programme closure
3.2.6.1 Programming period 2007-2013
3.2.6.2 Programming period 2014-2020
3.2.6.3 Programming period 2021-2027
3.2.7 Checks on the reliability of performance data
3.2.7.1 Programming period 2007-2013
3.2.7.2 Programming period 2014-2020
3.2.7.3 Programming period 2021-2027

4 IMPACT OF THE AUDIT AUTHORITIES' WORK ON THE ASSURANCE LEVEL OF EU SPENDING
4.1 Development of error rates reports by the ECA
4.2 How does the ECA assess the AAs' work?
4.3 A modified assurance setup for the 2021-2027 programming period

5 CONCLUDING REMARKS

BIBLIOGRAPHY

List of tables

Abbildung in dieser Leseprobe nicht enthalten

List of figures

Figure 1: Cohesion spending as a proportion of the total EU budget since multiannual programming began in 1988

Figure 2: Management and financial flows of Cohesion Policy

Figure 3: Assurance pyramid for the internal control framework in Cohesion Policy

Figure 4: Delegation of audit work by AAs to other bodies

Figure 5: Internal control levels for chain-based model

Figure 6: Overview of responsibilities and tasks of the different control layers in the chain-based model

Figure 7: AAs tasks by period of execution

Figure 8: (Potential) overlap of tasks between the programming periods

Figure 9: Reporting and validation of performance data by managing and audit authorities

Figure 10: Long-term development of error ECA error rates

Figure 11: Gap between overall error rate and Cohesion error rate

Figure 12: Value of assurance packages with a residual rate above 2 %

List of boxes

Abbildung in dieser Leseprobe nicht enthalten

Statement of contribution

This book is based on the research conducted in the context of the subsequent published articles and books:

Bode, M. (2012a). Die Grundzüge von Systemprüfungen nach Art. 62 Abs. 1 lit. a VO (EG) 1083/2006. ZIR Zeitschrift Interne Revision (04.12), 174-183.

Bode, M. (2012b). Prüfungsumfang und Bewertungssystematik von EU- Systemprüfungen. ZIR Zeitschrift Interne Revision (06.12), 259-271.

Bode, M. (2013). Aufgabengebiete der Prüfbehörden im Rahmen der Strukturfondsförderung. Verwaltung und Management (3/2013), 150-164.

Bode, M. (2014). Abgrenzung des Prüfungsgegenstandes bei EU- Systemprüfungen. ZIR Zeitschrift Interne Revision (01.14), 13-22.

Bode, M. (2015). Financial Instruments in Cohesion Policy - Do the Legal Provisions for the 2014-2020 Programming Period Adequately Address Previous Shortcomings in the Way these Repayable Instruments were Implemented? European Structural and Investment Funds Journal, 3 (3), 173-186.

Bode, M. (2016). Making Better Use of the EU Budget through Financial Instruments - a Reality Check. European Structural and Investment Funds Journal, 4 (4), 179-203.

Bode, M. (2017). Governance Structure in the Area of Financial Instruments in the 2007-2013 and 2014-2020 Programming Periods. European Structural and Investment Funds Journal, 5 (4), 277-286.

Bode, M. (2019a). Functions and Responsibilities of National Audit Authorities in the Framework of the Cohesion Policy: A Synoptic Comparison Between the 2007-2013, 2014-2020, and 2021-2027 Programme Period. European Structural and Investment Funds Journal, 7 (1), 24-46.

Bode, M. (2019b). The Audit Authority's Role within the Single Audit Concept as Governance Principle in the EU's Cohesion Policy. European Structural and Investment Funds Journal, 7 (3), 105-111.

Bode, M. (2020a). Financial Implications and Effectiveness of National Audit Authorities' Task in the Framework of the European Union's Cohesion Policy. Berlin, Germany: Wissenschaftlicher Verlag Berlin (wvb).

Bode, M. (2021a). Systemprüfungen in der Kohäsionspolitik der EU. Berlin: Wissenschaftlicher Verlag Berlin (wvb).

Bode, M. (2021b). Funktionelle versus faktische Unabhängigkeit - Teil 1, Analysen zur Unabhängigkeit deutscher Prüfbehörden im Kontext der Kohäsionspolitik der Europäischen Union. Journal for Risk, Fraud & Compliance (ZRFC) (4/2021), 179-189.

Bode, M. (2021c). Funktionelle versus faktische Unabhängigkeit - Teil 2, Analysen zur Unabhängigkeit deutscher Prüfbehörden im Kontext der Kohäsionspolitik der Europäischen Union. Journal for Risk, Fraud & Compliance (ZRFC) (5/2021), 223-232.

Bode, M. (2021d). National Audit Authorities and their impact on the assurance level of the EU Cohesion Policy spending. VUZF review, 6 (1/2021), 113­123.

Bode, M.; Zippel, F.; Weber, M. (2021). Audit Authorities' Role as Assurance Providers in Cohesion Policy: From 2007-2013 to 2021-2027. European State Aid Law Quarterly (EStAL) (4/2021), 492-506.

Although certain passages are directly taken from these publications, the text does not necessarily refer to a detailed quotation of these sources. As these original publications are unique contributions of the author, individual references to the already published works is seen as dispensable. Instead, a general statement of contribution serves as a reference to these underlying sources.

1 Introduction

The European Union (EU) is committed to creating more and better jobs and a socially inclusive society. In this sense, EU cohesion policy plays a key role, as it aims to reduce development disparities between countries and regions, restructure declining industrial areas and encourage cross-border, transnational and interre­gional cooperation in the EU in order to strengthening economic, social and terri­torial cohesion.¹

The European Union's Cohesion Policy is one of the most dynamic policy fields within the European integration process. “Economic and social cohesion” - as defined in the 1986 Single European Act - is about “reducing disparities between the various regions and the backwardness of the least-favoured regions”. Based on the Single European Act, on 24 June 1988 the Council of the European Union agreed on a regulation, which puts existing EU funds into the context of “eco­nomic and social cohesion” and entered into force on 1 January 1989. In 2018, Cohesion Policy celebrated its 30th anniversary. The EU's most recent treaty, the Lisbon Treaty, adds another facet to cohesion, referring to “economic, social and territorial cohesion”. Cohesion Policy has evolved as a catalyst for further public and private funding, not only because it obliges Member States to co-finance in­tervention from the national budget, but also because it creates investor confi- dence.²

