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April 15, 2021

IPP: Romania, the lowest EU funds absorption rate, yet the highest level of financial corrections

Romania has the lowest absorption rate of EU funds and the highest level of financial corrections, with public procurement being the most sensitive area with respect to mistakes related to the use of public money, according to the Institute of Public Policy (IPP).

Mediafax quoted IPP programs director Elena Iorga as saying that the total approximate amount of financial corrections made by Dec 2012 comes to 300 M euro, or nearly 20 pc of the structural funds absorbed during the similar interval. “Romania has the lowest absorption rate of funds of EU 27 and the highest level of financial corrections, which is double of Spain’s (158 M euro) and 15 times more than Poland’s (24 M) or Germany (22 M),” Iorga, told the launch conference of a collection containing notes ascertaining illegalities and establishing financial corrections to  structural fund financing projects.Also, she pointed out that the average value of a financial correction to such project was of nearly 13 pc, 400.000 euro, of the budget for a public procurement project. “The most frequent type of financial correction are those representing 5 pc of the procurement budget, 25 pc of the contract value respectively, although there are also instances when corrections were as high as100 pc of the value of the contract concerned,” Iorga, said, who gave the Olt County council as an example where the financial correction matched RON 16,994,012 (nearly 3.7 M euro).Yet, it was the Tulcea County Council where the highest correction was applied, RON 30.655.809, about 7 M EUR for a works contract. Tudor Pendiuc, president of the Romanian Association of Municipalities (AMR), said that most of the difficulties and problems surrounding implementation of EU financing projects “are rooted in the lack of cooperation and solidarity between local and central or control authorities “.

The authors of the report show that public procurements make the bulk of the mistakes with respect to the use of European funds and the most important reason for the ineligibility of the spending made. They also said that field data show that a decline in corrections could only happen if control authorities draft financial correction prevention guidelines, including practical examples, but also a unifying process of the jurisprudence in the control documents area and application of financial corrections.

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