ISSN 1831-0834
Special Report No 2
2011
EUROPEAN
COURT OF AUDITORS
FOLLOW-UP OF SPECIAL REPORT No 1/2005
CONCERNING THE MANAGEMENT OF THE
EUROPEAN ANTI-FRAUD OFFICE
EN
Special Report
No 2
2011
FOLLOW-UP OF
SPECIAL REPORT No 1/2005
CONCERNING THE
MANAGEMENT OF THE
EUROPEAN ANTI-FRAUD
OFFICE
(pursuant to Article 287(4), second subparagraph, TFEU)
EUROPEAN COURT OF AUDITORS
EUROPEAN COURT OF AUDITORS
12, rue Alcide De Gasperi
1615 Luxembourg
LUXEMBOURG
Tel. +352 4398-1
Fax +352 4398-46410
e-mail: [email protected]
Internet: http://www.eca.europa.eu
Special Report
No 2
2011
A great deal of additional information on the European Union is available on the Internet.
It can be accessed through the Europa server (http://europa.eu).
Cataloguing data can be found at the end of this publication
Luxembourg: Publications Office of the European Union, 2011
ISBN 978-92-9237-115-9
doi:10.2865/7996
© European Union, 2011
Reproduction is authorised provided the source is acknowledged.
Printed in Luxembourg
3
CONTENTS
Paragraph
I–VII EXECUTIVE SUMMARY
1–3 INTRODUCTION
3
S TATUS OF RECOMMENDATIONS
4–5 AUDIT SCOPE AND APPROACH
6–65 OBSERVATIONS
7–18 R EFOCUSING ON THE INVESTIGATIVE FUNCTION
8–11
NON-INVESTIGATIVE ACTIVITIES HAVE NOT BEEN DIVESTED
12–15GREATER FOCUS ON INVESTIGATIVE ACTIVITIES
16–18CONTRIBUTION OF STRATEGIC SERVICES TO THE INVESTIGATIVE FUNCTION
REMAINS LIMITED
19–44 I MPROVING THE EFFICIENCY OF INVESTIGATIONS
20–23PLANNING DOES NOT INCLUDE MANPOWER AND DEADLINES
24–26
MEASURES TAKEN TO FOCUS ON PRIORITIES
27–33DURATION OF INVESTIGATIONS HAS NOT IMPROVED
34–37
INCREASED SUPPORT FROM CASE MANAGEMENT SYSTEM (CMS) AND PERSONNEL FUNCTION
38–39
REVISION OF THE LEGAL AND PROCEDURAL FRAMEWORK STILL PENDING
40–44
DIFFICULTIES IN COOPERATION WITH EUROJUST AND MEMBER STATES
45–57 R EPORTING ON THE EFFECTIVENESS OF INVESTIGATIONS
46–48TARGETS ARE SET AND MONITORED BUT DO NOT FOCUS ON RESULTS
49–57REPORTS ON PERFORMANCE DO NOT FULLY EXPLOIT THE INFORMATION AVAILABLE
58–65 C LARIFYING THE ROLE OF THE SUPERVISORY COMMITTEE
59–65UPDATING PROCEDURES NOT YET COMPLETED
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
4
66–76 CONCLUSIONS AND RECOMMENDATIONS
66–68 R EFOCUSING ON THE INVESTIGATIVE FUNCTION
69–71 I MPROVING THE EFFICIENCY OF INVESTIGATIONS
72–74
R EPORTING ON THE EFFECTIVENESS OF INVESTIGATIONS
75–76 C LARIFYING THE ROLE OF THE SUPERVISORY COMMITTEE
ANNEX I
– STATUS OF IMPLEMENTATION OF RECOMMENDATIONS (SPECIAL REPORT No 1/2005)
ANNEX II
– OLAF ORGANISATION CHART
ANNEX III – POTENTIAL INDICATORS
REPLY OF THE COMMISSION
REPLY OF THE OLAF SUPERVISORY COMMITTEE
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
5
EXECUTIVE
SUMMARY
I.
The European Anti-Fraud O ffice (OLAF)
is charged with fighting fraud and other
illegal activities detrimental to the EU
budget. The Office, which belongs to the
Commission but has investigative autono m y, e m p l o y s i n t h e o r d e r o f 5 0 0 s t a f f ,
a n d a n n u a l e x p e n d i t u re a m o u n t s t o s o m e
50 million euro. In 2005 the Cour t of
Auditors’ Special Repor t No 1/2005 concerning the management of OLAF identified weaknesses in the management
of investigations and made 17 recommendations to refocus activities on the
i nve s t i g a t i ve f u n c t i o n , i m p rove e f f i c i e n c y
a n d d e m o n s t r a t e e f fe c t i v e n e s s ( s e e p a r a gra p h s 1 to 5).
II.
OLAF now makes more use of its powers to
car r y out on-the -spot checks, examine witn e s s e s a n d q u e s t i o n s u s p e c t s. I n o rd e r t o
refocus on the investigative func tion OLAF
c r e a t e d t w o i nv e s t i g a t i o n d i r e c t o r a t e s t o
re p l a c e t h e o n e e x i s t i n g p re v i o u s l y. H o we ve r, t h e Co m m i s s i o n co n s i d e r s t h at O L A F
is most effec tive as an all-round anti-fraud
authority rather than a service concentrated on investigations and so did not
divest OLAF of its non-investigative ac tivities such as anti-fraud strategy and fundi n g p r o g r a m m e s . C o n s e q u e n t l y, t h e r a t e
of increase in staff in the investigation
d i re c to rate s ( 3 2 % ) h a s n o t k e p t p a ce w i t h
g ro w t h i n t h e re s t o f t h e O f f i c e ( 4 3 % ) . I n
2 0 0 9 i nvestigative casewor k accounted for
37 % of the time of the Office as a whole
( s e e p a ragraphs 7 to 18).
III.
OLAF has taken a number of steps to
improve the efficienc y of investigations. I t
has made fuller use of its electronic case
management system (CMS), carried out
m o re fo c u s e d t ra i n i n g, i nt ro d u ce d t a rg e t s
to focus on more serious and complex
cases, reduced the propor tion of tempor a r y s t a f f a n d i n t ro d u c e d a Ti m e M a n a g e m e n t S y s t e m ( T M S ) . H o w e v e r, t h e T M S
is not used for planning purposes and
wo r k p l a n s d o n o t i n c l u d e e s t i m ate s o f t h e
t i m e re q u i re d a n d d e a d l i n e s fo r i nve s t i g a t i o n s. Th e re i s a n e e d to i m p rove t h e m a n agement of cases in progress in order to
resolve problems faster and avoid long
periods of inactivity: the average case
d u r a t i o n re m a i n s o ve r t wo ye a r s. I n a d d i t i o n , O L A F n ow re ce i ve s 5 0 % m o re i n i t i a l
infor mation on possible frauds and ir regu lar ities than in 2004 and the average durat i o n o f t h e i n i t i a l a s s e s s m e nt o f t h i s i n fo rmation has doubled from 3,5 months to
7 months. Although there are 32 % more
investigators than in 2004, the number
of cases under investigation has not
i n c re a s e d. Th i s re f l e c t s t h e fo c u s o n m o re
ser ious cases, the increasing propor tion of
OLAF’s own investigations and the redirec t i o n o f i nve s t i g at i ve re s o u rce s to c a r r y i n g
o u t i n i t i a l a s s e s s m e nt s ( s e e p a ra gra p h s 1 9
to 37).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
6
EXECUTIVE
SUMMARY
IV.
The legal framewor k 1 has not changed since
t h e C o u r t ’s l a s t r e p o r t . T h e r e i s s t i l l n o
independent control of investigative ac ts in
p ro gre s s, n o r i s t h e re a co d e g u a ra n te e i n g
t h at i nve s t i g at i ve a c t s fo l l ow a p re d i c t a b l e
c o u r s e . A Pr a c t i c a l A g r e e m e n t fo r c o o p e r ation with Eurojust has so far had limited
impac t (see paragraphs 38 to 44).
V.
OLAF sets clear objectives for the Office
i n i t s An n u a l M a n a g e m e nt Pl a n . I nve s t i g a tions have resulted in the identification
o f s i g n i f i c a n t s u m s f o r r e c o v e r y, j u d i c i a l
and disciplinary action, and closure of
investigations where initial allegations
were shown to be unfounded. Informat i o n o n O L A F’s p e r fo r m a n ce i s ava i l a b l e i n
C M S co n ce r n i n g a c t i v i t y, p o te n t i a l re s u l t s
a n d r e a l r e s u l t s . H o w e v e r, O L A F d o e s n o t
repor t this information in a single document which would enable reliable compari s o n s t o b e m a d e o f i t s p e r fo r m a n c e o v e r
time and across sec tors (see paragraphs 45
to 5 7 ) .
VI.
The Supervisory Committee has revised
i t s r u l e s o f p ro ce d u re a n d h a s p ro d u ce d a
number of repor ts and opinions concerni n g t h e m a n a g e m e n t o f O L A F. A p r o c e dure has been introduced to consult the
S u p e r v i s o r y Co m m i t te e b e fo re fo r wa rd i n g
information to national judicial authorit i e s a l t h o u g h t h i s d o e s n o t ye t a d e q u ate l y
protec t the r ights of individuals concer ned
( s e e p a ragraphs 58 to 65).
VII.
On the basis of these observations the
C o u r t ’s m a i n r e c o m m e n d a t i o n s a r e t h a t
OLAF should (see paragraphs 66 to 76):
(a) I n c r e a s e t h e n u m b e r a n d s p e e d o f i n ve s t i g a t i o n s b y i n c re a s i n g t h e p ro p o rtion of time spent on them and revising
the legal framewor k .
(b) I m p r o v e e f f i c i e n c y b y i n c l u d i n g e s t i m ate s o f re s o u rce s re q u i re d a n d d e a dl i n e s i n p l a n s fo r i nv e s t i g a t i o n s . P l a n s
should be monitored and updated. The
Executive Board should play a role in
ensuring that the overall duration of
assessments and investigations is re duced.
(c) Pr o v i d e r e l i a b l e i n f o r m a t i o n o n e f f e c tiveness by publishing in a single document per formance statistics on ac tivit y,
potential and real results.
(d) B e t t e r d e f i n e a p r o c e d u r e fo r c o n s u l ti n g t h e S u p e r v i s o r y Co m m i t t e e b e fo re
transmitting information to national
judicial author ities.
1
Regulation (EC) No 1073/1999 of the European Parliament
and of the Council of 25 May 1999 concerning investigations
conducted by the European Anti-Fraud Office (OLAF) (OJ L 136,
31.5.1999, p. 1).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
7
INTRODUCTION
FIGURE 1
2
OJ C 202, 18.8.2005, p. 1.
3
Audit Progress Committee
meeting on 5 July 2007 Progress report by OLAF on
the implementation of the
recommendations of the Court
of Auditors’ Special Report
No 1/2005.
igure 1 illustrates the evolution of activity in OLAF since
F
2 0 0 4 i n te r m s o f e x p e n d i t u re, s t a f f i n g, i n fo r m a t i o n re ce i ve d
and cases handled. The number of cases under investigation at
any one time has remained at some 400, each lasting on avera g e t wo ye a r s, a n d i n t h e o rd e r o f 2 0 0 c a s e s a re c l o s e d e a c h
year. The amount of initial information received has increased
considerably and OLAF now receives approximately 1 000 different communications from var ious sources each year.
O L A F E X P E N D I T U R E , S TA F F I N G A N D C A S E LO A D 2004 TO 2009
1 200
60
1 000
50
800
40
600
30
400
20
200
10
0
Million euro
2.
In 2005 the Court of Auditors published Special Report
No 1/2005 concerning the management of the European AntiFraud O ffice (OLAF) 2 . The audit identified weak nesses in OLAF’s
management of investigations and made 17 recommendations
to refocus activities on the investigative function, improve
e fficienc y and demonstrate effec tiveness. OLAF produced an
action plan for the implementation of the accepted recommendations and in 2007 repor ted on progress to the Audit
Progress Committee of the Commission 3 . An outline of OLAF’s
role and tasks is set out in B ox 1.
Number of staff/information/cases
1.
0
2004
2005
Staffing
Cases closed during year
2006
2007
Information received
Expenditure (right hand axis)
2008
2009
Cases open at year-end
Source: OLAF.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
8
BOX 1
O L A F ’S R O L E A N D TA S K S
Key objectives and activities
OLAF was set-up in 1999 4 with the aim of increasing the effectiveness of the fight against illegal activities detrimental to the Union’s financial interests. OLAF is responsible for a range of activities including
carrying out administrative investigations for fighting fraud, assisting Member States in fraud prevention
and collecting and analysing information.
OLAF has investigative independence, which is reinforced by a Supervisory Committee made up of five
independent persons from outside the EU institutions.
Types of case
The Office divides its cases into the following categories:
(a) Investigations
ο ο i nternal investigations (investigations within the EU institutions and bodies);
ο ο e xternal investigations (investigations into economic operators involving EU funds).
(b)Coordination and assistance operations
ο ο c oordination of Member States in investigations concerning more than one country;
ο ο s upport for national judicial authorities in the context of criminal proceedings.
The key stages of investigations
(a) OLAF receives denunciations from within or outside the EU institutions;
(b)OLAF assesses the initial information and the Director decides whether or not to open a case;
(c) OLAF investigators gather evidence e.g. through interviews and on-the-spot checks;
(d)The investigators report to the Board the results of the investigative activities. The Director decides
what follow-up action to initiate, if any. Follow-up action may include transmission of case information to the competent national or EU authorities with a view to launching judicial or disciplinary
proceedings or recovering funds;
(e) OLAF verifies whether the responsible authorities have taken the recommended follow-up action.