EU Cohesion Policy is also quite a controversial field of research. There is no consensus on the policy's impact: some regard it as a modern multilevel govern­ance tool for promoting research and innovation and as an indispensable instru­ment for enhancing equal opportunities, while others see it as a cumbersome and bureaucratic mechanism and question its effectiveness. Some even argue that there is no rationale for the EU to have a Cohesion Policy at all and that other mechanisms can be much more effective at reducing disparities between regions.³ The budget for this policy field has developed steadily and represents meanwhile more than one third of appropriations for the current multiannual financial frame­work. It is therefore the EU's main investment policy. However, Cohesion Policy has grown in importance, not just in financial terms but also qualitatively, as it has developed from a simple transfer mechanism into a complex and content-rich field with considerable steering effect. Cohesion Policy is now the EU's main financial tool for achieving its long-term strategic goals.⁴

In order to achieve Cohesion Policy's objectives and to ensure high impact for limited funds, a proper and effective management and control system is vital. Co­hesion Policy is implemented under shared management, which means that re­sponsibility for implementing the policy and the related funds, including control activities, is shared between the European Commission⁵ and the Member States. Although the Commission retains ultimate responsibility for implementing the EU budget, actual management and control of EU funds and programmes is del­egated to the Member States' authorities. Since management of the related funds is shared by the Member States and the Commission, the body that implements structural interventions is different from the fund provider. This calls for higher- level monitoring and inspection in order to prevent irregular and inefficient use of resources. The upshot is a decentralised delivery system with decentralised audit and control bodies.⁶

For the 2007-2013 programming period, a formal three-level control structure was introduced at national level for the first time, with the audit authority (AA) as the first “independent” audit layer. In principle, the audit authorities are a fur­ther development of the so-called control bodies, which, until the 2000-2006 programming period, were merely in charge of ex-post checks.⁷ Compared to these bodies, however, audit authorities are more independent and have a much broader and more robust mandate. Together with other structural reforms, the formalisation of the internal control structure with a clear separation of functions and greater independence for management and control bodies is regarded as a material contribution towards a more robust governance system in relation to the audit of Cohesion expenditure.⁸

Since the 2007-2013 programming period, three separate authorities have been established at Member State level, each with specific tasks: a managing author­ity (MA), a certifying authority (CA), and an audit authority. In this multi-level governance system, and based on the single-audit concept, AAs act as corner­stones of the overall assurance process by providing the Commission with assur­ance as to the effective functioning of the management systems and internal con­trols for operational programmes (OPs) - and thus the legality and regularity - of the expenditure certified by the Member State to the Commission.⁹

The structure of this study comprises of three major chapters plus an introduc­tion and an overall conclusion. The chapter following the introduction, frames the topic and deals with general considerations of the Cohesion Policy and its multilevel governance structure. This provides the theme for the third chapter, where the evolution of functions and responsibilities of national audit authorities are described and critically assessed. Based upon this analysis, the fourth chap­ter puts the focal point on the impact of the AAs' work on the assurance level of the EU's spending in the Cohesion Policy. Finally, the concluding remarks pre­sents summarises the main points and the results of each chapter and dares a view into the future.

2 What is Cohesion Policy about? - The fundamentals

2.1 Understanding Cohesion Policy

2.1.1 Definition of Cohesion Policy

The term “Cohesion Policy” has to be explained and put into context, as there is no common definition. Depending on the perspective and the academic field, Co­hesion Policy may be interpreted or practised as micro-economic initiatives (e.g. investment incentives for undertakings) or serve a macro-economic function (e.g. stabilisation in response to an economic crisis or unfavourable economic condi- tions).¹⁰

In the political context of the EU, cohesion policy is defined by the Treaty on the Functioning of the European Union (TFEU)¹¹. Title XVIII attributes powers to the EU in the policy field of “Economic, Social and Territorial Cohesion” (see Box1).

Box 1: Economic, Social and Territorial Cohesion according to Article 174 TFEU:

“In order to promote its overall harmonious development, the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion.

In particular, the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions.

Among the regions concerned, particular attention shall be paid to rural areas, areas affected by industrial transition, and regions which suffer from severe and permanent natural or demographic handicaps such as the north­ernmost regions with very low population density and island, cross-border and mountain regions.”

From this definition, it follows that Cohesion is a discrete policy field that cannot be limited to specific areas. It is a cross-cutting issue affecting different sectors and domains. As such, Cohesion Policy is one of the EU's most important policies, as it reflects the main values, objectives and fundamental principles of the Un- ion¹².¹³ Through its aim of promoting overall harmonised development and ad­dressing disparities between development levels in various regions, it essentially affects every European citizen, for instance through activities that aim to provide a favourable business environment, equal opportunities for access to quality edu­cation and a suitable job, or enhancing the general standard of living.¹⁴

2.1.2 Importance of Cohesion Policy in the overall political context

Cohesion Policy interventions contribute to the attainment of several of the Euro­pean Commission's political goals and priorities (see Box 2¹⁵ ), especially the green and digital transition, and are regarded as the most important EU investment instruments for the delivery of the European political objectives supporting growth and job creation at EU level and structural reforms at national level.¹⁶ The projects financed in the regions and cities directly contribute the goals of the Com­mission priorities, notably:

- A European Green Deal,
- A Europe fit for the digital age,
- An economy that works for the people.

This policy field impact many other fields, as its investments complements vari­ous EU policies such as those dealing with education, employment, energy, the environment, the single market, research and innovation.¹⁷

Box 2: European Union's Commission priorities for 2019-24

1. A European Green Deal

Europe aims to be the first climate-neutral continent by becoming a mod­ern, resource-efficient economy.

2. A Europe fit for the digital age

The EU's digital strategy will empower people with a new generation of technologies.

3. An economy that works for people

The EU must create a more attractive investment environment, and growth that creates quality jobs, especially for young people and small businesses.

4. A stronger Europe in the world

The EU will strengthen its voice in the world by championing multilateral­ism and a rules-based global order.

5. Promoting our European way of life

Europe must protect the rule of law if it is to stand up for justice and the EU's core values.

6. A new push for European democracy

We need to give Europeans a bigger say and protect our democracy from external interference such as disinformation and online hate messages.

