The European Court of Auditors produced a report

http://eca.europa.eu/portal/pls/portal/docs/1/7912812.PDF(external link)

Special Report No 5/2010 — Implementation of the Leader approach for rural development

Leader is a method to achieve the objectives
of the EU’s rural development policy
through bottom-up implementation
rather than the traditional top-down
approach. Compared with traditional
methods of funding, the Leader approach
involves higher costs and risks, owing to
an additional layer of implementation,
and giving the control of the EU budget
to a multitude of local partnerships
(LAGs: local action groups).

The justification for Leader’s additional
costs and risks is the added value that
should flow from the bottom-up and
partnership approach — such as better
identification of local needs and local
solutions, more engagement on the part
of local stakeholders and greater scope
for innovation.

The Court examined whether the Leader
approach has been implemented in ways
that add value, while minimising the
risks to sound financial management. The
Court assessed the LAGs’ performance in
implementing the 2000–06 Leader+ programmes,
for which the final expenditure
was in 2009. The Court also assessed the
LAGs’ Axis 4 strategies, which set out
their plans for implementing the Leader
approach in the 2007–13 period.


LAGs implemented the Leader approach
in ways that limited the potential for
added value in terms of the ‘Leader
features’ although the Court found
some examples of good practice. The
bottom-up approach was limited in the
LAGs that gave the majority of the grants
to their own member organisations; the
potential added value of a partnership
was not achieved in LAGs where the decision-
making was dominated by the local
authorities; few LAGs could demonstrate
innovation or interaction between different
sectors in their strategies or projects.
LAGs did not focus on achieving the
objectives of their local strategies.

The Court also found weaknesses in the
soundness of the financial management
by the LAGs. In particular, LAGs gave
grants to projects without regard to
efficiency. Procedures were not always
transparent and did not sufficiently demonstrate
that the LAGs took decisions on
an objective basis, free from conflicts of
interest. These weaknesses echo those
observed by the Court in the Annual
Report of 2000.

The Commission and Member States have
not been sufficiently demanding and
share some responsibility with the LAGs
for limiting the potential added value
of the Leader approach. They have not
taken sufficient action to limit the costs
and risks. Ten years on from the Court’s
previous audit of Leader, the same weaknesses

The Commission has not yet demonstrated
the effectiveness or efficiency
of the expenditure, the added value
achieved through following the Leader
approach, the extent to which the known
risks have materialised or the real costs
of implementation.

In view of the persistent weaknesses, the
Court recommends that the Commission
and Member States clarify and enforce
requirements to reduce the risk of deadweight,
ensure objective and properly
documented project selection procedures,
and that the partnership principle
operates in practice. Robust procedures
to avoid all risk of conflicts of interest
are needed to comply with the financial
regulation. This requires declarations
of interest, non-participation in project
assessment and selection, and referral of
cases of potential conflict of interest to
the managing authority.

For the remainder of the 2007–13 period,
the Commission should ensure that Member
States require the LAGs to set measurable
objectives, specific to their local
area, that can be achieved by the Leader
programme. The Member States should
require LAGs to account for achieving
their local strategy objectives, for achieving
added value through the Leader
approach, and for the efficiency of the
grant expenditure and the operating

Monitoring should be refocused on the
added value of the Leader approach, efficiency
and effectiveness, and be complemented
by data from supervisory and
control systems such that the Commission
has sufficient, reliable and relevant
data to account for the added value
and sound financial management of the
Leader programmes.

Created by Peter Ramsden3328 points . Last Modification: Friday 09 of March, 2012 16:04:48 GMT by Peter Ramsden3328 points . (Version 6)