The outcome of OLAF’s work can take the form of four types of follow-up: financial, administrative,
judicial and disciplinary.
4
Commission Decision 1999/352/EC, ECSC, Euratom (OJ L 136, 31.5.1999, p. 20); Regulation (EC) No 1073/1999.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
9
S TAT U S O F R E CO M M E N D AT I O N S 3.
able 1 lists the original 17 recommendations made in Special
T
Repor t No 1/2005. The Cour t notes that 13 of its recommendat i o n s we re fo l l owe d u p by O L A F, t h re e o t h e r s ( re co m m e n d at i o n s 2 , 1 4 , 1 5 ) we re n o t a cce p te d by t h e Co m m i s s i o n , w h i l e
recommendation 16 on the role of the Super visor y Committee
needs to be seen in the light of a judgment of the Cour t of
Fi rst I nstance in July 2008 5 .
5
Case T-48/05 of 8 July 2008
(OJ C 209, 15.8.2008, p. 44).
TA B L E 1
STATUS OF ECA RECOMMENDATIONS MADE IN SPECIAL REPORT NO 1/2005 ON OLAF
Recommendation
1. Specify results to be achieved by investigations and introduce performance indicators to assess success
2. Consider creating a separate unit dedicated to coordination and assistance operations to improve management
of resources
Status
Accepted
Not accepted
3. Establish smaller groupings on the Executive Board with the aim of setting clear plans and objectives for
investigations
Accepted
4. Supervise the investigation process to focus on priorities and on the search for evidence by making better use of
the investigation means available
Accepted
5. Introduce a time recording system linked to work plans with estimates of time to be spent on investigations to
align workload with resources and to avoid delays
Accepted
6. Establish a maximum duration for investigations
Partially accepted
7. Remove follow-up activities (involvement in judicial proceedings and recovery of funds) that can be performed
by authorising officers
Partially accepted
8. Codify and publish procedures to protect the rights of individuals at all stages of the investigation and to
provide controls on the legality of the investigative acts in progress
Accepted
9. Formalise arrangements for cooperation between OLAF and the Member States through legislation or the
conclusion of agreements with national investigation services
Accepted
10. Convert CMS into a system of investigation management and increase training of investigators in investigation techniques, legislation and report-writing skills
Accepted
11. Produce reliable and relevant reports on performance, based on real rather than potential results
Accepted
12. Implement a masterplan for personnel management to resolve structural problems
Accepted
13. Strategic analysis services should seek improvement in the data forwarded by Member States and create
databases which can be used to identify anomalies and launch investigations
Accepted
14.Transfer responsibility for anti-fraud strategy to other Commission services
Not accepted
15. Give responsibility for managing funding programmes (e.g. Pericles and Hercules) to other Commission
services
Not accepted
16. Clarify the role of the Supervisory Committee to ensure that there is no interference in ongoing investigations
17. Refocus activities on the investigative function, accompanied by changes in governance and regulations
Accepted
Partially accepted
Note: The recommendations made in Special Report No 1/2005 were not numbered. They are presented here, in summary form, in the
order in which they appeared in the report.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
10
AUDIT SCOPE AND APPROACH
4.
T h e fo l l o w - u p a u d i t s e t o u t t o e s t a b l i s h t h e a c t i o n t a k e n t o
implement the recommendations of Special Repor t No 1/2005.
The audit aimed to answer the following four questions which
group together the different recommendations (see A nnex I):
6
The audit selected cases
which were open on 1 July 2008
in order to review all stages
of the procedure up to April
2010 (initial assessment, active
( a) Have the ac tivities of OLAF been refocused on its investiga tive func tion? (recommendations 2, 7, 13, 14, 15, 17)
( b)H a s O L A F i m p r o v e d t h e e f f i c i e n c y o f i t s i n v e s t i g a t i o n s ?
(recommendations 3, 4, 5, 6, 8, 9, 10, 12)
( c )C a n O L A F d e m o n s t r a t e t h e e f fe c t i ve n e s s o f i t s i nve s t i g a tions? (recommendations 1 and 11)
( d) H as the role of the Super visor y Committee been clar ified?
(recommendation 16).
5.
T he audit compr ised:
( a) a n a n a l y s i s o f p o l i c y, p l a n n i n g , p r o c e d u r a l , s t a f f i n g a n d
financial documentation and statistics obtained from OLAF
including its ac tion plan to address the recommendations
of Special R epor t No 1/2005;
( b)i n t e r v i e w s w i t h O L A F D i r e c t o r s, H e a d s o f U n i t a n d i nve s t i g a t o r s ; m e e t i n g s w i t h t h e O L A F S u p e r v i s o r y Co m m i t t e e
and its Secretariat to discuss their repor ts and opinions;
i n t e r v i e w s w i t h o t h e r r e l e v a n t b o d i e s ( I nv e s t i g a t i o n a n d
Disciplinar y O ffice of the Commission (IDOC ), Eurojust);
( c )a n a s s e s s m e n t o f a ra n d o m s e l e c t i o n o f 3 0 i nve s t i g a t i o n s
out of the 332 internal and ex ternal investigations open on
1 J u l y 2 0 0 8 6 . Th e a s s e s s m e n t w a s b a s e d o n a n a n a l y s i s o f
the case -related documentation held on the computer ised
C a s e M a n a g e m e n t S y s t e m (C M S ) a n d i n t e r v i e w s w i t h t h e
investigators concer ned.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
investigation, final decision and
follow-up where applicable).
11
OBSERVATIONS
6.
F i ndings emerging from the examination of the sample of 30
c ases are summar ised in Figure 2. Each investigation was ass e s s e d a s s t ro n g, s a t i s f a c t o r y o r we a k a g a i n s t t h e fo l l o w i n g
c r i t e r i a : t h e f o c u s o n i n v e s t i g a t i v e a c t i v i t y, c o n t r i b u t i o n o f
other OLAF ser vices to the case, timeliness of decisions to
open the case, clarit y of objec tives and planning, propor tion ate duration, and results achieved. The findings are examined
f ur ther in the relevant sec tions of the repor t.
R E F O C U S I N G O N T H E I N V E S T I G AT I V E
FUNCTION
7.
FIGURE 2
T he Cour t followed up the recommendations of Special Repor t
N o 1 / 2 0 0 5 t h a t O L A F s h o u l d d i ve s t o r s e p a r a t e c e r t a i n n o n investigative ac tivities and improve the contribution of strate gic ser vices to the investigative func tion. OLAF reorganised its
d i rec torates in 2006 and the new organisation struc ture (see
Annex II) was intended to put more focus on OLAF’s investigat i ve func tion.
A S S E S S M E N T O F C R I T E R I A I N 30 C A S E S E X A M I N E D
Focus on investigative activities
Contribution of other services
Timely decision to open
Clear objectives and planning
Proportionate duration
Results achieved
0
5
10
15
20
25
30
Cases in sample
Strong
Satisfactory
weak
Source: Examination of 30 cases.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
12
N O N - I N V E S T I G AT I V E AC T I V I T I E S H AV E N OT B E E N
DIVESTED
8.
9.
TA B L E 2
T h e Co u r t m a d e fo u r re co m m e n d at i o n s to d i ve s t o r s e p a rate
ac tivities. The recommendation to transfer follow-up ac tivities
( re co m m e n d a t i o n 7 ) w a s p a r t i a l l y a cce p te d. As t h e Co m m i s s i on continued to insist on maintaining OLAF as an all-round
anti-fraud author it y rather than a ser vice concentrated on inve s t i g at i o n s, t h e o t h e r t h re e re co m m e n d at i o n s we re n o t a c cepted: the transfer of responsibility for anti-fraud strategy to
other Commission ser vices (recommendation 14); the transfer
o f re s p o n s i b i l i t y fo r m a n a gi n g f u n d i n g p ro gra m m e s to o t h e r
Commission ser vices (recommendation 15); and the separation
of coordination and assistance operations from investigations
( recommendation 2).
7
Commission Decision –
Communication C(2007) 5709
of 27.11.2007 clarifying the
respective responsibilities of
OLAF and the Commission’s
authorising officers for
financial follow-up of irregular
expenditure.
oncerning recommendation 7 to transfer follow-up activiC
t i e s, a c t i o n h a s b e e n t a k e n to gi ve p r i m a r y re s p o n s i b i l i t y to
Co m m i s s i o n s e r v i c e s fo r fo l l o w - u p a c t i v i t i e s 7 . O L A F re m a i n s
involved in judicial and disciplinar y follow-up (Unit C1, see organisation char t in A nnex II) and financial follow-up (Units C2
a n d C 3 ) . O L A F ’s r o l e i s t o o p t i m i s e c o n d i t i o n s fo r fo l l o w - u p
a n d to ve r i f y w h e t h e r Co m m i s s i o n s e r v i c e s a n d n a t i o n a l a u t hor ities have taken the necessar y measures.
S TA F F D I S T R I B U T I O N 2004 – 09 1
Date
Investigations and operations
(directorates A and B)
Officials and
temporary
Contract
staff
Other (directorates C and D, DirectorGeneral and Supervisory Committee)
Officials and
temporary
Total
Contract
staff
Total OLAF
Total
% Investigations and
operations
end 2004
100
25
125
165
65
230
355
35,2 %
end 2005
107
22
129
174
67
241
370
34,9 %
end 2006
110
25
135
180
77
257
392
34,4 %
end 2007
126
21
147
205
100
305
452
32,5 %
end 2008
140
20
160
212
93
305
465
34,4 %
end 2009
143
22
165
217
111
328
493
33,5 %
1 The table shows the actual number of staff employed.
Source: OLAF.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
13
10.
Th e p ro p o r t i o n o f s t a f f wo r k i n g i n i nve s t i g at i o n s a n d o p e ra t i o n s d i re c t o r a t e s i s o n ave r a g e 3 4   % ( 2 0 0 4 – 0 9 ) a s s h ow n i n
Table 2.
8
time management system.
9
11.
FIGURE 3
In 2009 over 98 % of all hours
available were recorded in the
The workload of staff in the
investigation directorates also
S o m e o f t h e s t a f f i n D i r e c t o r a t e s C ( O p e r a t i o n a l a n d Po l i c y
Suppor t) and D (General Affairs) are also involved in the investigative process. OLAF introduced a Time Management System
( T M S ) i n 2 0 0 7 w h i c h re c o rd s t i m e s p e n t by a l l O L A F s t a f f o n
c asewor k and on other ac tivities 8 . The TMS shows that not all
o f t h e t i m e o f t h e s t a f f i n i nve s t i g at i o n d i re c to rate s i s s p e nt
on casework . In 2009 they allocated 63 % of their time to case work, 27 % to management and administration and 10 % to
polic y and resources. Conversely, staff work ing in other directorates spent 25 % of their time direc tly suppor ting casework .
The resulting total amount of time spent on casework by staff
in all direc torates amounts to 37 % as shown in Figure 3 9 . Only
j u st over half of this was allocated to specific cases 1 0 .
covers assessments and coordination and assistance cases.
10
An investigator or Head of
Unit working on a large number
of cases would allocate time to
casework without indicating
specific cases.
U S E O F S TA F F T I M E R E CO R D E D I N T M S I N 2009
Resources (Personnel ,
training, finance, IT)
27 %
Policy (Strategy, legal
affairs, communication)
15 %
Casework
37 %
Management and
administration
21 %
Source: OLAF Time Management System.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
14
G R E AT E R F O C U S O N I N V E S T I G AT I V E AC T I V I T I E S
12.
The Cour t recommended that OLAF should refocus on the in ve s t i g a t i ve f u n c t i o n a cco m p a n i e d by c h a n g e s i n t h e re g u l a t i o n s w h i l e l e av i n g o t h e r s e r v i ce s w i t h t h e re s p o n s i b i l i t y fo r
p reventive or legislative ac ts (recommendation 17).
13.
I n S e p te m b e r 2 0 0 6 t wo i nve s t i g a t i o n s a n d o p e r a t i o n s d i re c torates (Direc torates A and B) were created to replace the one
existing previously (Direc torate B). The new organisation (see
Annex II) was intended to put more focus on OLAF’s investigat i ve func tion. The Cour t ’s recommendation to accompany the
refocusing on the investigative func tion with modifications to
t h e g ove r n a n ce o f t h e O f f i ce t h ro u g h c h a n g e s i n t h e re g u l a t i ons has not been implemented (see paragraph 38).
14.
The examination of a sample of 30 cases indicated an increased
focus on investigative ac tivities such as inter views or on-the spot checks. I t also showed the contribution of OLAF ser vices,
other than Directorates A and B, which are integrated in the investigative process and provide suppor t when necessar y such
a s t h e p rov i s i o n o f j u d i c i a l a d v i ce a n d fo re n s i c d at a a n a l ys i s
Fi gure 2).
15.
Another indicator of refocusing is the increase in the proport i o n o f O L A F ’s o w n i nv e s t i g a t i o n s c o m p a r e d w i t h c o o r d i n a t i on and assistance cases. The propor tion of OLAF’s casewor k
represented by investigations has increased from 50 % in 2004
to 67 % in 2009 (Figure 4).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
15
A N A LYS I S O F C A S E S O P E N E D
250
500
450
400
350
300
250
200
150
100
50
0
Cases opened during year
200
150
100
50
0
2004
2005
Coordination and assistance
2006
Investigations
2007
2008
Cases open at end of year
FIGURE 4
2009
All cases open at year end (right hand scale)
Source: OLAF.