Source : von der Leyen, 2019

In order to contribute to the Union priorities, cohesion policy funds focuses their support on a limited number of policy objectives (see Box 3), which are most relevant for a competitive and future-proof Europe.¹⁸

Cohesion policy measures have become a cornerstone of Europe's economic gov­ernance and a key contributor to the vital elements of prosperity namely invest­ment, structural reforms and accountable public finances. In particular, to cope with the aftermath of the economic crisis originated in the United States in 2008 and the economic downturn caused by the Corona-virus pandemic, this policy field is increasingly important as it has the potential of tackling the negative ef­fects in the short term and of enhancing the regions' endogenous potential for development in the medium term. Since major parts of its projects relate to energy, climate, digital services and infrastructure, and transport, cohesion policy also contributes to the “Digital Single Market” and the “Energy Union and Climate” and fosters the path to a low-carbon economy. Cohesion policy also contributes to the development of the internal market as well as a number of actions relating to the response to the refugee crisis and migration policy and several social issues, like moderating the effects of poverty and social exclusion of people.¹⁹

Box 3: Policy objectives for Cohesion Policy for the 2021-2027 program­ming period according to Article 5 of Regulation (EU) 2021/1060:

Article 5

Policy objectives

1. The ERDF, the ESF+, the Cohesion Fund and the EMFAF shall support the following policy objectives:

(a) a more competitive and smarter Europe by promoting innovative and smart economic transformation and regional ICT connectivity;
(b) a greener, low-carbon transitioning towards a net zero carbon economy and resilient Europe by promoting clean and fair energy transition, green and blue investment, the circular economy, climate change mitigation and adaptation, risk prevention and management, and sustainable urban mobil­ity;
(c) a more connected Europe by enhancing mobility;
(d) a more social and inclusive Europe implementing the European Pillar of Social Rights;
(e) a Europe closer to citizens by fostering the sustainable and integrated de­velopment of all types of territories and local initiatives.

The JTF shall support the specific objective of enabling regions and people to address the social, employment, economic and environmental impacts of the transition towards the Union's 2030 targets for energy and climate and a cli­mate-neutral economy of the Union by 2050, based on the Paris Agreement.

2. The ERDF, the ESF+, the Cohesion Fund and the JTF shall contribute to the actions of the Union, leading to the strengthening of its economic, social and territorial cohesion in accordance with Article 174 TFEU, by pursuing the following goals:

(a) the Investment for jobs and growth goal in Member States and regions, to be supported by the ERDF, the ESF+, the Cohesion Fund and the JTF; and
(b) the European territorial cooperation goal (Interreg), to be supported by the ERDF.

Source : European Parliament; Council, 2021

2.1.3 Implementation means

Since the 2000s, Cohesion Policy has become the EU's main investment policy and financial tool for achieving the strategic goals it sets for its long-term spend­ing under successive multiannual financial frameworks (MFFs). Cohesion policy covers all regions and cities of the European Union, helping to support job creation, business competitiveness, economic growth and sustainable development, and to improve citizens' quality of life.²⁰

Cohesion policy is financed jointly by EU and national/regional budgets, sometimes supplemented by private contributions. Traditionally, financial sup­port has mainly been provided through grants (around 97 % of the total cohesion policy budget²¹ ). The remainder is reimbursable support, through a range of fi­nancial instruments (loans, guarantees and equity investments).²²

EU financing is mainly provided through the following funds/instruments:

- the European Regional Development Fund (ERDF), which aims to redress the main regional imbalances through financial support for the creation of infrastructure and productive job-creating investment, mainly for businesses;
- the Cohesion Fund (CF), which, in the interest of promoting sustainable development, finances environment and transport projects in the least developed Member States (those with a per capita gross national income of less than 90 % of the EU average);
- the European Social Fund (ESF), which aims to encourage a high level of employment and the creation of more and better jobs, including measures under the Youth Employment Initiative targeting regions with a high youth unemployment rate.
- other smaller instruments/funds, such as the European Neighbourhood Instrument (support for cross-border cooperation and political initiatives to strengthen ties between the EU and its neighbours) and the Fund for European Aid to the Most Deprived (FEAD - material assistance to help people out of poverty).²³

Scholars and experts agree that Cohesion Policy comprises three main funds, i.e. the ERDF, the ESF, and the CF.²⁴ The legal framework underlying the implemen­tation of Cohesion Policy concentrates on these three funds.²⁵

2.2 Governance structure and dimensions of Cohesion Policy

Together with its cross-cutting nature, EU's Cohesion Policy can be defined as a “meta-governance” tool for horizontal policy coordination and integration, and involves all levels of government - from EU to local - alongside stakeholders from the private and third sectors in multi-level governance partnerships.²⁶

Ultimately, all policy areas may affect the economic development and standard of living of the citizens in their remit, and so influence regional imbalances. How­ever, EU Cohesion Policy differs from other policy areas by virtue of the policy instruments used to implement it.²⁷

According to Article 174 TFEU, Cohesion Policy consists of three main dimen­sions, i.e. economy, society and territory. Although the third dimension (territorial cohesion) is the most recent objective of Cohesion Policy²⁸, it can be regarded as its predominant pillar. It is not only explicitly mentioned in the second and third paragraphs of Article 174 TFEU. From a development perspective, a defining fea­ture of Cohesion Policy's rationale is its concern with the spatial aspects of eco­nomic and social activity. The core objective is to address problems associated with uneven economic growth and development across the EU by contributing to a greater balance and sustainable development.²⁹ Moreover, given the interven­tion logic and the implementation arrangements for the three main funds (see be­low), the Member States are finally in charge of implementing Cohesion Policy within their geographical remit.³⁰ It is clear that Europe's regions are both the targets and the recipients of the funds. Thus, even for the economic and social pillars of Cohesion Policy, there is a clear territorial orientation. As a result, the terms ‘Cohesion Policy' and ‘Regional Policy' are used synonymously.³¹

2.3 Cohesion Policy from a financial point of view

2.3.1 Financial planning of Cohesion Policy

Since the landmark reform in 1988³² the European Union and the Member States have planned and implemented Cohesion Policy on a multiannual basis. In this regard, the multiannual nature of policy programming reflects the multiannual na­ture of the budgetary procedure.³³

In a multiannual financial framework, the anticipated development of the Union's own resources forms the basis for expenditure ceilings for different policy areas. By setting expenditure ceilings for several years, the EU's budgetary policy is more predictable, thereby providing greater security for defining and implement­ing the EU's various activities and allowing Member States to align their own budget planning more closely with EU expenditure trends. Lastly, establishing a multiannual financial framework entails detailed regular reflection on the broad strategic lines of the EU's finances, such as a shared political assessment of the priorities to be pursued, the volume of the budget allocated to the various policy fields, and methods of financing. By setting such broad guidelines with a longer perspective, longer-term financial decisions are taken outside the annual budget­ary procedure in the form of a joint decision by the budgetary authorities (the European Parliament and the Council of the European Union). This enables the budgetary authorities in the annual budgetary cycle to focus more on the necessary political negotiations and on the effective distribution of available resources be­tween the EU's various operations, while taking the results achieved so far into consideration.³⁴

