EU fund­ing through NGOs must be more trans­par­ent, say au­di­tors

The Malta Business Weekly - - NEWS -

The way in which EU fund­ing is chan­nelled through NGOs (Non­Govern­men­tal Or­gan­i­sa­tions) for hu­man­i­tar­ian and de­vel­op­ment aid, en­vi­ron­men­tal pro­tec­tion, cul­ture and other pur­poses needs to be more trans­par­ent, ac­cord­ing to a new re­port by the Euro­pean Court of Au­di­tors.

The cur­rent sys­tem of clas­si­fy­ing or­gan­i­sa­tions as NGOs is not re­li­able, warn the au­di­tors, and the Euro­pean Com­mis­sion does not have suf­fi­ciently de­tailed in­for­ma­tion on how the money is spent. There is a sim­i­lar lack of clar­ity when EU money is paid to NGOs in­di­rectly through United Na­tions bod­ies.

NGOs help the Euro­pean Com­mis­sion to de­sign, im­ple­ment and mon­i­tor EU pro­grammes in many pol­icy ar­eas, such as hu­man­i­tar­ian and de­vel­op­ment aid, the en­vi­ron­ment, and re­search and in­no­va­tion. Be­tween 2014 and 2017, the Com­mis­sion planned an es­ti­mated €11.3 bil­lion of spend­ing for use by NGOs.

The au­di­tors ex­am­ined the Com­mis­sion’s iden­ti­fi­ca­tion of NGOs, the use of EU funds by NGOs and whether the Com­mis­sion dis­closed this in­for­ma­tion in a trans­par­ent man­ner. They fo­cused in par­tic­u­lar on ex­ter­nal ac­tion.

The au­di­tors con­cluded that the Com­mis­sion is not suf­fi­ciently trans­par­ent re­gard­ing the use of EU funds by NGOs. The as­sign­ment of NGO sta­tus in the Com­mis­sion’s ac­count­ing sys­tem, which is based on self-dec­la­ra­tion, and the limited checks, make the clas­si­fi­ca­tion of an en­tity as an NGO un­re­li­able, they say.

While the se­lec­tion of NGO-led projects is gen­er­ally trans­par­ent, dif­fer­ent Com­mis­sion de­part­ments do not man­age grants awarded by third par­ties in the same way, and the se­lec­tion process for NGOs among the UN bod­ies au­dited is not al­ways trans­par­ent.

The data col­lected on EU funds used by NGOs is not uni­form, say the au­di­tors, and the Com­mis­sion does not have com­pre­hen­sive in­for­ma­tion, par­tic­u­larly with net­works of in­ter­na­tional NGOs and projects un­der in­di­rect man­age­ment. Fur­ther­more, in in­di­rect man­age­ment, the lack of in­for­ma­tion avail­able hin­ders checks on costs.

“The EU is the world’s big­gest aid donor and NGOs of­ten play an es­sen­tial role in de­liv­er­ing that aid. But EU tax­pay­ers need to know that their money is be­ing paid over to prop­erly de­fined or­gan­i­sa­tions and that the Com­mis­sion will have to ac­count for it fully,” said An­ne­mie Turtel­boom, the Mem­ber of the Euro­pean Court of Au­di­tors re­spon­si­ble for the re­port.

In­for­ma­tion on EU funds used by NGOs is pub­lished in sev­eral sys­tems, but the amount of de­tail dis­closed is limited, say the au­di­tors, al­though the Com­mis­sion gen­er­ally re­ports data on hu­man­i­tar­ian and de­vel­op­ment aid in ac­cor­dance with in­ter­na­tional trans­parency stan­dards. UN bod­ies ei­ther did not pub­lish, or only par­tially pub­lished, the con­tracts awarded to NGOs in five of the six projects au­dited, and the Com­mis­sion did not check whether the UN bod­ies had ful­filled this re­quire­ment.

The au­di­tors rec­om­mend that the Euro­pean Com­mis­sion should: • im­prove the re­li­a­bil­ity of the in­for­ma­tion on NGOs in its ac­count­ing sys­tem;

• check the ap­pli­ca­tion of rules and pro­ce­dures re­gard­ing EU grants to NGOs by third par­ties; • im­prove the in­for­ma­tion col­lect

ed on funds spent by NGOs; • adopt a uni­form ap­proach to pub­lish­ing de­tails of funds pro­vided to NGOs;

• ver­ify UN bod­ies’ pub­li­ca­tion of com­plete and ac­cu­rate data on EU fund­ing awarded to NGOs.

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