FIGURE 5
S O U R C E O F I N I T I A L I N F O R M AT I O N R E C E I V E D 2004 – 09
1 200
1 000
800
600
400
200
0
2004
2005
2006
Other (freephone, media, trade, whistleblowers)
Other instititutions
Member States
2007
2008
2009
Strategic intelligence
Commission
Informants
Source: OLAF.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
16
CO N T R I B U T I O N O F S T R AT E G I C S E R V I C E S TO T H E
I N V E S T I G AT I V E F U N C T I O N R E M A I N S L I M I T E D
16.
The Cour t recommended that strategic analysis ser vices should
a i m to identify anomalies which can be used to launch inves t i gations (recommendation 13).
17.
O LAF’s strate gi c i ntel li ge nce (U nit s C2 a nd C3 ) ha s im proved
systems to manage the reliabilit y of data obtained from Memb e r St ate s, co n ce r n i n g, i n p a r t i c u l a r, i r re g u l a r i t i e s i n t h e a gr icultural and struc tural funds areas. I t now delivers produc ts
w h i c h a re u s e d by t h e i nve s t i g at i o n d i re c to rate s a n d a l s o by
the relevant ser vices in the Commission and in Member States.
18.
S t r ate gi c i nte l l i g e n ce p rov i d e s g e n e ra l g u i d a n ce re l e va nt to
p o l i c y d e ve l o p m e n t a n d o p e r a t i o n a l s t r a t e g y b y i d e n t i f y i n g
r i sk areas and patter ns of fraud. I t may also lead to the opening of specific cases 11 , either direc tly or indirec tly. O f the 332
i nvestigations open on 1 Jul y 2008, six (i.e. 2 %) were the di rec t result of strategic intelligence. Figure 5 shows the source
of all initial infor mation received from 2004 to 2009, of which
0 , 7 % came from strategic intelligence.
IMPROVING THE EFFICIENCY OF
I N V E S T I G AT I O N S
19.
The Cour t followed-up the recommendations of Special Repor t
No 1/2005 which aimed to improve the planning and super vi s i o n o f i nve s t i g at i o n s a n d to e n s u re t h e y we re i m p l e m e nte d
i n a t i m e l y m a n n e r i n co m p l i a n ce w i t h a c l e a r l e g a l a n d p rocedural framewor k .
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
11
OLAF Manual of Operational
Procedures, 1 December 2009
section 3.1.9.
17
P L A N N I N G D O E S N OT I N C LU D E M A N P O W E R A N D
DEADLINES
20.
C o n c e r n i n g p l a n n i n g, t h e C o u r t r e c o m m e n d e d t h a t s m a l l e r
groupings should be established on the Executive Board, con sisting of directors and heads of unit, in order to set clear
plans and objec tives for individual investigations (recommend a t i o n 3 ) a n d t h a t a t i m e re c o rd i n g s y s t e m s h o u l d b e i n t ro duced linked to work plans with estimates of time to be spent
o n investigations (recommendation 5).
12
OLAF Manual 1 December
2009 section 3.2.1. However,
in two cases from the Court’s
sample, investigative activities
started following a board
recommendation but before
a formal decision to open a
case had been taken by the
Director. In one of these cases
21.
all investigative steps had been
oncerning the recommendation for smaller board groupC
ings, the B oard now meets on alter nate weeks as B oard A and
B oard B, composed according to the respec tive competencies
o f t h e t w o n e w D i r e c t o r a t e s A a n d B. T h i s s p l i t s h o u l d h a v e
allowed a more thorough analysis of case proposals. However,
the Cour t ’s examination of a sample of investigations showed
t hat for one third of cases plans and objec tives were still not
c l ear (Figure 2).
22.
Concerning recommendation 5, a time management system
( TMS) was introduced from O c tober 2007. All OLAF staff, with
t h e e xc e p t i o n o f S u p e r v i s o r y C o m m i t t e e s t a f f, a r e r e q u i r e d
to record the use of their time by tasks. I n 2009 over 98 % of
all hours available were recorded in the time management
s y s t e m . I t i s c u r re n t l y a s y s t e m fo r re c o rd i n g t i m e. T h e d a t a
i n the system is not used to manage casewor k .
23.
The initial assessment of information received (see paragraph 32) includes a wor k plan which indicates the first steps
of the investigation and is reviewed in the nine month repor t
t o t h e S u p e r v i s o r y Co m m i t t e e. A l t h o u g h t h e wo r k p l a n i n d i c ates the number of investigators and specific sk ills required
there is no estimation of the time required and deadlines.
T MS is not used for planning pur poses. O utside TMS, Unit B2
(which deals with customs cases) does produce time char ts in
o rder to plan the wor k of investigators. Plans may need to be
reassessed once investigative ac tivities are under way because
r e c o m m e n d a t i o n s t o o p e n a c a s e a re b a s e d o n t h e i n fo r m a t i o n ava i l a b l e at t h e t i m e a n d n o i nve s t i g at i ve a c t i v i t i e s c a n
b e car r ied out dur ing the initial assessment phase 1 2 .
completed before the decision
to open an investigation was
taken.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
18
M E A S U R E S TA K E N TO F O C U S O N P R I O R I T I E S
24.
Th e Co u r t re co m m e n d e d t h at i nve s t i g at i o n s s h o u l d fo c u s o n
priorities in order to make the most of the means available
( recommendation 4).
13
An abbreviated form of the
Latin maxim de minimis non
curat lex, ‘the law cares not for
small things.’ The Convention on
the protection of the European
25.
Communities’ financial interests
A d e m i n i m i s 13 a p p r o a c h h a s b e e n i n t r o d u c e d f o r e x t e r n a l
i nve s t i g at i o n s b a s e d o n i n d i c at i ve f i n a n c i a l t h re s h o l d s 1 4 a n d
other cr iter ia such as reputational r isk , indications of systemat i c f ra u d a n d w h e t h e r t h e re a re o t h e r co m p e te nt i nve s t i g a t i ve bodies.
(OJ C 316, 27.11.1995, p. 49)
stipulates that, for the purpose
of criminal prosecution, fraud
involving an amount exceeding
50 000 euro shall be considered
in any event as serious fraud.
26.
14
1 million euro in the
S i n c e 2 0 0 4 O L A F h a s g r o w n b y 3 9 % f r o m 3 5 5 t o 4 9 3 s t a f f,
whilst the number of staff in the investigations and operations
d i rec torates has increased by 32 % from 125 to 165 staff (see
Ta b l e 2 ) . T h e i n c r e a s e i n t h e n u m b e r o f s t a f f i n t h e i nv e s t i g a t i o n s a n d o p e r a t i o n s d i re c t o r a t e s h a s n o t b e e n a c c o m p anied by an equivalent increase in the number of cases (see
­F i g u r e s 1 a n d 4 ) . I n 2 0 0 9 O L A F c a r r i e d o u t f e w e r c a s e s p e r
person in investigations and operations than in 2004 (2,8 open
c ases instead of 3,7). This development reflec ts:
customs, cigarettes and trade
ο ο t he focus on more serious complex cases resulting from the
de minimis polic y ;
15
sectors; 100 000 euro in the
agriculture and structural funds
sectors; 50 000 euro in direct
expenditure and external aid
cases. (See page 5 of the Annual
Activity Report of OLAF for 2009
— http://ec.europa.eu/atwork/
synthesis/aar/doc/olaf_aar.pdf)
Prima facie non-cases relate
to information received which
clearly does not fall within the
ο ο t he increasing propor tion of OLAF's own investigations (see
Figure 4);
competence of OLAF or clearly
does not justify the use of OLAF
resources.
ο ο t h e d e p l oy m e n t o f m o re i nve s t i g a t i ve re s o u rce s to a s s e s sing the increasing amount of information received (see
­F i g u r e 5 ) . T h e q u a n t i t y o f i n i t i a l i n f o r m a t i o n a n a l y s e d
which did not lead to the opening of a case doubled from
3 6 4 s u c h ‘n o n - c a s e s ’ i n 2 0 0 4 ( i n c l u d i n g 1 0 8 p r i m a f a c i e
non- cases 15 ) to 755 in 2009 (including 267 prima facie noncases).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
19
D U R AT I O N O F I N V E S T I G AT I O N S H A S N OT
IMPROVED
27.
The Cour t recommended that a maximum duration for inves tigations be established (recommendation 6). The Commiss i o n a cce p te d t h e i d e a o f i m p o s i n g m a x i m u m t i m e l i m i t s fo r
conduc ting investigations and made a legislative proposal 16 to
introduce a standard duration of 12 months which was extenda b l e by u p to s i x m o nt h s at a t i m e o n t h e b a s i s o f a d e c i s i o n
taken by the Direc tor of the O ffice af ter consulting the Supervisor y Committee. However, no changes to the legal framework
h ave yet been adopted.
16
See COM(2004) 103 final,
proposed new Article 6(7) p. 10.
17
OLAF Manual of Operational
Procedures 1 December 2009
Section 1.4.7 states: ‘If the case
is still ongoing nine months
after being opened, the
investigator prepares a report
for the Supervisory Committee
summarising the allegations,
28.
29.
the status of the case and the
OLAF’s Annual M anagement Plan for 2010 has a minimum targ et of closing 75 % of cases within 24 months, 10 % of which
in less than nine months. Regulation (EC ) No 1073/1999 states
that where an investigation has been in progress for more than
n i n e m o nt h s, t h e D i re c to r s h a l l i n fo r m t h e S u p e r v i s o r y Co m m i t t e e o f t h e re a s o n s fo r w h i c h i t h a s n o t ye t b e e n p o s s i b l e
to complete it. The duration of investigations is an impor tant
i s s u e n o t o n l y b e c a u s e o f t h e r i s k o f t i m e - b a r r i n g, b u t a l s o
fo r the efficienc y of OLAF and for persons concer ned by such
i nvestigations.
reasons for the delay and the
estimated time for completion.
Another report following a
similar internal procedure
must be prepared for the
management 18 months after
the opening of the investigation.’
Duration is monitored through day-to-day supervision by
H e a d s o f U n i t s, m o nt h l y o p e rat i o n a l re p o r t s a n d, i n D i re c to rate B, c a s e re p o r t s d raw n u p e ve r y t h re e m o nt h s. Th e B o a rd
i s o n l y i nvo l ve d a t t h e o p e n i n g a n d c l o s i n g s t a g e s o f c a s e s.
For cases which last longer than nine months the investigator
p re p a re s a re p o r t fo r t h e S u p e r v i s o r y Co m m i t t e e s u m m a r i s i n g t h e s t a t u s o f t h e c a s e, t h e re a s o n s fo r t h e d e l ay a n d t h e
e stimated time for completion. The new manual also requires
18 month repor ts to be prepared for inter nal pur poses only 17 .
N o fur ther repor ting of this nature is required although most
i nvestigations last longer than 18 months. There is a need to
i mprove the management of cases in progress in order to re s olve problems faster and avoid long per iods of inac tivit y.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
20
30.
able 3 shows the actual number of cases closed in nine
T
m onths from 2004 to 2009 is generally just over 10 %, in line
w ith the target in the Annual M anagement Plan.
3 1 . A l t h o u g h
between 2004 and 2009 the number of cases per
p e r s o n i n i nv e s t i g a t i o n s a n d o p e r a t i o n s h a s d e c r e a s e d ( s e e
p aragraph 26), this has not had an impac t on the duration of
c a s e s. T h e a ve r a g e d u r a t i o n o f a l l c a s e s ( e x t e r n a l a n d i n t e r nal investigations, criminal assistance and coordination cases)
from 2004 to 2009 has varied little and remains at over two
ye a r s ( 2 5 m o nt h s ) a s s h ow n i n Fi g u r e 6 . M a ny i nve s t i g at i o n s
take considerably longer to complete than the average of t wo
years. At the end of 2009, 125 of 457 cases in progress (27 %)
had been open for more than two years. O f these, 33 had been
open for more than three years and a fur ther 21 for more than
fo ur years. The examination of the 30 cases showed that long
d uration is sometimes due to outside fac tors, but more of ten
d u e to i n te r n a l f a c to r s s u c h a s l a c k o f re s o u rce s a s s i gn e d to
c ases or shif ts in pr ior ities.
TA B L E 3
C A S E S C LO S E D I N N I N E M O N T H S
Year of closure
Total cases closed
Total closed in 9 months
%
2004
339
60
18 %
2005
233
27
12 %
2006
217
24
11 %
2007
232
21
9 %
2008
187
21
11 %
2009
188
20
11 %
Source: OLAF.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
21
32.
Th e i s s u e o f l o n g d u rat i o n a p p l i e s n o t o n l y to i nve s t i g at i o n s
but also to initial assessments. When OLAF first receives or
g enerates infor mation concer ning a possible fraud, it car r ies
out an evaluation of this initial information to decide whether
or not to open a case. The volume of this incoming information
h a s i n c re a s e d co n s i d e ra b l y f ro m 6 6 2 i te m s i n 2 0 0 4 to 9 6 5 i n
2009 (see Figure 5). The duration of assessments is affec ted by
the need to gather information from outside organisations, the
work load of investigators and also the polic y to focus on more
s er ious and complex cases (see paragraph 25). Consequently,
m any evaluations take considerably longer to complete than
t he t wo months envisaged in the OLAF manual 1 8 . The average
d uration of evaluations has doubled from 3,5 months in 2004
to 7,1 months in 2009. At the end of 2009, 72 cases had been
i n assessment for more than 12 months, representing 16 % of
t he total of 459.
18
Section 3.2.2 of the OLAF
manual states that the initial
assessment of a case should be
completed within two months of
receiving the initial information.
If this is not possible, the
investigator must request an
extension to the deadline from
the responsible Head of Unit.
The initial assessment must then
be completed within a period
authorised by the responsible
Head of Unit, which shall not
be more than six months after
receipt of the initial information.