In this regard, interinstitutional agreements between the European Parliament, the Council of the European Union and the Commission³⁵ provide a foundation for discussing and resolving budgetary disputes between the various institutions, and constitute a kind of “Charter” of agreements reached by the institutions as regards the budget.³⁶ As such, they facilitate budgetary discipline, improve the function­ing of the annual budgetary procedure and ensure sound financial management.³⁷ Until the Lisbon Treaty,³⁸ the multiannual financial framework was part of inter- institutional agreements. The Lisbon Treaty was a milestone for budgetary plan­ning, offering greater certainty by elevating the planned appropriations for pay­ments and commitments from a non-binding interinstitutional agreement to a le­gally binding multiannual financial framework. Although interinstitutional agree­ments still exist, they concentrate more on operational and process-related issues than on the budget planning.

Article 312 TFEU requires the multiannual financial framework to ensure that Union expenditure develops in an orderly manner and within the limits of its own resources. The financial framework is established for a period of at least five years and the annual budget of the Union must comply with it.

Although financial programming provides guidance, it does not pre-empt options to be taken in the course of the annual budget procedure. Annual budgeting must still respect the financial allocations for multiannual programmes.³⁹

2.3.2 Financial dimensions of Cohesion Policy

In order to support job creation, business competitiveness, economic growth, sus­tainable development, and improve citizens' quality of life and to address the di­verse development needs in all EU regions, around a third of the total EU budget has been set aside for Cohesion Policy for 2021-2027. As Table 1 depicts, the importance of Cohesion Policy as the EU's main investment policy is reflected in the financial weight this policy area possesses in the multiannual financial frame­work (MFF). Cohesion funding for the 2014-2020 period amounted to some 371 billion euros or 34% of the 2014-2020 Multiannual Financial Framework (MFF). The 2021-2027 MFF spending area “Cohesion, Resilience and Values” will ac­count for 426.7 billion euros in total (35.2 % of the MFF budget). In addition, NGEU will provide 776.5 billion euros (96.3% of NGEU) for the spending area “Cohesion, Resilience and Values” (in current prices).

Table 1: The Multiannual financial framework 2021-2027 and the Next Gen­eration EU

Abbildung in dieser Leseprobe nicht enthalten

Source: European Commission, 2022c

Figure 1 provides an overview of Cohesion spending since multiannual program­ming began in 1988.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Cohesion spending as a proportion of the total EU budget since mul­tiannual programming began in 1988

Abbildung in dieser Leseprobe nicht enthalten

The figures in the chart are based on final planned budget appropriations for com­mitments before the respective programming period has started. The analysis does not take account of any revision of the multiannual framework during the pro­gramming period or any budget amendments, e.g. based on revised forecast of own resources,⁴⁰ as the aim is to depict the allocations at the beginning of a pro­gramming period as the result of intense political discussions. Furthermore, this means that values are nominal at the time of budget planning. Since the aim is to show Cohesion spending as a proportion of the total EU budget, inflation and real prices can be disregarded.

As Figure 1 shows, the share of funds dedicated to Cohesion has always exceeded 25 % of the total EU budget. The peak was reached during the 2007-2013 pro­gramming period, where enlargement of the EU by 10 (12) new Member States was envisaged. As the 10 (12) new Member States were economically less devel­oped than the existing Member States, a critical mass of investment is delivered through the ERDF and the CF to EU priority areas, the aim being to bring about structural change and respond to the needs of the real economy by supporting job creation, business competitiveness, economic growth and sustainable develop­ment, and by improving citizens' quality of life, thus contributing to the objectives of Cohesion Policy as enshrined in the Treaty.⁴¹

2.4 The multilevel governance system

2.4.1 Multilevel governance as an implementing model for Cohesion Policy

From a neo-institutional viewpoint, the EU is increasingly viewed as an intercon­nected multi-level system, with a focus on interaction between the supranational, national and sub-national levels.⁴²

A new school of thought known as multilevel governance emerged in the 1990s. This is essentially a combination of the theory of multi-level negotiations and the governance model of policy coordination and governance.⁴³ According to this school, European integration is “a policy-creating process in which authority and policy-making influence are shared across multiple levels of government - sub­national, national, and supranational”.⁴⁴ Unlike state-centred approaches, which regard the state as a single player and national governments as its decision-makers, the multi-level governance approach disaggregates the state and investigates the decision-making power of individual state authorities.⁴⁵ Multilevel-governance at European level derives from the EU principle of subsidiarity, which essentially means that authorities should perform only those activities, which cannot be car­ried out effectively at a lower level.⁴⁶ The EU multilevel-governance theory is based on a bottom-up policy perspective, where stakeholders at subnational level have an important role to play and possess considerable leeway.⁴⁷

For this school, national governments still have an important role to play, but their full individual and collective control over political decision-making is refuted for a variety of reasons. According to the multi-level governance model, decision­making powers are exercised at different levels rather than monopolised by state executives. In other words, supranational institutions - above all the European Commission, the Council, and the European Parliament - have independent in­fluence over policy-making that does not derive from their role as agents of state executives.⁴⁸

Representatives of multilevel governance object to the proposition that national governments “monopolise” national interests. Rather, supranational institutions, such as the European Commission, are in direct contact with regional and local stakeholders, rather than just with key government stakeholders.⁴⁹ Subnational stakeholders therefore have increasing influence on European policy making.⁵⁰

There are various stakeholders implementing Cohesion Policy, each with different roles and responsibilities (see 2.5 below). This system of shared decision-making and implementation powers between different levels and stakeholders from gov­ernments and administrations through to non-public stakeholders (e.g. the benefi­ciaries of policies) is an example of a highly developed multilevel-governance system.⁵¹ A multilevel-governance structure involving different stakeholders at different levels is more complex and burdensome than a central, hierarchical structure.⁵² This is particularly true for accountability arrangements, which are very important as the principal - the electorate in the former case and the legisla­ture in the latter - entails delegating powers to an agent, i.e. elected representa­tives and the executive branch, respectively. The more executive and implement­ing power is delegated and shared between different layers and stakeholders, the more principal-agent relationships are established. In order to ensure that the agent is not using its information advantages to the disadvantage of the principal or to the detriment of the principal's goals, the principal must include a safeguard mechanism. One option is proper control/audit and monitoring arrangements.⁵³

Academic research has identified two pre-conditions for effective implementation of a multi-level governance structure that achieves policy objectives but does not create accountability gaps:⁵⁴

- Sufficient administrative capacity in terms of management, programming, monitoring and evaluating;
- Political factors, such as political interference, stability and accountability.

