Oskar Herics, a member of the European Court of Auditors, discusses the impact of the EU’s JASPERS initiative on investment in social cohesion, following the ECA’s review of its operations.
The JASPERS story started in 2006, when the European Commission, together with the European Investment Bank (EIB), agreed to establish a new initiative known as “Joint Assistance to Support Projects in European Regions” or in short, JASPERS, in recognition of the need for greater investment in social cohesion. The EIB is managing the initiative within a dedicated JASPERS department which employs around 120 members of staff.
The importance of JASPERS
JASPERS was one of the European Union’s responses to the 2004, and later, enlargements. Member states that joined the EU after 2004 could benefit from relatively large amounts of EU funding. The new money came principally through the Cohesion Fund and the European Regional Development Fund (ERDF) – both aiming to improve and reinforce the economy and generate investment in social cohesion in the Union through regional support.
It was only natural that when these countries joined the EU their administrations had limited experience and capacity of managing EU funds and preparing and implementing projects according to the EU’s requirements. The Commission was quick to act in order to address this weakness and engaged in the new initiative, together with the EIB and two other partners.
The aim was to provide new member states with independent and free-of-charge advice for the preparation of high-quality, large-scale projects, which typically involve significant investment in social cohesion and other areas to receive EU co-financing. This in turn would enable the countries to obtain the full benefits from the EU cohesion policy at many different levels. In addition, it would allow the Commission to approve the projects more quickly.
The advice consisted of both technical assistance and capacity-building activities for all stages of project development, primarily from the initial identification of potentially eligible projects through to grant approval.
JASPERS most often provided assistance in five areas:
- Feasibility studies;
- Project application forms;
- Cost-benefit analysis;
- Environmental issues; and
- Funding and financing issues.
From 2014 onwards, when JASPERS started to carry out independent quality reviews as part of the Commission’s major project approval procedure, the JASPERS initiative was opened up to all member states and candidate countries.
Facts and figures
Between 2006 and the end of 2016 – the period the European Court of Auditors (ECA) reviewed – the Commission approved over 950 major projects under the 2007-2013 programme period. JASPERS supported more than half of them. The total amount invested was around €78 billion and the EU contribution was €46 billion.
The actual cost of JASPERS, between commencing operations in 2006 and the end of 2016, was about €284 million. Around 79% was funded from the EU budget, the remainder being provided by other partners in the form of staff assigned to JASPERS.
Until the end of 2016, JASPERS completed more than:
- 700 assignments related to major projects;
- Nearly 200 for non-major projects; and
- Over 200 horizontal, strategic advisory and capacity-building assignments.
During the 2007-2013 programme period, JASPERS-supported projects generated over €10 billion of the EIB’s lending volume. For the 2014-2020 programme period, the figure is expected to be broadly similar.
Under the EU Auditors’ microscope
Investment in social cohesion is an area on which a significant proportion of the EU budget is spent and as such is regularly subject to ECA audits. It aims to:
- Reduce development disparities between different regions;
- Restructure declining industrial areas;
- Diversify rural areas; and to
- Encourage cross-border, transnational and interregional co-operation.
The ECA has an audit chamber that is principally responsible for auditing the investment in social cohesion, including the areas of growth and inclusion. Given the financial investment at stake, and the importance we place on spending delivering value for money, JASPERS came onto our radar and we included it in the work plan for 2016 as a priority.
As the guardians of the financial interests of the EU citizens, we assessed whether JASPERS had made a positive contribution to EU co-financed projects in the member states supported. In particular, we examined its institutional set-up and the planning of activities, the impact of its activities on the quality of projects and countries’ administrative capacity, and its monitoring and evaluation systems.
We carried out our audit work at the Commission, at the EIB’s JASPERS department, the JASPERS Steering Committee, and in four member states – Croatia, Malta, Poland and Romania – chosen in relation to how much JASPERS assistance they had received, their geographical distribution, and their level of experience with using EU funds. For Croatia and Poland, we performed our audit in co-operation with their supreme audit institutions which were carrying out their own audits on the impact of JASPERS at a national level at the same time.
Overall conclusions drawn
In short, we found that JASPERS assistance by the Commission and the EIB needs better targeting. This is in order to achieve the most added value through effective and efficient activities at reasonable costs. We found weaknesses in the definition of JASPERS’ main objectives and roles and responsibilities.
This resulted in shortcomings in its operations and put its accountability at risk. While JASPERS was originally conceived as a temporary initiative for the 2007 to 2013 programme period, and then extended to the 2014-2020 period, it has no clear measurable objectives to show that its purpose has been achieved.
At the start of the 2014-2020 programme period, JASPERS also began to support delayed major projects which had to be carried over from the previous programme period, and further encouraged member states to increase their use of its free-of-charge assistance during the project implementation stage. Neither of these was a priority.
There were also significant weaknesses in establishing the new independent quality review function for 2014-2020. The functional independence of JASPERS’ quality review was detracted because the same person was responsible for signing off both the quality reviews and the advisory work. We also noted a high risk of a lack of impartiality of the quality review in relation to JASPERS’ advisory function.
The assistance provided by JASPERS was:
- Relatively comprehensive;
- Contributed to quicker project approval; and
- In general, had an impact on the quality of the major projects audited.
In fact, we found it to have more impact on planned cost and less on the planned scope, results and implementation timeline of these projects. We also observed that, overall, major projects assisted by JASPERS were less frequently affected by legality and regularity errors during our 2014 and 2015 compliance audit exercises than non-assisted projects. But, JASPERS could generally not have an impact on the absorption of EU funds, mainly because of delays which occurred at the level of major projects audited.
Although JASPERS increased its focus over time on building member states’ administrative capacity, its impact on administrative capacity did not result in higher degrees of independence from its assistance. National authorities and project beneficiaries both stated that JASPERS had a positive impact on their administrative capacity and this was also observed by the Croatian and Polish supreme audit institutions. However, we found no evidence to confirm whether this improvement had actually materialised.
In conclusion, the observed weaknesses, combined with significant shortcomings in the planning, monitoring and evaluation, put at risk the successful operation of the JASPERS initiative, particularly in terms of efficiency and effectiveness.
We make a number of recommendations for improvement to the Commission. In essence, we recommended the Commission should:
- Take more control over the strategic planning of JASPERS, allowing it to be phased out when its main objectives have been met;
- It should also take immediate action to mitigate the high risk of a lack of impartiality when JASPERS independently reviews projects that have received advisory support.
- Furthermore, it should obtain full access to verify the quality of JASPERS’ independent review procedures;
- We also recommended that the Commission should target JASPERS’ assistance according to the project’s development and maintain its focus on advice for major projects, as well as integrate JASPERS activities into its own technical assistance strategy;
- In addition, it should adjust JASPERS’ capacity-building activities in member states over time to provide incentives for them to reach a sustainable level of administrative capacity; and
- Finally, it should introduce comprehensive monitoring and evaluation, and ensure JASPERS’ costs are reasonable and reflect the actual costs incurred.
We note that the Commission has essentially accepted all of our recommendations which shows that there is a lot of support from its side on these issues. This is also a point that we underlined when we presented our report at the European Parliament’s Committee on Budgetary Control and to the Council of the EU. We look forward to being able to see the impact of our work on JASPERS in the near future.
Oskar Herics is a former senior auditor at the Austrian Court of Audit, where he was also heading its economy and finance division. He became a member of the ECA in March 2014, dealing with the areas of investment in social cohesion, growth and inclusion. He has been a reporting member for performance audits on a range of topics including maritime transport, state aid and public private partnerships.
European Court of Auditors (ECA)