If the information required for
completing the assessment
is still not available after six
months a prolongation has to be
3 3 . The results of the Cour t ’s examination of 30 cases (summarised
authorised by the line Director.
i n Fi g u r e 2 ) s h o we d t h a t t h e d e c i s i o n t o o p e n a n i nve s t i g a tion was not made in a timely manner in 11 cases. The average
duration of the evaluations for the 30 cases examined was six
m onths.
AV E R AG E D U R AT I O N O F C A S E S 2004 TO 2009 1
30
25
20
Months
FIGURE 6
15
26
25
26
2004
2005
2006
10
23
25
25
2007
2008
2009
5
0
1 Based on the ratio of cases open at the end of the year to cases opened during the year.
Source: OLAF.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
22
I N C R E A S E D S U P P O R T F R O M C A S E M A N AG E M E N T
S YS T E M ( C M S ) A N D P E R S O N N E L F U N C T I O N
34.
Th e Co u r t m a d e re co m m e n d at i o n s to d e ve l o p t h e c a s e m a n agement system (CMS) as a management tool, to increase
training of investigators in investigation techniques, legisl a t i o n a n d re p o r t - w r i t i n g s k i l l s ( re c o m m e n d a t i o n 1 0 ) a n d t o
i m p l e m e nt a m a s te r p l a n fo r p e r s o n n e l m a n a g e m e nt i n o rd e r
to resolve struc tural problems (recommendation 12).
19
Regulation (EC) No 45/2001
of the European Parliament and
of the Council of 18 December
2000 on the protection of
individuals with regard to the
processing of personal data
by the Community institutions
and bodies and on the free
35.
movement of such data (OJ L 8,
C M S i s n ow b e t t e r u s e d a n d a l l k e y d o c u m e n t s a re re c o rd e d
i n t h e s y s t e m . H o w e v e r, d a t a p r o t e c t i o n i n f o r m a t i o n i s n o t
systematically completed. I n accordance with R egulation (EC )
No 45/2001 19 , a decision should be taken either to inform natu ra l persons that their personal data are stored and treated by
O LAF (recorded as ‘provided ’ on CMS) or else to defer infor m i ng them (recorded as ‘defer red ’ on CMS), because, for examp l e, to d o s o co u l d j e o p a rd i s e t h e i nve s t i g at i o n . H owe ve r, i n
f i ve of the 30 investigations examined, a decision whether or
n o t t o i n fo r m t h e s u s p e c t h a d n o t b e e n t a k e n . Fu r t h e r m o re,
t he Cour t recalls that the data protec tion regulation requires
personal data to be accurate and, where necessar y, kept up to
d ate 2 0 . I n t h i s re s p e c t , t h e Co u r t n o te s t h at w h e n a n i nve s t i g ation is closed without follow-up and the initial allegations
c o u l d n o t b e s u b s t a n t i a te d, t h e C M S d o e s n o t re f l e c t s u c h a
d e ve l o p m e nt i n t h e c ate g o r i s at i o n o f t h e p e r s o n co n ce r n e d.
The advice of the European Data Protec tion Super visor (EDPS)
i s needed on the matter.
36.
Concer ning training, Figure 7 illustrates the number of OLAF
s t a f f a t t e n d i n g t r a i n i n g e ve n t s o n i nve s t i g a t i o n t e c h n i q u e s,
l e gislation and repor t-wr iting sk ills since 2004 and shows an
increase in the number of par ticipants at training events in
2 009. The Januar y 2009 repor t on training by OLAF’s I nter nal
Audit Capability reinforced the messages of Special Repor t
N o 1 / 2 0 0 5 a n d s t re s s e d t h e n e e d t o i m p ro ve t h e a n a l y s i s o f
t raining needs.
37.
Structural problems in staffing have been addressed by obtaining additional permanent posts and thus reducing the number
a nd propor tion of temporar y staff (see Table 4).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
12.1.2001, p. 1).
20
Article 4(1) of Regulation (EC)
No 45/2001.
23
T R A I N I N G E V E N T S AT T E N D E D BY O L A F S TA F F
900
10
9
8
7
6
5
4
3
2
1
0
Number of event participants
800
700
600
500
400
300
200
100
0
2004
2005
2006
Report writing
2007
Legislation
2008
Training days
FIGURE 7
2009
Investigation techniques
Average training days by OLAF staff (right hand axis)
Source: OLAF.
TA B L E 4
REDUC TION IN PROPORTION OF TEMPORARY POSTS1
Year
Permanent posts
Temporary posts
Total posts
% temporary posts
2004
183
146
329
44 %
2005
201
146
347
42 %
2006
238
119
357
33 %
2007
252
116
368
32 %
2008
261
116
377
31 %
2009
270
114
384
30 %
2010
282
102
384
27 %
1
In addition to the establishment of 384 posts there were also 131 contract staff in March 2010, including 65
working in Information Services in Directorate D.
Source: OLAF.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
24
REVISION OF THE LEGAL AND PROCEDURAL
FRAMEWORK STILL PENDING
38.
Regarding the legal and procedural framework, the Cour t made
a re co m m e n d a t i o n to co d i f y a n d p u b l i s h p ro ce d u re s t o p ro tec t the r ights of individuals at all stages of the investigation
and to provide controls on the legalit y of investigative ac ts in
p rogress (recommendation 8).
21
See the foreword to the
Manual which is available on
OLAF’s website.
22
The Commission proposal
(COM(2006) 244 final of
24.5.2006) for amending
39.
Regulation (EC) No 1073/1999
In December 2009, the Director of OLAF adopted a new Manual
o f Operational Procedures which was published in M ay 2010.
T h e l e g a l f r a m e w o r k , h o w e v e r, h a s n o t c h a n g e d s i n c e t h e
Cour t ’s last repor t, as the instructions contained in the Manual
a re n o t i n te n d e d to h ave a ny l e g a l fo rce 2 1 a n d a s R e g u l a t i o n
( E C ) N o 1 0 7 3 / 1 9 9 9 c o n c e r n i n g i nv e s t i g a t i o n s c o n d u c t e d b y
O L A F h a s n o t b e e n a m e n d e d 2 2 . Th e re i s s t i l l n o i n d e p e n d e n t
c o n t ro l o f t h e l e g a l i t y o f i nve s t i g a t i ve a c t s i n p ro gre s s 2 3 n o r
i s t h e re a co d e g u a ra nte e i n g t h at i nve s t i g at i ve a c t s fo l l ow a
p r e d i c t a b l e c o u r s e, t h a t t h e r e i s c e r t a i n t y a b o u t t h e t i m i n g
o f h e a r i n g s a n d t h a t , a t e a c h k e y s t a g e o f t h e e n q u i r y, t h e
r i ghts to a fair hear ing of the person under investigation are
p rotec ted along with the r ight of access to the file 2 4 .
D I F F I C U LT I E S I N CO O P E R AT I O N W I T H E U R O J U S T
A N D M E M B E R S TAT E S
40.
The Cour t made a recommendation to clarify arrangements
fo r cooperation with M ember States’ author ities by adopting
a specific regulation or through agreements with national in vestigation ser vices (recommendation 9).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
has not yet been adopted. On
this proposal, the Court issued
Opinion No 7/2006 (OJ C 8,
12.1.2007, p. 1).
23
See paragraph 83 of SR
No 1/2005.
24
Opinion No 5/2010 of the
OLAF Supervisory Committee
on the respect for fundamental
rights and procedural
guarantees in investigations.
25
41.
I n 2006, the Commission made a revised proposal for a regulat i o n o n m u t u a l a d m i n i s t rat i ve a s s i s t a n ce 2 5 w h i c h h a s n o t ye t
b e e n a d o p t e d b y Pa r l i a m e n t a n d C o u n c i l . O L A F h a s s i g n e d
a d m i n i s t rat i ve co o p e rat i o n a r ra n g e m e nt s w i t h a u t h o r i t i e s i n
10 Member States and negotiations are currently under way
w i t h fo u r o t h e r s 2 6 . H owe ve r, s e ve ra l M e m b e r St ate s h ave n o t
communicated to OLAF which national authorit y or investiga tion ser vice is in charge of cooperation with OLAF in the field
of direct expenditure or have not set up the necessar y national
and judiciar y authorities with competences for the field of
d i re c t e x p e n d i t u re. T h e re fo re, O L A F c o n t i n u e s t o e n c o u n t e r
difficulties and lack of support when carrying out on-thespot checks and inspec tions in cer tain Member States, notably
where national inspectors do not have the control compe te nces refer red to in R egulation (Euratom, EC ) No 2185/96 2 7 .
25
COM(2006) 473 final of
14.9.2006.
26
Arrangements are in place
with authorities in the following
Member States: Belgium,
Bulgaria, Czech Republic,
Estonia, Spain, Italy, Lithuania,
Malta, Romania, Slovak Republic.
Negotiations are ongoing
with authorities in Denmark,
Latvia, Germany and the United
Kingdom.
27
Council Regulation (Euratom,
EC) No 2185/96 of 11 November
1996 concerning on-the-spot
42.
checks and inspections carried
The audit confirmed the obser vations of the Cour t in its Opinion No 8/2005 that the existing legal framework for combating
f raud and ir regular ities is co mplicated and difficult to imple ment and that weak nesses persist in cooperation bet ween the
C o m m i s s i o n a n d M e m b e r S t a t e s 28. T h e a u d i t a l s o c o n f i r m e d
t h a t g i v e n t h e l i m i t a t i o n s o f O L A F ’s p o w e r s t o i n v e s t i g a t e ,
the response of Member States to the O ffice’s requests remain
weak 2 9 .
out by the Commission in
order to protect the European
Communities’ financial
interests against fraud and
other irregularities (OJ L 292,
15.11.1996, p. 2).
28
See paragraphs 34–36 of
Opinion No 8/2005 (OJ C 313,
9.12.2005, p. 1)
4 3 . D i f f i c u l t i e s m ay a l s o a r i s e w h e n a l l e g at i o n s u n d e r i nve s t i g a -
t i o n by O L A F i nvo l ve e co n o m i c o p e rato r s f ro m s e ve ra l M e m b er States. I n such cases, cooperation with Eurojust becomes
impor tant, as Eurojust is responsible for coordinating national
c r iminal investigations and prosecution procedures. To make
cooperation as efficient as possible, a Practical Agreement
o n a r ra n g e m e nt s o f co o p e rat i o n b e t we e n Eu ro j u s t a n d O L A F
was signed on 24 S eptember 2008 3 0 . The Prac tical Agreement
requires OLAF to inform Eurojust as soon as possible of the existence of any case where it appears that it directly involves judicial cooperation between the competent national authorities
o f t wo or more M ember States, or where the case concer ns a
M ember State and the Communit y. On the basis of the Cour t ’s
sample, some 20 % of investigations fall into these categories.
Although quar terly meetings take place between OLAF and
Eurojust as required by the agreement, prac tical cooperation
i n the for m of transmission of infor mation on cases has been
limited. In 2008 information on five cases was transmitted
f rom OLAF to Eurojust and in 2009 on just one case.
29
See paragraph 15 of SR
No 1/2005.
30
OJ C 314, 9.12.2008, p. 3.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
26
44.
Ar ticle 85 of the TFEU provides for an ex tension of the role of
Eurojust to initiating investigations. I n this regard, the Cour t
notes the recommendations adopted by the European Council
in D ecember 2009 on the possibilit y of fur ther ing the powers
of Eurojust national members, reinforcing of the powers of
t h e E u r o j u s t C o l l e g e o r t h e s e t t i n g - u p o f a E u r o p e a n Pu b l i c
Pro s e c u t o r 3 1 . M o re e f fe c t i ve c o o p e r a t i o n b e t we e n O L A F a n d
Eurojust is necessar y in view of developments in this direction.
31
See Stockholm Programme
adopted by the European Council
in December 2009 Council
document 17024/09, p. 24.
32
The monthly updates of
the annual management plan
show the percentage of cases
opened in certain sectors and
geographical areas, follow-up
REPORTING ON THE EFFECTIVENESS OF
I N V E S T I G AT I O N S
cases with an impact over
certain amounts, percentage
of cases closed with follow-up,
clearance rate (cases opened/
45.
cases closed), percentage
The audit assessed whether the ac tion taken by OLAF had re s ulted in clear objec tives for investigations and relevant and
re liable repor ts on per for mance.
of cases closed in a certain
time and number of cases per
investigator.
33
TA R G E T S A R E S E T A N D M O N I TO R E D B U T D O N OT
F O C U S O N R E S U LT S
Monthly management reports
show results for the current year
to date and four previous years
in terms of prison sentences
and amounts recovered and
46.
also show the duration of
The Cour t made a recommendation to specify results to be
a chieved by investigations and to introduce per for mance ind i cators (recommendation 1).
47.
For the O ffice as a whole, cer tain sec tors and geographical areas, OLAF now sets objec tives in the Annual Management Plan
with clearly quantified targets. These targets are monitored in
monthly updates of the Annual Management Plan 32 and fur ther
i nfor mation is provided in monthly management repor ts 3 3 .
48.
Co n c e r n i n g i n d i v i d u a l i nve s t i g a t i o n s, t h e i n i t i a l a s s e s s m e n t
d i d n o t s y s t e m a t i c a l l y i d e n t i f y c l e a r f i n a n c i a l o b j e c t i ve s fo r
investigations. Although the amounts affec ted are not always
the key concern, the initial assessment of information received
s hould identify the possible financial impac t and recover y.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
assessments, investigations and
follow-up.
27
R E P O R T S O N P E R F O R M A N C E D O N OT F U L LY
E X P LO I T T H E I N F O R M AT I O N AVA I L A B L E
49.