In procedural terms, a proper accountability framework requires:⁵⁵

- A clear understanding of the roles and responsibilities of all stakeholders;
- Expectations that are mutually understood and realistic;
- Information to be clearly reported by all parties;
- Clarity about how and by whom performance will be reviewed and any ad­justments made.

This research project does not touch alternative accountability measures like

- a more clear determination of accountability of the different actors of the Co­hesion Policy down to the final beneficiary,
- clearer transparency rules of the different actors,
- focus on administrative capacity to assure an intended policy implementa­tion,
- incentive schemes to voluntarily achieve better result, which could also be considered to be linked to an effective and efficient Cohesion Policy with real impact. In this sense, the outcome of this study can also be un­derstood as an invitation for further research on these alternative accountability measures.

2.4.2 The principle of shared budget management as a result of a multi­level governance structure

Since 2012, the EU budget has been implemented in three different ways:⁵⁶

- Directly;
- Indirectly;
- In a shared capacity.

Since the budget is implemented using one of these methods, policy management also follows the same implementation principles. Under direct management⁵⁷, the European Commission implements the budget directly, meaning that implemen­tation is handled directly either by its own departments⁵⁸ or by executive agen- cies.⁵⁹ The Commission may also implement the budget indirectly by entrusting implementation tasks to third parties such as third countries, international organ­isations, the EIB and the EIF, or private-law bodies with a public service mission. The 2018 Financial Regulation (FR) sets certain conditions for entrusting third parties with budget implementation and stipulates that the Commission is respon­sible for supervising the parties concerned and for applying procedures for exam­ining and accepting the accounts and for excluding from Union financing any ex­penditure incurred in breach of the applicable rules.⁶⁰

The last implementation option for which the FR provides is shared management. Under shared management, responsibility for implementing policy fields and the related funds, including implementation monitoring, is shared by the Commission and the Member States. Although the Commission remains ultimately responsible for implementing the EU budget, responsibility for the actual management and control of EU funds and programmes lies with Member State authorities.⁶¹ Shared management is explicitly mentioned in the EU Treaty, which stipulates that the Commission shall implement the budget on its own responsibility in cooperation with the Member States and that Member States shall cooperate with the Com­mission to ensure that the principles of sound financial management are complied with.⁶² Discharge is granted to the Commission alone.⁶³ The Treaty also stipulates in Article 317 that the financial rules shall lay down the control and audit obliga­tions of the Member States in the implementation of the budget and the resulting responsibilities.⁶⁴ In conclusion, the shared management mode of budget imple­mentation is the result of the practical application of a multilevel governance ar­chitecture.

As the bulk of EU policies, including Cohesion Policy⁶⁵, are implemented under the principle of shared management, this type of management dominates the im­plementation of the EU budget and is primarily responsible for delivering political results. Responsibility for implementing Cohesion Policy and the related funds, including control activities, is therefore shared by the Commission and the Mem­ber States.

Sharing implementation of Cohesion Policy via its funds (see 2.1.1) makes it pos­sible to fulfil the long-term Cohesion Policy objectives of strengthening economic, social and territorial cohesion in the European Union. Compared to investments of the same size under direct management, the policy's specific features (e.g. aligning investment with EU-wide priorities, concentrating resources on less de­veloped and transitional regions, multiannual programming, a place-based ap­proach, multi-level governance, and interregional cooperation) increase the Euro­pean added value of the supported investments, while respecting the principle of subsidiarity.⁶⁶

Since management of Cohesion Policy funds is shared by the Member States and the Commission, the body that funds structural interventions is different from the body that implements them. As under shared management, only the European Commission - rather than the Member States - can be held politically accountable, an accountability gap might arise since the interests of the Commission as a rep­resentative of the Union do not always coincide with those of the Member States.⁶⁷ This requires higher-level monitoring and inspection in order to prevent irregular and inefficient use of resources. Lastly, this leads to a decentralised delivery sys­tem with decentralised audit and control bodies.⁶⁸ At the same time, however, such a system entails a higher control risk, as the number of control bodies involved is increasing, and the chains are longer. Although the multi-level management and control system aims to define the responsibilities of the different stakeholders clearly and to establish a system where one control level can build upon the pre­vious one, achieving this in practice is a challenge.⁶⁹

2.5 The organisational set-up of Cohesion Policy and its main stake­holders

Since Cohesion Policy is implemented using a multi-level governance approach, it involves a wide range of stakeholders at various levels. This chapter lists the main stakeholders involved and provides an overview of their individual respon- sibilities.⁷⁰

2.5.1 Main stakeholders at European level

The decision-making process for Cohesion Policy is primarily defined by:

- The European Commission;
- The Council of the EU;
- The European Parliament.

The European Parliament and the Council are key players when it comes to laying down implementing rules. This is also the case for oversight and discharge of the Commission's implementation of the budget.

In addition to these stakeholders, the Committee of the Regions, which comprises representatives of the regions, is also involved in a consultation capacity.⁷¹

2.5.1.1 The European Commission

The TEU exclusively grants the European Commission the right to initiate legis­lation (Article 17(2)). The Commission thus plays a pivotal role in advocating, establishing, expanding and reforming Cohesion Policy. It is able to formulate basic policy objectives, design the governance structure, implement strategies, in­sist on evaluation procedures for measuring possible achievements and failures, and lastly to draw up the budget for the policy field.

Although the Commission has the exclusive right of initiative, it does not act in isolation. In fact, there is intense interaction between the Commission and the Member States on one side and between the Commission, the Council and the European Parliament on the other side when legislative proposals are being drafted.⁷²

Operationally, the Commission executes its tasks via its Directorates-General (DGs). The primary DGs responsible for implementing Cohesion Policy are the Directorates-General for Regional and Urban Policy (DG REGIO) and for Em­ployment, Social affairs and Inclusion (DG EMPL).⁷³ For the part relating to

For the directly managed recovery and resilience facility under NextGenera- tionEU, Directorates-General for Economic and Financial Affair (DG ECFIN) to­gether with the Recovery and Resilience Task Force (RECOVER) are the main bodies at EU level coordinating the implementation.