The Cour t made a recommendation that repor ts on OLAF’s performance should be based on relevant and reliable data. They
s h o u l d e n a b l e co m p a r i s o n s ove r t i m e a n d i n c l u d e i n d i c ato r s
b ased on real results (recom mendation 11).
50.
OLAF produces the following repor ts and follow-up documents
o n p e r fo r m a n c e : a n n u a l m a n a g e m e n t p l a n m o n t h l y u p d a t e,
m onthly management repor ts, annual ac tivit y repor t, annual
o p e rat i o n a l re p o r t , a n d a d h o c re p o r t s ( s u c h a s t h e 2 0 0 8 re p or t concer ning on-the -spot checks).
51.
At t h e e n d o f a n i nve s t i g a t i o n , a f i n a l c a s e re p o r t i s s u b m i tted to the Board. The Board recommends whether the case
s h o u l d b e c l o s e d w i t h o r w i t h o u t f o l l o w - u p. Fo l l o w - u p a c tion includes recovering funds and opening criminal proceed ings 34 . The responsibility for follow-up ac tion does not lie with
O L A F, b u t rat h e r w i t h Co m m i s s i o n D G s a n d n at i o n a l a u t h o r i ties. OLAF’s role is to optimise conditions for follow-up and to
ver ify whether ac tion has been taken.
52.
Table 5 shows how infor mation is repor ted in different docum ents which are produced at different times (monthly, annually or ad hoc) and for different readers (inter nal or ex ter nal).
34
The OLAF Manual identifies
four kinds of follow-up:
administrative, financial, judicial
and disciplinary.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
28
53.
TA B L E 5
I t is difficult to for m an over view of OLAF’s per for mance. The
i n fo r m a t i o n p rov i d e d i s to b e fo u n d i n d i f fe re n t d o c u m e n t s,
w h i c h a re p re p a re d fo r d i f fe re n t p u r p o s e s a n d a d d re s s e d t o
d i f fe r e n t a u d i e n c e s . A d d i t i o n a l , m o r e c o m p r e h e n s i v e i n fo rmation available in CMS is not presented. The Annual Ac tivit y
Repor t does not enable the reader to make comparisons of
O L A F ’s p e r fo r m a n c e o ve r t i m e b e c a u s e t h e re i s n o s u m m a r y
of key statistics for previous years. The Annual Operational
Repor t provides comparisons with previous years for a number
o f indicators relating to ac tivit y (infor mation received, initial
evaluations car r ied out, opening decisions and average dura tion of cases), potential results (% of cases closed with followu p ) a n d r e a l r e s u l t s ( f u n d s a c t u a l l y r e c o v e r e d ) . H o w e v e r, i t
d o e s n o t m a k e t h e i m p o r t a n t l i n k b e t w e e n O L A F ’s a c t i v i t y
(number of cases closed in a year) and the ensuing results,
b oth potential (e.g. amounts identified for recover y) and real
( e.g. amounts ac tually recovered).
AVA I L A B I L I T Y O F P E R F O R M A N C E I N D I C ATO R S
Internal
Public
Monthly reports
One-off
reports
Annual reports
Annual
management
plan monthly
update
Monthly
management
reports
Annual
activity report
Annual
operational
report
√
√
√
√
√
√
2008 report
concerning
on-the-spot
checks
Ativity
Number of investigations closed
Potential results
% of investigations closed with follow-up
√
Amounts identified for recovery from
investigations
√
Stakeholder satisfaction1
Views of Commission DGs
Real results
Actual recovery resulting from investigations
Actual recovery resulting from all cases
√
√
1
√
In 2007 OLAF launched a user satisfaction survey which was unsuccessful due to the low response rate (only six replies were received to the 45
questionnaires sent). OLAF has introduced operational conferences with Commission DGs.
Source: OLAF reports.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
29
54.
Relevant indicators are those which measure the link bet ween
OLAF’s investigations, its potential results (for example, funds
i d e n t i f i e d f o r r e c o v e r y, r e c o m m e n d a t i o n s t o o p e n c r i m i n a l
p roceedings) and its real results (for example, funds ac tually
recovered, cases resulting in a penalt y or sentence). Although
these are largely outside OLAF’s control, they do also depend
o n the qualit y and timeliness of OLAF’s investigations.
55.
I n order to be reliable, indicators should be based on accurate
d at a a n d p re s e nte d co n s i s te nt l y i n o rd e r to e n a b l e co m p a r i s o n s b e t we e n ye a r s a n d a c ro s s s e c to r s ( e. g. a gr i c u l t u re, c u stoms, external aid) or types of investigation (internal, external,
coordination and assistance).
56.
C M S c o n t a i n s i n fo r m a t i o n o n f i n a n c i a l, j u d i c i a l a n d d i s c i p l i nar y results. It also records cases closed without follow-up
w h e re O L A F h a s d i s p rove d, o r b e e n u n a b l e to p rove, t h e i n it i al allegations. The t ype of infor mation which is available in
the CMS and which could be repor ted annually is shown in
A n n e x I I I . Th e i n d i c a to r s re l a te to t h re e d i m e n s i o n s o f O L A F
o utcomes: financial, judicial and outcomes by area or sec tor.
For the financial and judicial outcomes, the tables outline the
fo llowing:
( a) ac tivit y (number of investigations closed);
( b)p otential results (investigations closed with follow-up, rec ommendations to recover funds or open cr iminal or disci plinar y proceedings);
( c )real results (actual amounts recovered or sentences passed).
57.
Th e t a b l e s i n A n n ex I I I co m p l e m e nt i n fo r m at i o n ava i l a b l e i n
cur rent repor ts. They link the real results to the year in which
t h e c a s e s we re c l o s e d. Th e i n fo r m at i o n i s p re s e nte d to d e monstrate ways in which indicators available in CMS may be re por ted, enabling reliable comparisons over time and bet ween
s e c t o r s a n d t y p e s o f i nv e s t i g a t i o n . Wi t h a d d i t i o n a l a n a l y s i s
and explanation by OLAF, this information may provide a more
complete pic ture of the ac tivit y trends and per formance in its
re por ts.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
30
CLARIFYING THE ROLE OF THE SUPERVISORY
CO M M I T T E E
58.
The Cour t followed up the recommendation of Special R epor t
N o 1/2005 to clar ify the role of the Super visor y Committee.
35
Rules of Procedure of the
OLAF Supervisory Committee,
24 August 2006 (OJ L 33,
7.2.2007, p. 7).
U P D AT I N G P R O C E D U R E S N OT Y E T CO M P L E T E D
59.
The recommendation of the Cour t, was to clarify the role of the
S u p e r v i s o r y Co m m i t te e to e n s u re t h at t h e re wa s n o i nte r fe re nce in investigations (recommendation 16).
36
Case T-48/05 of 8 July 2008.
37
The judgment of the Court
further stipulates that ‘it
cannot be disputed that the
requirement to consult that
committee before forwarding
information to the national
60.
judicial authorities is intended
The Super visor y Committee revised its rules of procedure 35 in
2006 and produced a number of repor ts and opinions concerni ng the management of OLAF with the aim of reinforcing the
i ndependence of the O ffice.
to confer rights on the persons
concerned’ (para 168).
38
OLAF Manual of Operational
Procedures, 1 December 2009,
Sections 3.3.6.1.1 and 3.4.3.2.1.
61.
H o w e v e r, a j u d g m e n t o f t h e C o u r t o f Fi r s t I n s t a n c e i n J u l y
2 0 0 8 36 h e l d t h a t a n i m p o r t a n t f u n c t i o n o f t h e S u p e r v i s o r y
Co m m i t te e w a s to p ro te c t t h e r i g h t s o f p e r s o n s w h o a re t h e
subjec t of OLAF investigations 37 . Af ter the judgment was pro nounced, a prac tical work ing arrangement had to be found to
consult the Super visor y Committee before for warding informat i on to the national judicial author ities.
39
OLAF also provides the
Committee with a summary note
indicating whether the person
concerned has been informed
and been given the right to
reply and whether the case is
within the time limits set by the
national authorities.
62.
T h e n e w m a n u a l r e q u i r e s t h e i n fo r m a t i o n t o b e p r o v i d e d a t
l e a s t f i ve wo r k i n g d ays b e fo re t ra n s m i s s i o n 3 8 . I n J u n e 2 0 1 0 a
new procedure has been agreed between OLAF and the Supervisor y Committee to ensure that the letter transmitting cases
to national judicial authorities is signed at least five worki ng days af ter the note infor ming the Super visor y Committee
about the envisaged transmission 39 . OLAF committed itself to
t a k e a ny a d v i c e o f t h e S u p e r v i s o r y C o m m i t t e e i n t o a c c o u n t
a nd reac t on a case -by- case basis.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
31
63.
However, in consideration of the decision of the Cour t of First
I nstance, this procedure puts at r isk the r ights of individuals
concer ned since it does not descr ibe the steps to be taken in
the event that the Super visor y Committee decides to issue
a n opinion. The absence of binding procedures in this regard
makes it more difficult to ascer tain that the Super visor y Com m i t te e h a s n o t i nte r fe re d w i t h t h e co n d u c t o f i nve s t i g at i o n s
i n progress.
40
The decision stipulates
‘that the Committee must be
informed before the information
is forwarded to the national
judicial authorities’ (paragraph
164) and ‘that the obligation
to inform the Supervisory
Committee is unconditional and
leaves no margin of discretion’
(paragraph 170).
64.
F ur thermore, OLAF applies a polic y of transmitting information
to the national authorities without informing the Super visor y
Co m m i t te e w h e re O L A F i s awa re t h at a c a s e i s a l re a d y b e i n g
dealt with by the national judicial authorities. In 2009 OLAF re corded nine such cases where infor mation was transmitted to
n ational author ities without infor ming the Super visor y Committee in contrast to the position of the Cour t of First Instance,
w hereby the obligation to infor m the Super visor y Committee
i s ‘unconditional and leaves no margin of discretion’ 4 0 .
65.
The members of the Super visor y Committee are appointed by
common accord of the European Par liament, the Council and
t he Commission (see Ar ticle 11 of OLAF regulation). The ter m
of office of the members of the Super visor y Committee is three
years and is renewable once. On expir y of their term of office,
m e m b e r s s h a l l re m a i n i n o f f i c e u n t i l t h e i r a p p o i n t m e n t s a re
re n e we d o r u nt i l t h e y a re re p l a ce d. Th e m e m b e r s o f t h e c u rrent Super visor y Committee took office on 30 November 2005.
Their ter m of office expired on 29 November 2008. The Cour t
notes that more than two years later, a decision to renew their
te r m of office or to replace t hem is still pending. Such a situation is unsatisfac tor y.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
32
CONCLUSIONS AND
RECOMMENDATIONS
R E F O C U S I N G O N T H E I N V E S T I G AT I V E
FUNCTION
66.
The Cour t ’s previous repor t made six recommendations to refo cus ac tivities on OLAF’s investigative func tion. Three of these
recommendations, concerning the divestment or separation of
ac tivities (recommendations 2, 14 and 15), were not accepted,
and the other three have been par tially implemented (recom mendations 7, 17 and 13). Consequently, all six recommenda tions for OLAF to refocus on its investigative func tion are still
valid.
67.
I n ter ms of the allocation of its resources, OLAF has not refo cused on its investigative func tion. The Commission considers
OLAF as an all-round anti-fraud authority rather than a ser vice
concentrated on investigations. Consequently it did not accept
the recommendations of the Cour t ’s previous repor t to divest
activities such as anti-fraud strategy and funding programmes.
The number of staff in investigation direc torates as a proport i o n o f a l l s t a f f a m o u nte d to 3 4 % i n J a n u a r y 2 0 1 0 . Th e Ti m e
M a n a g e m e nt Sys te m s h owe d t h at t h e O f f i ce a s a w h o l e a l l o c ated 37 % of its time to casewor k in 2009 (see paragraphs 8
to 11).
68.
When car r ying out investigations, OLAF now makes more use
o f i t s i nve s t i g a t i ve p owe r s, fo r e x a m p l e to c a r r y o u t o n - t h e spot checks and inter views. OLAF suppor t ser vices contribute
t o i nve s t i g a t i o n s w h e re a p p ro p r i a t e a n d i n 2 0 0 9 s p e n t 2 5 %
o f their time in this way. I n this contex t, the strategic intelligence units identify areas of risk , but their work rarely triggers
i nvestigations (see paragrap hs 12 to 18).
F O L L O W - U P R E C O M M E N D AT I O N 1
O L AF sh o u l d in cre as e th e nu m b e r an d sp e e d o f inve s ti g a tions by increasing the prop or tion of time sp ent on it s core
inve s ti g ati ve f un c ti o n .
F O L L O W - U P R E C O M M E N D AT I O N 2
T h e co ntr ib u ti o n th e inte lli g e n ce uni t s m ake to inve s ti g a ti ve wo r k sh o ul d b e e nhan ce d .
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
33
IMPROVING THE EFFICIENCY OF
I N V E S T I G AT I O N S
69.
Th e Co u r t ’s p re v i o u s re p o r t m a d e e i g ht re co m m e n d at i o n s to
improve the efficienc y of investigations (recommendations
3 , 4, 5, 6, 8, 9, 10 and 12). Except for recommendations 3 and
12, the other recommendations are not yet fully implemented
a nd therefore still valid.
70.