2.5.1.2 The Council

The Council as legislative body comes into the spotlight once the European Commission has published its legislative proposals. Different configurations of committees and other bodies undertake the bulk of the Council's legislative work, e.g.:

- The General Affairs Council (GAC) is responsible for a number of cross-cut­ting policy areas, such as the adoption of the Multiannual Financial Frame­work and Cohesion Policy.⁷⁴
- As enshrined in Article 240 TFEU, the Committee of Permanent Representa­tives (COREPER) is composed of the permanent representatives from each Member State and is the Council's main preparatory body. Although CORE- PER is not an EU decision-making body, it plays a key role since all items to be placed on the Council's agenda (except for some agricultural matters) must first be examined by COREPER, unless the Council decides other- wise.⁷⁵
- Working parties also take over an essential part of the preparatory work. For example, the Working Party on Structural Measures mainly deals with the re­form of Cohesion Policy, economic, social and territorial cohesion, and mon­itoring the implementation and governance of Cohesion Policy projects. In this context, it reviews the Commission's proposals and - based on this - it prepares and drafts own proposals concerning Cohesion Policy and the gov­ernance of the relevant structural funds: the European Regional Development Fund, the European Social Fund and the Cohesion Fund.⁷⁶

Although the Council has a more important role than the European Parliament as far as the budget is concerned, for the sectoral legal framework (i.e. Cohesion Policy regulations) the Council has equal rights as the European Parliament in the “ordinary legislative procedure” according to Articles 289 and 294 TFEU.⁷⁷

2.5.1.3 The European Parliament

As the only directly elected and democratically legitimate EU body, the European Parliament possesses a mix of legislative, supervisory and budgetary responsibil- ities.⁷⁸ From a financial point of view, the European Parliament's power is limited to accepting or rejecting budgetary proposals by the Council for the Multiannual Financial Framework as part of the so-called “consent procedure”. However, in practice, the European Parliament actively contributes to the negotiations on long­term financial planning. As regards the sectoral legal framework, the European Parliament is a fully-fledged co-legislator with the Council under the “ordinary legislative procedure”.⁷⁹ A number of committees are involved in this work, e.g.:

- The Budget Committee, which is responsible for drafting the EU budget and the Multiannual Financial Framework. It therefore plays a crucial role in de­fining the financial means for implementing Cohesion Policy and thus the scope of intervention.⁸⁰
- The Regional Development Committee is the main legislative committee. It is responsible for the operation and development of the EU's regional devel­opment and cohesion policies, for assessing the impact of other Union poli­cies on economic and social cohesion, and for coordinating the Union's structural instruments.⁸¹
- The Committee on Budgetary Control is responsible, among other things, for scrutinising the implementation of the EU budget and for monitoring the cost­effectiveness of the various forms of EU financing when the Union's policies are implemented.⁸²

2.5.2 Programming and main stakeholders at national and regional level

2.5.2.1 Programming at national and regional level

As explained above (chapter 2.4.2), the implementation of Cohesion Policy is shared between the Commission and the Member States.

As a starting point for intervention at Member State level, a strategic framework is established at European level, with the objective of guiding the Member States and the regions in drafting their own strategic reference framework. The strategic framework aims to facilitate coordination and complementarity between interven­tions supported by the different funds under Cohesion Policy, and to ensure that full advantage is taken of the funding available in the Member States and re- gions.⁸³ For the 2007-2013 programming period, the Community Strategic Guide­lines (CSGs) served as a strategic framework.⁸⁴ For the 2014-2020 programming period, the Common Strategic Framework is laid down in the legal texts (Annex I of the CPR). A comparable detailed strategic planning reference is mission for the 2021-2027 programming period. The CPR (2021) solely give a template for drafting the partnership agreement.⁸⁵

The strategic framework serves as the basis for national and regional strategic priorities and planning. The outcome of this planning for the 2007-2013 program­ming period is the “National Strategic Reference Frameworks (NSRFs)”⁸⁶, and the “Partnership Agreements”⁸⁷ for the 2014-2020 and 2021-2027 programming periods, in which the Member States describe and specify their priorities. As the Commission must approve the NSRFs and the Partnership Agreements, it can en­sure that the national priorities and envisaged measures are in line with the EU's priorities and fit into the EU's strategic framework.

In a next step, and after the “broad” national strategic framework has been set, the regions step in and draft their Operational Programmes (OPs).⁸⁸ An OP is essen­tially a regional development strategy with a coherent set of priorities, i.e. specific objectives to be carried out with the aid of Cohesion Policy funds.⁸⁹ It defines concrete measures for the envisaged financial appropriations, and rules for select­ing projects for co-financing from the EU budget. The OPs must establish a link between regional strategy and EU strategy within the national strategic reference framework.⁹⁰ This is intended to provide assurance through the requirement to have the OPs adopted by the Commission.

For the 2007-2013 programming period, a total of 440 OPs were in force in the 28 Member States under the three funds (ERDF, CF and ESF). This number has fallen to 391 OPs for the 2014-2020 programming period.⁹¹

Based on the OPs, individual beneficiaries are selected as the ultimate recipients of EU support and so have ultimate responsibility for implementing Cohesion Policy.

2.5.2.2 Main stakeholders at Operational Programme level

In addition to the programming process described above, the Member States must designate certain authorities to manage and scrutinise intervention at regional level. These authorities are:⁹²

- The managing authority (and, where necessary, one or more intermediate bodies);
- The certifying authority;
- The audit authority.

Each of these bodies fulfils a specific task at OP level.⁹³ Together, they must en­sure the legality and regularity of the co-financed operations, under the Commis­sion's supervision and final responsibility.

Managing authorities are in charge of selecting operations to be co-financed by the EU, monitoring their progress and carrying out management verifications of the expenditure declared by beneficiaries and the achievements and results of each operation. MAs may delegate some of their tasks to intermediate bodies under their responsibility. Together with the certifying authorities, they are also respon­sible for carrying out “first-level” checks of operations and expenditure before the certifying authority declares to the Commission that the expenditure is legal and within the rules. Based on this certified declaration, the Commission calculates the amount of EU co-financing and authorises payment to be made to the pro­gramme.