T h e C o u r t ’s p r e v i o u s r e p o r t m a d e r e c o m m e n d a t i o n s t o e n s u r e a c l e a r p r o c e d u r a l f r a m e w o r k fo r i nv e s t i g a t i o n s a n d t o
improve planning and super vision so that investigations were
implemented in a timely and efficient manner. OLAF has taken
measures to clar ify the procedural framewor k through the int ro d u c t i o n o f a n e w m a n u a l i n D e c e m b e r 2 0 0 9 a n d a Pr a c t ic a l Ag r e e m e n t fo r c o o p e r a t i o n w i t h E u r o j u s t i n 2 0 0 8 . O t h e r
measures taken by OLAF to improve efficiency were the introduction of a time management system, the development
of a de minimis polic y to focus on ser ious and complex cases,
b e t te r u s e o f C M S ( t h o u g h i t i s s t i l l n o t f u l l y u s e d ) , m o re foc u s e d t r a i n i n g, a re d u c t i o n i n t e m p o r a r y s t a f f, a n d s p l i t t i n g
t he B oard into smaller groupings.
71.
D e s p i t e t h e s t e p s t a k e n b y O L A F t o i m p ro ve e f f i c i e n c y,
progress has been slow and remains incomplete. The new
m a n u a l wa s n o t i nt ro d u ce d u nt i l D e ce m b e r 2 0 0 9 a n d t h e l e g al f ram e wo r k ha s n ot ch a ng ed si nce t he Co u r t ’s la st re po r t.
Although OLAF entered into an agreement for cooperation
w i t h Eu ro j u s t, i n fo r m at i o n o n o n l y o n e c a s e wa s t ra n s m i t te d
from OLAF to Eurojust in 2009. Although TMS is used to record
time spent, the information it contains is not used to plan and
s uper vise investigations. The volume of initial infor mation to
b e a s s e s s e d h a s i n c re a s e d c o n s i d e r a b l y a n d t h e d u r a t i o n o f
these assessments has doubled. The duration of investigations
remains long, sometimes due to outside factors, but more generally due to internal fac tors such as other priorities or lack of
re sources (see paragraphs 19 to 44).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
34
F O L L O W - U P R E C O M M E N D AT I O N 3
T h e le gal f r am ework for comb ating f r aud and ir re gularities
should be revised to simplif y and consolidate the anti-fraud
legislation. Such an overhaul should address weaknesses
i n O L A F ’s c u r r e n t p o w e r s a n d p r o c e d u r e s , i n p a r t i c u l a r
co n ce r nin g co o p e r ati o n b e t we e n O L AF an d th e co mp e te nt
s e r v i ce s in M e m b e r St ate s .
F O L L O W - U P R E C O M M E N D AT I O N 4
OL AF should strengthen its cooperation and par tnership
with Eurojust, which, under Ar ticle 85 of the TFEU, is taske d
with co ordinating criminal inves tigations and prose cutions
relating to of fences against the f inancial interests of the
U n i o n . To t h i s e n d , O L A F s h o u l d p u t i n p l a c e p r o c e d u r e s
to i d e nti f y all re l ev ant c as es , co mmunic ate inf o r m ati o n o n
them to Eurojust on a timely basis, and repor t on the results
o f i t s co o p e r ati o n w i th Eurojus t o n a re gular b asis .
F O L L O W - U P R E C O M M E N D AT I O N 5
T h e p rov isi o nal p lans f o r inve s ti g ati o ns sh o ul d in clu d e e s t i m a t e s o f r e s o u r ce s r e q u i r e d a n d d e a d l i n e s . T h e s e p l a n s
should be monitored and updated once investigative ac tivi ties are under way. Infor mation f rom th e T im e M anagem ent
System ( TMS) should be used to provide more ef fec tive sup p o r t to inve s ti g ato r s an d m ana g e r s .
F O L L O W - U P R E C O M M E N D AT I O N 6
The overall duration of assessments and investigations
should be bet ter controlled to improve the impac t of inves tigations and make b et ter use of resources availab le. To
t h i s e n d , t h e B o a r d s h o u l d p l ay a r o l e i n m o n i t o r i n g l o n g
a n d co m p l e x i nve s t i g a t i o ns , to e ns u r e a p p r o p r i a te a c t i o n
is t ake n .
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
35
REPORTING ON THE EFFECTIVENESS OF
I N V E S T I G AT I O N S
72.
The Cour t ’s previous repor t made t wo recommendations conce r n i n g t h e d e m o n s t rat i o n o f t h e e f fe c t i ve n e s s o f i nve s t i g a tions (recommendations 1 and 11). Although these have been
p ar tially implemented, the recommendations are still valid.
73.
The Annual Management Plan establishes clearly quantified
targets for the O ffice which are regularly monitored. However,
clear financial objec tives are not systematically identified for
i ndividual investigations (se e paragraphs 45 to 48).
74.
There is considerable information available in CMS which enables OLAF’s per formance to be compared over time and across
d i fferent sec tors. These statistics concer n ac tivit y (investigations closed), potential results (investigations closed with foll ow-up; recoverable amount) and real results (ac tual amount
recovered). However, the information is not currently repor ted
in a single document which would enable the reader to assess
OLAF’s per formance. The 696 ex ternal investigations closed in
the period 2004 to 2009 identified 656 million euros for recover y, of which 180 million euros had ac tually been recovered at
t he time of the audit in Apr il 2010 (see paragraphs 49 to 57).
F O L L O W - U P R E C O M M E N D AT I O N 7
Clear objec tives for individual investigations should b e s ystematically set and updated, and results should be repor ted
in te r ms o f o bj e c ti ve s a chi eve d .
F O L L O W - U P R E C O M M E N D AT I O N 8
CMS should be used more extensively in management
d e c is i o n - m a k i n g a n d to p r o d u ce b e t te r r e p o r t s . Pe r f o r m ance s t atis tic s on O L AF’s ac tiv it y, p otential and real result s
should b e made available in a single rep or t, including com p ar is o ns ove r tim e.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
36
CLARIFYING THE ROLE OF THE SUPERVISORY
CO M M I T T E E
75.
T h e C o u r t ’s p r e v i o u s r e p o r t m a d e o n e r e c o m m e n d a t i o n t o
c l a r i f y t h e ro l e o f t h e S u p e r v i s o r y Co m m i t te e ( re co m m e n d a tion 16). Some action has been taken, but implementation
re mains incomplete.
76. Following the July 2008 judgment of the Cour t of First Instance,
OLAF applies a new procedure to consult the Super visor y Com mittee before transmitting information to national judicial au t h o r i t i e s. H o we ve r, t h i s p ro c e d u re d o e s n o t d e f i n e t h e s t e p s
to b e t a k e n i f t h e S u p e r v is o r y Co m m i t te e d e c i d e s to i s s u e a n
o p i n i o n . A p a r t f ro m c a s e l aw, t h e l e g a l f ra m e wo r k to p ro te c t
the rights of persons being investigated has not changed since
the Cour t ’s last repor t (see paragraphs 58 to 65).
F O L L O W - U P R E C O M M E N D AT I O N 9
In agreement with OL AF, the Super visor y Commit tee should
d e f in e a f o r m al p ro ce dure to o u tlin e th e s te ps to b e t ake n
if it decides to issue an opinion on a case on which it is
co nsul te d . T h e l e g al f r am ewo r k sh o ul d b e rev is e d in o rd e r
b e t te r to p rote c t th e r i ght s o f p e r s o ns b e in g inve s ti g ate d .
Th i s R e p o r t wa s a d o p te d by C h a m b e r I V, h e a d e d by M r I g o r s
LU D B O R Ž S , M e m b e r o f t h e Co u r t o f Au d i to r s, i n Lu xe m b o u rg
at its meeting of 8 Februar y 2011.
For the Cour t of Auditors
Ví tor M anuel da S I LVA C A L D E I R A
President
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
37
ANNEX I
S TAT U S O F I M P L E M E N TAT I O N O F R E CO M M E N D AT I O N S
( S P E C I A L R E P O R T N o1 /2005 ) 1
Recommendations
Accepted
Implemented2
Partially
Partially
14. Transfer responsibility for anti-fraud strategy to other Commission services
Not accepted
No
15. Give responsibility for managing funding programmes (e.g. Pericles and Hercules) to other Commission services
Not accepted
No
2. Consider creating a separate unit dedicated to coordination and assistance operations to improve management of
resources
Not accepted
No
17. Refocus activities on the investigative function, accompanied by changes in governance and regulations
Partially
Partially
13. Strategic analysis services should seek improvement in the data forwarded by Member States and create databases
which can be used to identify anomalies and launch investigations
Accepted
Partially
Accepted
Partially
Accepted
Partially
3. Establish smaller groupings on the Executive Board with the aim of setting clear plans and objectives for investigations
Accepted
Yes
5. Introduce a time recording system linked to work plans with estimates of time to be spent on investigations to align
workload with resources and to avoid delays
Accepted
Partially
Accepted
Partially
Partially3
Partially4
10. Convert CMS into a true system of investigation management and increase training of investigators in investigation
techniques, legislation and report-writing skills
Accepted
Partially
12. Implement a masterplan for personnel management to resolve structural problems
Accepted
Yes
1. Specify results to be achieved by investigations and introduce performance indicators to assess success
Accepted
Partially
11. Produce reliable and relevant reports on performance, based on real rather than potential results
Accepted
Partially
Accepted
Partially
Recommendations to refocus activities on OLAF’s investigative function
Divest or separate non-core activities
7. Remove follow-up activities (involvement in judicial proceedings and recovery of funds) that can be performed by
authorising officers
Improve contribution of strategic services to the investigative function
Recommendations to improve the efficiency of investigations
Legal and procedural framework
8. Codify and publish procedures to protect the rights of individuals at all stages of the investigation and to provide controls
on the legality of the investigative acts in progress
Cooperation with Member States
9. Formalise arrangements for cooperation between OLAF and the Member States through legislation or the conclusion of
agreements with national investigation services
Planning
Focus on priorities
4. Supervise the investigation process to focus on priorities and on the search for evidence by making better use of the
investigation means available
Timely completion
6. Establish a maximum duration for investigations
Support from IT systems and personnel function
Recommendations to demonstrate the effectiveness of investigations
Recommendation for the Supervisory Committee to reinforce OLAF’s independence
16. Clarify the role of the Supervisory Committee to ensure that there is no interference in ongoing investigations
1
The recommendations made in Special Report No 1/2005 were not numbered. They are numbered here according to the order they appeared in the report.
2
Yes – recommendation implemented; No – recommendation not implemented and still valid; Partially – varying degrees of implementation and further action recommended.
3
The Commission replied that it proposed to amend Regulation (EC) No 1073/1999 and introduce a duration of 12 months with the possibility of extending investigations by up to six
months at a time.
4
The legal framework has not yet been amended.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
38
ANNEX II
O L A F O R G A N I S AT I O N C H A R T 1
DIRECTOR-GENERAL
13 staff
DIRECTORATE A
Investigations and
Operations I
6 staff
DIRECTORATE B
Investigations and
Operations II
4 staff
DIRECTORATE C
Operational and Policy Support
4 staff
UNIT A1
Internal Investigations: European Institutions
21 staff
UNIT B1
Agriculture
20 staff
UNIT C1
Judicial and Legal
Advice
21 staff
UNIT D1
Spokesman, Communication and
Public Relations
9 staff
UNIT D5
Administration and
Human Resources
12 staff
UNIT A2
Internal/External
Investigations:
EU Bodies
9 staff
UNIT B2
Customs I
20 staff
UNIT C2
Fraud Prevention and Intelligence
31 staff
UNIT D2
Legal Affairs
7 staff
UNIT D6
Budget
10 staff
UNIT A3
Direct Expenditure
and External Aid
20 staff
UNIT B3
Customs II
17 staff
UNIT C3
Mutual Assistance
and Intelligence
36 staff
UNIT D3
Inter-institutional and
External relations
9 staff
UNIT D7
Training
9 staff
UNIT A4
External Aid
24 staff
UNIT B4
Structural Measures
21 staff
UNIT C4
Operational
Intelligence
28 staff
UNIT D4
Corporate Planning
and policy
14 staff
UNIT D8
Information services
110 staff
DIRECTORATE D
General Affairs
3 staff
UNIT C5
Euro protection;
Hercule and PericlesProgrammes
11 staff
1
The chart shows the actual number of staff employed in March 2010.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
39
P OT E N T I A L I N D I C ATO R S
TABLE A — Indicators of activity, potential and real financial results 1
2004
2005
2006
2007
2008
2009
Total
151
104
100
117
121
103
696
59
52
60
66
67
52
356
183,7
43,8
54,7
122,6
121,0
130,6
656,4
Amount recovered (million euro)
73,0
8,8
9,2
43,8
28,3
16,6
179,7
Amount written off (million euro)
5,7
0,3
1,9
1,8
0,0
15,4
25,1
105,0
34,7
43,6
77,0
92,7
98,6
451,6
Activity
External investigations closed
External investigations
ANNEX III
Potential results
With financial follow-up
Recoverable amount (million euro)
Real results
Amount outstanding (million euro)
1
The financial amounts in the table are attributed to the year in which follow-up commenced regardless of the year in which the money was actually
received. The table therefore does not show amounts recovered relating to cases closed in 2003.
Source: OLAF as at April 2010.
Table A shows CMS data on external investigations concerning activity (number of investigations closed),
potential results (closed with follow-up and amounts identified for recovery) and real results (actual recovery).
Over the six year period between 2004 and 2009, of the 696 external investigations closed, 356 (51 %) cases
involved potential financial follow-up.