The status of the certifying authority has weakened over time. Whereas in the 2007-2013 programming period, a separate certifying authority was obligatory (Article 59(1)(b) GR), by the 2014-2020 period the certifying authority's func­tions could be taken over by the managing authority (Article 123(3) CPR). For the 2021-2027 programming period, sectoral legal framework states only two pro­gramme authorities: the managing authority and the audit authority. The Member States will no longer need to officially appoint a certifying authority. The account­ing function previously entrusted to the certifying authorities will be taken over by the managing authority or another body.⁹⁴ Although the new structure clarifies the coverage and distribution of work between the managing authority and an “accounting entity” (formerly known as the certifying authority), the abolition of an additional layer of assurance - the certifying authorities that have performed ex-ante controls - will place greater responsibility on the managing authorities.⁹⁵

Audit authorities in the Member States must be functionally independent of the bodies implementing the programmes, i.e. the managing authority and the certi­fying authority. They are required to provide assurance to the Commission that an OP's management and control systems function effectively and, consequently, that the expenditure declared by the Member State to the Commission is legal and within the regulations.⁹⁶ In this role, they can be regarded as an extended arm of the Commission in the Member States as they are expected to provide independent 97 assurance.⁹⁷

Figure 2 provides an overview of the management and financial flow of Cohesion Policy.

Abbildung in dieser Leseprobe nicht enthalten

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¹ Bode, 2020a, p. 1 .

² Bode, 2020a, p. 1 ; Ahner, 2008, p. 1 ; Hübner, 2008, pp. 2-5 ; Cretu, 2018a, p. 3 .

³ Bode, 2020a, p. 1 ; Dhéret, 2011, p. 2 .

⁴ Bode, 2020a, p. 2 ; Karakatsanis G.; Weber M., 2016, p. 183 .

⁵ The terms “European Commission” and “Commission” are used synonymously in this paper.

⁶ Bode, 2020a, p. 2 .

⁷ Weber, M.; Latopoulou, C.; Guevara-Lopez, J., 2014, p. 41 ; See Articles 10 and 15 of Commission Regulation (EC) No 438/2001, European Commission, 2001 .

⁸ Weber, M.; Latopoulou, C.; Guevara-Lopez, J., 2014, p. 41 ; Karakatsanis G.; Weber M., 2016, pp. 172-174 .

⁹ Bode, 2020a, p. 3 ; European Court of Auditors, 2016a, p. 184 ; European Commission- DG Regio, 2009b, p. 2 ; European Commission, 2018c, p. 8 .

¹⁰ Bachtler, J., Mendez, C., Wishlade, F., 2013, p. 11

¹¹ European Union, 2012b .

¹² Unless otherwise stated, the words “Community”, “Union”, and “European Union” are used synonymously.

¹³ For example, Article 2 of the Treaty of the European Union (TEU) stipulates the values the EU is founded on, such as solidarity. Article 3 TEU states the main objectives of the EU such as promoting the well-being of its people or promoting economic, social and territorial cohesion, and solidarity between Member States European Union, 2012a .

¹⁴ Cretu, Editorial, 2018b, p. 3 .

¹⁵ European Commission, The European Commission's priorities, 2022a .

¹⁶ Darvus, Z.; Mazza, J.; Midoes, C., 2019, p. 1 .

¹⁷ European Commission, 2022b .

¹⁸ Recital 9 of Regulation (EU) No 2021/1060; European Commission, 2022b .

¹⁹ European Commission, 2019j, p. 30 .

²⁰ Bode, M.; Zippel, F.; Weber, M., 2021, p. 492 .

²¹ Based on the ESIF amounts committed to financial instruments by the end of 2019, which were €17.2 bn (out of the total ESIF budget of €521 bn. Data on financial instruments based on European Commission-DG Regio, Summaries of the data on the progress made in financing and implementing the financial instruments for the programming period 2014-2020 - Situation as at 31 December 2019. Data on total ESIF budget based on Commission's data as of 7 October 2021 (https://cohesiondata.ec.europa.eu/overview).

²² Bode, M.; Zippel, F.; Weber, M., 2021, pp. 492-493 .

²³ European Court of Auditors, 2018a, p. 204 ; Bode, M.; Zippel, F.; Weber, M., 2021, p. 493 .

²⁴ See for example Petzold, 2013, pp. 1236-1237 ; Stephenson, 2016, p. 42 ; Damen- Koedijk, 2016, pp. 24, 28 ; European Court of Auditors, 2017b, p. 13 ; Charron, 2016, p. 93 .

²⁵ See for example, Recital 2 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 of Commission Implementing Regulation (EC) No 1828/2006 (Common Provisions Regulation, CPR), European Parliament; Council, 2013a ; Recital 7 of Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 (General Regulation, GR), Council, 2006b .

²⁶ Bachtler, J., Mendez, C., Wishlade, F., 2013, pp. 11-12 ; An overview of the different stakeholders and institutions of Cohesion Policy is provided by Stephenson, 2016 or Damen-Koedijk, 2016, pp. 89-159 .

²⁷ Bode, 2020a, p. 12 .

²⁸ Introduced by the Lisbon Treaty European Union, 2007 and the EU's new high-level strategy (Europe 2020, European Commission, 2018b ).

²⁹ Bachtler, J., Mendez, C., Wishlade, F., 2013, p. 12 .

³⁰ The fact that the three funds are allocated to the Member States on the basis of operational programmes (OPs) (e.g. Article 76 in conjunction with Article 26 CPR) reveals this spatial focus. In the case of the ERDF and the ESF, the geographical scope is even narrower, as OPs are drawn up at regional level (Article 99 CPR).

³¹ Bode, 2020a, p. 14 .

³² Bode, 2020a, pp. 15-16 .

³³ European Commission, 2014c, p. 136 .

³⁴ European Commission, 2014c, p. 136 ; European Commission, 2008, pp. 159-160 .

³⁵ The most recent Interinstitutional Agreement dates from 2 December 2013 European Parliament; Council; European Commission, 2013 .

³⁶ European Commission, 2008, pp. 129, 228 .

³⁷ Recital 1 of the Interinstitutional Agreements between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management of 17 May 2006 European Parliament; Council; European Commission, 2006 .

³⁸ European Union, 2007 .

³⁹ European Commission, 2014c, p. 146 .

⁴⁰ For the different possibilities for revising and adjusting the EU budget, see European Commission, 2014c, pp. 136-148, 183 .

⁴¹ European Commission-DG Regio, 2018a, p. 2 .

⁴² Scharpf, 1994 ; Marks, 1993 ; Schoof, 2002, p. 15 ; Milio, 2010, pp. 12-14 ; Gualini, 2016, pp. 507-509 ; Damen-Koedijk, 2016, pp. 32-33 .

⁴³ Lang, J.; Nasholt, F.; Reissert, B., 1998, p. 342 .

⁴⁴ Marks, G.; Hooghe, L.; Blank, K., 1996, p. 342 .

⁴⁵ Marks, 1993, p. 339 ; Milio, 2010, pp. 12-13 ; Gualini, 2016, pp. 507-508 .

⁴⁶ Barca, 2009, p. 2 .

⁴⁷ Milio, 2010, pp. 11-12 .

⁴⁸ Marks, G.; Hooghe, L.; Blank, K., 1996, pp. 346-347 .

⁴⁹ Marks, 1993, p. 369 ; Gualini, 2016, pp. 507-508 .

⁵⁰ On the discussion of the different motivations for transferring power to another level, see Marks, G.; Hooghe, L.; Blank, K., 1996, pp. 349-350, 354 .

⁵¹ Damen-Koedijk, 2016, p. 32 ; Gualini, 2016, pp. 507-508 ; Papadopoulos, 2010, S. 1031

⁵² Milio, 2010, p. 12 ; Knill, 2006, p. 362 ; Damen-Koedijk, 2016, pp. 226-227 .

⁵³ Damen-Koedijk, 2016, pp. 41-59 .

⁵⁴Milio, 2010, pp. 175-181 .

⁵⁵Cipriani, 2010, p. 5 .

⁵⁶ Article 62 of Regulation (EU, Euratom) No 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable 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 966/2012 (Financial Regulation 2018, FR (2018)), European Parliament; Council, 2018 ; Before 2012, the Financial Regulation envisaged five types of management: direct management, shared management, indirect centralised management, decentralised management and joint management, European Commission, 2014c, p. 223 .

⁵⁷ Articles 125-153 FR (2018).

⁵⁸ In this case, the Commission's various departments carry out the measures concerned without the involvement of the Member States or non-member countries where the recipients of the expenditure reside, European Commission, 2014c, p. 223 .

⁵⁹ If the Commission delegates programme management to executive agencies, the latter are responsible for implementing tasks that are merely executive and do not entail a large measure of discretion involving political choices. The executive agencies carry out these tasks under Commission supervision European Commission, 2014c, pp. 223-224

⁶⁰ Article 154-159 FR 2018; European Commission, 2014c, pp. 225-226 .

⁶¹ Bode, 2019a, p. 25 ; Article 59 of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (Financial Regulation 2012, FR (2012)), European Parliament; Council, 2012 , European Court of Auditors, 2017b, p. 13 .

⁶² Article 317 TFEU.

⁶³ Article 319 TFEU.

⁶⁴ European Commission, 2014c, p. 224 .

⁶⁵ Article 14(1) GR for the 2007-2013 period; Article 4(7) CPR for 2014-2020 programme period; Recital 179 FR (2018); European Commission, 2014c, p. 223 .

⁶⁶ European Commission-DG Regio, 2018a, p. 4 .

⁶⁷ Karakatsanis G.; Weber M., 2016, p. 172 ; Porras-Gomez, 2014 ; Cipriani, 2010 .

⁶⁸ Schoof, 2002, p. 22 .

⁶⁹ Bode, 2019a, p. 25 ; Bode, 2013, p. 151 .

⁷⁰ For a more detailed overview of the different stakeholders, see Stephenson, 2016 and Bachtler, J.; Mendez, C., 2016 .

⁷¹ For an overview of the Committee of the Regions and its role within Cohesion Policy, see Schönlau, 2016 .

⁷² Tömmel, 2016, pp. 107-108 .

⁷³ Bachtler, J.; Mendez, C., 2016, p. 122 .

⁷⁴ European Council; Council of the European Union, 2019a .

⁷⁵ European Council; Council of the European Union, 2019b .

⁷⁶ European Council; Council of the European Union, 2019c .

⁷⁷ Bachtler, J.; Mendez, C., 2016, p. 123 .

⁷⁸ Hübner, 2016 ; For an overview, see Stephenson, 2016 . More details on the European Parliament's role in Cohesion Policy are provided by Hübner, 2016 .

⁷⁹ Bachtler, J.; Mendez, C., 2016, p. 124 .

⁸⁰ European Parliament, 2019a, p. 156 .

⁸¹ Ibid, pp. 160-161.

⁸² Ibid, pp. 156-157.

⁸³ Damen-Koedijk, 2016, p. 25 ; European Commission, 2015b, p. 19 ; Council, 2006a, p. 2 ; Article 10 CPR; No 1 of Annex I of the CPR.

⁸⁴ Council, 2006a ; Damen-Koedijk, 2016, p. 25 .

⁸⁵ Annex II to the CPR (2021), REGULATION (EU) 2021/1060 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (Common Provisions Regulation 2021, CPR (2021)), European Parliament; Council, 2021 .

⁸⁶ Articles 27-28 GR .

⁸⁷ Articles 5, 14-17 CPR.

⁸⁸ Article 32 GR; Articles 26-29 CPR ; Articles 21-24 CPR (2021).

⁸⁹ Article 2(1) GR and Article 27(1) CPR; Article 22 CPR (2021).

⁹⁰ Petzold, 2013, p. 1237 .

⁹¹ Karakatsanis G.; Weber M., 2016, p. 173 ; European Court of Auditors, 2017b, p. 15 .

⁹² Article 59 GR for the 2007-2013 programme period; Article 123 CPR for the 2014-2020 programme period and Article 71 CPR (2021) for the 2021-2027 programming period.

⁹³ The tasks of the different authorities are stipulated in the sectoral regulations (Articles 60, 61 and 62 GR for the 2007-2013 programme period, Articles 125, 126 and 127 CPR for the 2014-2020 programme period; Articles 72-77 CPR (2021) for the 2021-2027 prgramming period).

⁹⁴ Article 71 (1) CPR (2021).

⁹⁵ European Court of Auditors, 2018e, pp. 45-46 .

⁹⁶ European Court of Auditors, 2018a, p. 212 ; Article 71 (2), 77 (1) CPR (2021); Article 123 (4), 127 CPR; Article 59 (1) c, 62 GR.

⁹⁷ Bode, 2019a, p. 26 .