Over the same six year period the total amount identified for recovery was 656,4 million euro. The total actual
amount recovered (over the same six years) up to the time of the audit in April 2010 was 179,7 million euro
(27 %).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
40
ANNEX III
TABLE B — Indicators of activity, potential and real judicial results
Year of follow-up recommendation
Total
2004
2005
2006
2007
2008
2009
151
104
100
117
121
103
696
33
46
32
42
55
32
240
112
91
48
67
66
22
406
Cases dismissed
63
24
17
11
9
0
124
Cases outstanding
26
55
28
51
57
16
233
Penalty or sentence
23
12
3
5
0
6
49
Investigations closed
39
30
31
34
25
37
196
Penalty or sentence
1
2
2
0
0
0
5
Cases closed
149
99
86
81
41
48
504
Penalty or sentence
182
63
17
39
19
2
322
Cases closed
339
233
217
232
187
188
1 396
Penalty or sentence
206
77
22
44
19
8
376
8
12
13
19
12
1
65
Activity
Investigations closed
Potential results
External
investigations
Internal
investigations
Coordination and
assistance
Total all cases
Internal
investigations
With judicial follow-up
Related actions
Real results
Disciplinary actions triggered
Source: OLAF as at April 2010 (One case may lead to a number of actions and subsequent penalties and sentences).
Table B shows CMS data on activity, potential and real results in the judicial sphere. Over the six year period
between 2004 and 2009, the following observations can be made:
• External Investigations: out of the 696 external investigations closed, 240 (34 %) have been with judicial
follow-up, leading to 406 related actions. Of these, 49 (12 %) have resulted in judicial decisions (including
four acquittals and 11 rulings under appeal), 124 actions (30 %) have been dismissed while the results
of 233 actions remain outstanding. Of the 124 cases dismissed, 76 (61 %) were due to lack of evidence
whilst nine (7 %) were due to prescription.
• Internal investigations: the number of final rulings by judicial authorities in respect of internal
investigations is extremely limited, amounting to five rulings for a total of 196 cases closed with 45
judicial paths opened and 62 related actions, 16 of which were dismissed. Internal investigations closed
during the period also triggered disciplinary proceedings against 65 persons.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
41
ANNEX III
• Coordination and assistance cases: these are considerably more successful than internal and external
investigations in terms of achieving final rulings by judicial authorities for cases closed with follow-up
during the period 2004 to 20091.
The table shows how judicial results vary between the different categories of cases. Judicial follow-up
takes on average 3,5 years to complete, which explains in part why the number of penalties or sentences
are lower in recent years.
1
In coordination and assistance cases national judicial authorities have already taken a decision to deal with a case which explains
the higher success rate of these cases.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
42
ANNEX III
TABLE C — Financial results in different areas
Recovered to date
Cases
closed
2004–09
Agriculture
External Investigations
Closed with
financial
follow-up
92
Recoverable
(million
euro)
(million
euro)
%
Recovery
per case
closed with
financial
follow-up
(million
euro)
49
136,8
5,5
1,7 %
0,11
Customs
102
69
306,6
112,9
35,4 %
1,64
External Aid
225
101
74,9
10,9
3,4 %
0,11
Structural Funds
124
76
124,2
46,6
14,6 %
0,61
Other
153
61
13,9
3,8
1,2 %
0,06
Sub total
1
696
356
656,4
179,7
56,4 %
0,50
Internal investigations
196
33
3,0
0,5
0,2 %
0,02
Coordination and assistance
504
201
877,0
138,3
43,4 %
0,69
1 396
590
1 536,4
318,5
100,0 %
0,54
Total
1
Other consists of direct expenditure, EU bodies and agencies and trade.
Source: OLAF as at April 2010.
Table C compares financial results in different sectors. For external investigations, the customs area
represented the highest proportion of recoverable amounts (20 %) and of actual recoveries (35 %).
The financial results from other areas were lower.
Over the six year period (2004 to 2009), coordination and assistance cases account for 57 % (877 million
euro out of 1 536 million euro) of potentially recoverable amounts for the Office as a whole, and 43 %
(138 million euro out of 319 million euro) of actual recoveries.
The recovery per investigation shows the average amount recovered per case closed with financial followup in each sector (for example in the case of agriculture, 5,5 million euro was recovered, from a total of
49 cases, resulting in an average recovery per case of 0,11 million euro).
Whilst the different sectors are not directly comparable because they manage different types of cases, the
table shows the variation in average amounts recovered per case, across sectors.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
43
REPLY OF THE
COMMISSION
EXECUTIVE SUMMARY
I.–II.
The Commission would like to point out
t h a t O L A F ’s d e v e l o p m e n t o v e r t h e p a s t
11 years has proven that OLAF is best
placed as an all-round anti-fraud ser vice
in order to protect the financial interests
o f t h e E U. T h i s o v e r a l l m i s s i o n c o m p r i s e s
three complementar y tasks, i.e. conducting administrative investigations in full
independence, assisting M ember States by
o r g a n i s i n g c l o s e a n d re g u l a r c o o p e r a t i o n
b e t we e n t h e i r co m p e te nt a u t h o r i t i e s, a n d
by co nt r i b u t i n g to t h e d e s i gn o f t h e Co m mission’s anti-fraud regulator y ac tivit y and
s t rate g y. O L A F’s p o l i c y wo r k b e n e f i t s f ro m
its investigative exper ience and vice versa.
Nearly 75 % of staff are operational in
t h e s e n s e t h a t t h e y a re e i t h e r c o n d u c t i n g
or suppor ting investigations, both in the
investigation directorates and the suppor ting direc torates.
III.
T h e C o m m i s s i o n s h a r e s t h e C o u r t ’s o v e r all assessment of the progress made by
O L A F, i n p a r t i c u l a r w i t h t h e e f f i c i e n c y o f
its investigations. OLAF’s line management
super vises investigations on the basis of
wo r k p l a n s w h i c h a re re g u l a r l y u p d a t e d i n
t h e Ca s e M a n a g e m e nt Sys te m (C M S ) . O L A F
is committed to improving its management
tools on a continuous basis.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
44
REPLY OF THE
COMMISSION
I V.
The Commission is currently preparing
a revised proposal to amend Regulation
1073/1999. It is envisaged that the proposal will strengthen the rights of the
persons concerned and also comprise
provisions on a review procedure and on
co o p e rat ion with Eurojust and Europol.
The Commission considers that, even
under the existing legal framework, the
rights of individuals concerned are protected and that an independent control
of investigative acts exists, to which the
case law of the Cour t of Justice has been
i n c r e a s i n g l y c o n t r i b u t i n g s i n c e t h e Co u r t
m a d e i t s statement in 2005.
V.
O L A F ’s r e p o r t s a r e u n d e r c o n s t a n t d e v e l opment in order to improve their practical use as a management tool. OLAF will
examine whether a statistical annex can be
appended to the annual operational repor t
i n t h e f u t u re w h i c h wo u l d e n s u re a b e t te r
co m p a r i son of per for mance indicators.
VI.
The proposal for the reform of Regulat i o n 1 0 7 3 / 1 9 9 9 w i l l co n s o l i d ate t h e r i g ht s
of individuals concerned and make them
m o re v i s ible.
The rights of individuals concerned are
already protected in the existing legal
framework, as well as by national cour ts
a n d by t h e ra p i d l y d e ve l o p i n g c a s e l aw o f
t h e Co u r t of Justice.
VII.
(a) Th e Co m m i s s i o n a gre e s t h at t h e s p e e d
o f i nv e s t i g a t i o n s i s a n a r e a t h a t c o u l d
be fur ther improved.
OLAF will make ever y effor t to increase
the efficienc y and effectiveness of its
investigative work, which remains its
c o re t a s k . Fu r t h e r m o re, O L A F w i l l l o o k
into the possibility of increasing the
propor tion of its time spent on its investigative func tion.
I n order to use its resources efficiently,
OLAF is pr imar ily committed to dealing
w i t h s e r i o u s c a s e s a n d i s p ro gre s s i ve l y
applying minimum financial thresholds.
(b) O L A F a l r e a d y h a s i n i t i a l w o r k p l a n s i n
place, which it is committed to develop
fur ther so as to improve overall planning.
The Commission agrees that OLAF
should endeavour to reduce the overall
duration of assessments and investigations. Duration is a key per formance
indicator for OLAF, which OLAF is comm i t t e d t o re d u c i n g w h e re ve r p o s s i b l e,
par ticularly through improved monitoring of complex investigations.
Under the existing governance frame wo r k , t h e B o a rd d e l i ve r s re co m m e n d a tions on fundamental decisions relating
t o t h e t re a t m e n t o f c a s e s. B u t i t i s t h e
role of line management to examine in vestigation plans regular ly, guide their
d e ve l o p m e n t a n d t a k e d e c i s i o n s i n o rder to respec t timeframes and speed up
investigations wherever possible. OLAF
considers that the Board involvement in
the monitoring process would dilute re sponsibility of OLAF’s line management.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
45
REPLY OF THE
COMMISSION
OBSERVATIONS
( c ) O L A F’s var ious repor ts are intended for
d i f fe re n t a u d i e n ce s, i n c l u d i n g i n te r n a l
management and external stakeholders.
O L A F w i l l t r y t o i m p rove t h e s e re p o r t s
f u r t h er.
( d ) A n a d e q u a t e p r o c e d u r e h a s b e e n d e fined and implemented by OLAF and
the Super visor y Committee that takes
account of the requirement for OLAF
to inform the Super visor y Committee
before transmitting cases to national
j u d i c ial author ities as well as of the investigative independence of the OLAF
D i r e c t o r. O L A F w i l l t a k e a n y a d v i c e o f
the Super visor y Committee into account
a n d re a c t o n a c a s e - by - c a s e b a s i s. A ny
formal procedure for the Super visor y
Committee to intervene in ongoing
c a s e s co u l d b e s e e n a s a n i n te r fe re n ce
with the investigative independence of
t h e OLAF Direc tor.
INTRODUCTION
B ox 1 — OL AF’s role and tasks
Key o bj e c tives a nd ac tivities
I t i s e nv i s a g e d t h a t t h e d r a f t re v i s e d p ro p o s a l to a m e n d R e g u l at i o n 1 0 7 3 / 1 9 9 9 w i l l
f u r t h e r u n d e r l i n e O L A F ’s r o l e t o p r o m o t e
and coordinate a more intensive sharing
o f o p e rat i o n a l ex p e r i e n ce a n d b e s t p ro ce d u ra l p ra c t i ce s, a s we l l a s to s u p p o r t j o i nt
a nt i - f ra u d ac tions.
6.
The Commission notes that OLAF has
expressed different views regarding the
gradings of a number of cases.
9.
O L A F h a s fo c u s s e d i t s f i n a n c i a l fo l l o w - u p
activities on important cases where the
financial impact meets specific thresholds defined for the respec tive sec tors and
t ypes of procedures.
10.
The 34 % figure in isolation does not
reflect the propor tion of OLAF resources
devoted to investigation. In terms of
s t a f f a l l o c a t i o n to i nve s t i g a t i ve a c t i v i t i e s,
nearly 75 % are involved in operational
c a s e wo r k , i . e. i n c l u d i n g p rov i d i n g s u p p o r t
to i nve s t i g at i o n s. Th e s p l i t by d i re c to rate s
does not thus reflect the proportion of
staff involved in investigations.
11.
Even though the figure of 37 % is generated from the Time Management System
( T M S ) , i t d o e s n o t e n t i re l y re f l e c t t h e re a l
s i t u a t i o n . I n p a r t i c u l a r, i n v e s t i g a t o r s i n
D i re c to ra te s A & B re g u l a r l y u s e t h e ‘ M a nagement and administration’ categor y
w h e n t h e y a re d e a l i n g w i t h a d m i n i s t rat i ve
tasks e.g. repor ts which are purely case related. Also middle and senior manage ment and secretaries in the investigative
units often use this category for case related paper wor k . OLAF will examine how
to improve the use of the TMS to better
reflec t the division of wor k .
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
46
REPLY OF THE
COMMISSION
13.
I n order to improve the gover nance frame work, the revised proposal for amending Regulation 1073/1999 will inter alia
c o m p r i s e a p r o v i s i o n o n t h e ‘e xc h a n g e o f
v i e w s’ b e t w e e n t h e E U i n s t i t u t i o n s ( E u r o pean Commission, European Parliament
and Council) and OLAF on relevant quest i o n s co n ce r n i n g i t s s t rate gi c wo r k i n g p r io r i t i e s.
17.
OLAF has issued specific recommendations
to s e ve ral Commission ser vices to improve
f r a u d p r e v e n t i o n fo l l o w i n g a n a l y s i s o f i t s
o p e rat i o nal cases.
18.
According to the jurisprudence of the
Co u r t o f J u s t i ce 1 , ‘s u f f i c i e n t l y s e r i o u s s u s p i c i o n’ i s re q u i re d fo r o p e n i n g a c a s e. Th i s
means that OLAF is not allowed to conduc t
investigative ac tivities based solely on r isk
a s s e s s m e nt s w i t h o u t s e r i o u s l e ve l s o f s u s picion being attained. Since 2007, OLAF
has produced more than 10 strategic intel l i g e n c e a n a l y s e s fo r C o m m i s s i o n s e r v i c e s
and M ember States, which contain specific
re c o m m e n d a t i o n s t o s u b s t a n t i a l l y re d u c e
the risks and impact of irregularities and
f ra u d.
21.
I t i s p r i m ar ily the role of line management
to e n s u re t h at c l e a r c a s e p l a n s a n d o b j e c t i ve s a re set and regular ly monitored.
The Board delivers recommendations on
fundamental decisions relating to the
t re at m e nt of cases.
1
OLAF considers that involvement of the
B o a rd i n t h e m o n i to r i n g p ro ce s s wo u l d b e
l i k e l y to re s u l t i n a d i l u t i o n o f re s p o n s i b i l it y of OLAF’s line management.
22.
The TMS was designed to provide manage ment with a global view of how much time
i s s p e n t o n a s e t o f 2 0 p re - d e f i n e d a c t i v ities, such as investigation, follow-up, intel l i g e n ce, a d m i n i s t rat i o n , e tc. Th i s i n fo r m a tion is compiled in a monthly TMS repor t
fo r e a c h o rg a n i s at i o n a l e nt i t y, w h i c h
allows managers to review resource alloca tion within their area of responsibilit y and
senior management to initiate resource
allocation across the Office. The existing
c a s e m a n a g e m e n t fe a t u re s o f C M S w i l l b e
re v i e we d w i t h a v i e w to s t re n g t h e n i n g i t s
case planning capabilities.
23.
The Commission agrees that workplans
contribute to the efficienc y of investigat i o n s. O L A F ’s M a n u a l a l re a d y o u t l i n e s t h e
b a s i c e l e m e n t s o f i n i t i a l wo r k p l a n s w h i c h
s h o u l d d e s c r i b e t h e s c o p e a n d i nv e s t i g a tive steps insofar as they can be anticip a t e d a t t h a t s t a g e . H o w e v e r, w h e n a n
i nve s t i g a t i o n s t a r t s, i t i s d i f f i c u l t to k n ow
where it will lead. Circumstances can
change for reasons outside OLAF’s control,
s o i nve s t i g ato r s a n d t h e i r m a n a g e r s a re i n
c o n s t a n t t o u c h , a n d re v i s e t h e wo r k p l a n s
when needed.
The initial workplan and subsequent
updates are all registered in the CMS.
C-11/00 Commission v. ECB; C-15/00 Commission v. EIB, 10 July
2003
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
47
REPLY OF THE
COMMISSION
I n t h e l i ght of the Cour t ’s comments:
Ū Ū O L A F w i ll e n s u re t h at i n i t i a l wo r k pl a n s
always include the objec tives and scope
o f t h e i nv e s t i g a t i o n , a n d e s t i m a t e d f i n a n c i a l i m p a c t . I f i t i s p o s s i b l e at s u c h
an early stage, the plans will also include an initial estimate of resources
required, possible missions and a likely
t i m e f rame.
ŪŪ O L A F i s co m m i t te d to i m p rov i n g t h e
m o n i to r i n g a n d u p d at i n g o f wo r k p l a n s
o n a regular basis.
ŪŪ As regards the TMS, see reply to paragra p h 22 2 .
26.
I t s h o u l d b e e m p h a s i s e d t h a t O L A F ’s
overall objective is the protection of the
f i n a n c i a l i n t e r e s t s o f t h e E U. T h e n u m b e r
of cases is not an adequate parameter
b y w h i c h t o j u d g e O L A F ’s p e r f o r m a n c e .
G i ve n t h at O L A F’s p o l i c y i s to fo c u s o n t h e
m o re s e r i o u s a n d co m p l ex c a s e s w h e re i t s
involvement clearly adds value, the fact
that the number and duration of investigations has remained largely stable should
b e co n s i dered as an achievement.
2
As regards the two cases mentioned in footnote 10, these were
exceptional cases and OLAF will review its procedures in this
27.
T h e Co m m i s s i o n d o e s n o t c o n s i d e r t h a t a
maximum duration for investigations, in
the sense of an absolute limit, would be
appropriate. Because of the ver y nature
of an investigation and its uncer tainties,
a f i xe d m a x i m u m d u r a t i o n c a n n o t b e s e t .
Ta k i n g i n t o a c c o u n t i t s o p e r a t i o n a l e x p e r i e n ce a n d t h e va r i o u s f a c to r s i n f l u e n c i n g
t h e co u r s e o f a n i nve s t i g a t i o n , O L A F s e t a
realistic target in its 2010 Annual M anage ment Plan (AMP) of closing 75 % of cases
within 24 months. This is not a maximum
duration, but a target allowing for a necessar y amount of flexibilit y.
It is envisaged that the proposal for the
r e fo r m o f R e g u l a t i o n 1 0 7 3 / 1 9 9 9 w i l l c o n t a i n p rov i s i o n s fo r i m p rov i n g t h e m o n i to r ing of the duration of investigations.
28.
T h e C o m m i s s i o n s h a r e s t h e C o u r t ’s v i e w
that the duration of investigations is a key
p e r fo r m a n c e i n d i c a t o r i n t e r m s o f O L A F ’s
operational procedures. It is recognised
a s s u c h i n O L A F’s AM P. O n t h e o t h e r h a n d,
targets need to be realistic and have to
reflec t ac tual operational circumstances.
The Commission recalls that the provision on 9-month reports in Regulation
1 0 7 3 / 1 9 9 9 i s n o t a t a rg e t d e a d l i n e fo r t h e
completion of an investigation 3 .
regard.
3
The obligation to report to the Supervisory Committee on cases
that are still open after nine months should be considered in
the context of the Supervisory Committee’s role of reinforcing
the independence of the Office. Historically, the purpose of this
reporting was to prevent an interference by the Institutions in
OLAF’s independent case work.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
48
REPLY OF THE
COMMISSION
Th e 2 4 m o nt h s t a rg e t s e t i n O L A F’s AM P i s
r e a l i s t i c t a k i n g i n t o c o n s i d e r a t i o n O L A F ’s
operational experience and the various
factors influencing the course of investig a t i o n s ( s u c h a s O L A F ’s d e p e n d e n c e o n
cooperation from Member States or third
c o u n t r i e s ) . H owe ve r, o n e s i ze d o e s n o t f i t
all, and in recognition of these factors,
OLAF is assessing the possibilit y of mak ing
a clear distinction between the duration
t a r g e t s fo r d i f fe r e n t t y p e s o f c a s e , w h i l s t
s t i l l re t a i n i n g t h e ave ra g e d u rat i o n t a rg e t
o f 2 4 m o nths.
29–30.
I n addition to the 9- and 18-month repor ts,
there is continuous super vision of durat i o n by l ine management.
On a monthly basis, statistics are produced
for management drawing attention to
longer cases. These are regular ly discussed
at D i re c tors’ meetings.
R e g a rd i n g t h e ro l e o f t h e B o a rd, s e e re p l y
to p a ra graph 21.
Th e re v i s e d p ro p o s a l to a m e n d R e g u l at i o n
1 0 7 3 / 1 9 9 9 w i l l fo re s e e re i n fo rce d co nt ro l s
of the duration of investigations, including
i n fo r m i n g t h e S u p e r v i s o r y Co m m i t te e i n a
t i m e l y m anner.
31.
Even though the number of cases per
i nv e s t i g a t o r i n I nv e s t i g a t i o n s a n d O p e r a tions Directorates may have decreased,
the amount of incoming information
n e e d i n g to b e e v a l u a te d h a s co n s i d e ra b l y
increased, which has a significant impact
o n t h e overall wor k load of investigators.
D u e to O L A F’s p o l i c y to fo c u s o n t h e m o re
ser ious cases, their duration tends to be in
line with their increased complexit y.
O L A F i s f u l l y co m m i t te d to co nt ro l l i n g t h e
duration of cases through their efficient
management. S ee also reply to paragraphs
29–30.
32.
As already mentioned, the volume of
incoming information has increased considerably and OLAF intends to put in place
a p ro ce d u re fo r a m o re e f f i c i e nt a n d a cc u r a te p ro ce s s i n g o f t h e i n fo r m a t i o n d u r i n g
t h e e va l u at i o n p e r i o d. Th i s w i l l i n c l u d e a n
upstream filter ing and where necessar y an
analysis of infor mation.
33.
In many cases where initial information
n e e d s to b e ve r i f i e d w i t h e x te r n a l b o d i e s,
M e m b e r S t a te s a n d t h i rd co u n t r y a u t h o r i ties, OLAF depends on its external par tners to respond in a timely manner and
relies upon their goodwill and cooperation. Although OLAF is investing heavily in
i m p r o v i n g t h e s e re l a t i o n s h i p s i n o r d e r t o
r e d u c e d e l a y s i n c o m m u n i c a t i o n o f i n fo rm a t i o n , t h i s r e m a i n s a f a c t o r l a r g e l y o u tside its control.
The two- and six-month guidelines for
a s s e s s m e n t s h a ve b e e n s e t b y O L A F i t s e l f
for work monitoring purposes. They are
not regulator y deadlines as such. Moreove r, t h e p ro g re s s i ve a p p l i c a t i o n o f t h e d e
minimis guidelines (as laid down in an
annex to the OLAF Manual) should facilitate progress in reducing assessment dura tion in the medium to longer ter m.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
49
REPLY OF THE
COMMISSION
35.
OLAF has made considerable progress in
ensuring that data subjects are informed
of its investigations, in accordance with
Regulation (EC) No 45/2001. This was
a c h i e ve d i n a t ra n s p a re n t w ay fo l l ow i n g a
p l a n a g r e e d w i t h t h e E u r o p e a n D a t a Pr o te c t i o n S u p e r v i s o r ( E D P S ) . O L A F h a s co m p l e te d a d a t a p ro te c t i o n b a c k l o g e xe rc i s e
covering specified groups of investigations
that were opened prior to the existence
of the data protection module, therefore
the five outstanding cases have been dealt
w i t h a ccordingly.
Although the EDPS was consulted on all
t h e a s p e c t s re fe r re d to by t h e Co u r t i n t h e
co ntex t of the pr ior checks on OLAF investigations and follow-up, OLAF is willing
to consult the EDPS again on the specific
i s s u e ra i sed.
37.
As of 1 Januar y 2011, OLAF has achieved
its goal and reduced the number of its
te m p o ra r y agents to 21 %.
39.
It is envisaged that the proposal for the
r e fo r m o f R e g u l a t i o n 1 0 7 3 / 1 9 9 9 w i l l c o n solidate the rights of the individual conce r n e d a n d m a k e t h e m m o re v i s i b l e. Ad d it i o n a l l y, i t w i l l i n t r o d u c e a n i n d e p e n d e n t
r e v i e w m e c h a n i s m / p r o c e d u r e fo r d e a l i n g
w i t h c o m p l a i n t s by p e r s o n s c o n c e r n e d by
investigations, who consider that their
procedural r ights have not been respec ted
by O L A F.
The Commission considers that, even
under the existing legal framework, the
rights of individuals concerned are protected and that an independent control
of investigative acts exists, to which the
case law of the Cour t of Justice has been
i n c r e a s i n g l y c o n t r i b u t i n g s i n c e t h e Co u r t
made its statement in 2005. Even though it
considers that OLAF’s investigative ac tions
( i n c l u d i n g t h e Fi n a l C a s e R e p o r t s ) c a n n o t
b e c h a l l e n g e d f o r a n n u l m e n t 4, t h e C o u r t
of Justice contributes to an independent
co nt ro l n o t a b l y o f t h e s e by m e a n s o f p o s s i b l e a c t i o n s fo r d a m a g e s 5 . Ev i d e n ce m u s t
be collected in a lawful manner in order
to e n s u re t h at n at i o n a l a d m i n i s t rat i ve a n d
judicial authorities can make use of it in
their respective procedures. The same is
v a l i d fo r a d m i n i s t ra t i ve a n d re cove r y p ro ce d u re s to b e i n i t i ate d by t h e a u t h o r i s i n g
officers. I n addition to this, the OLAF M anual provides clear internal guidelines for
investigators concerning the conducting
of an investigation.
41.
OLAF has no powers to force its par tners
to reac t in a timely manner and relies upon
t h e i r g o o d w i l l a n d co o p e r a t i o n . A l t h o u g h
OLAF is investing heavily in improving
these relationships, this remains a factor
largely outside its control.
4
Refer to cases T-193/04 Tillack v. Commission dated 4 October
2006 and T-261/09P Violetti et Schmit dated 20 May 2010.
5
Refer to cases T-48/05 Franchet et Byk v. Commission dated 8 July
2008 and F-5/07 and 7/05 Violetti v. Commission dated 28 April
2009 and F-72/06 Verheyden v. Commission dated 28 April 2009.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
50
REPLY OF THE
COMMISSION
Wi t h r e g a r d t o c o o p e r a t i o n w i t h M e m b e r
States in the field of direct expenditure,
steps towards solving this problem have
a l re a d y b e e n t a k e n by t h e Co m m i s s i o n . I n
2 0 0 9 , a s p a r t o f t h e q u e s t i o n n a i re fo r t h e
2008 Annual Commission Report on the
p r o t e c t i o n o f t h e E U ’s f i n a n c i a l i n t e r e s t s
- f i g h t a g a i n s t f r a u d, m o s t M e m b e r S t a te s
co m m u n i c ate d to O L A F t h e co m p l e te co n tact details of national authorities for
all expenditure fields, including direct
expenditure, thus enabling OLAF investig ato r s to i d e nt i f y a n d co nt a c t t h e co m p e tent authority in good time of the check.
OLAF will remain in close contact with
M e m b e r S t a t e s fo r t h e c o n t i n u o u s u p d a t ing of this infor mation. I n the 2009 repor t,
t h e Co m m i s s i o n s t r o n g l y r e c o m m e n d s a l l
M ember States to set up national and judi c i a l a u t h o r i t i e s w i t h c o m p e t e n c e s fo r t h e
field of direct expenditure, as the same
level of protection of financial interests
must be ensured for all areas of the EU
b u d g e t . I t i s e nv i s a g e d t h a t t h e re fo r m e d
R e g u l at i o n 1 0 7 3 / 1 9 9 9 a d d re s s e s t h i s i s s u e
by proposing an Anti-fraud Coordination
S e r v i ce (AFCOS) for each M ember State.
43.
The Practical Agreement provides for a
framework for the respective cooperation. There is a common understanding
b e t we e n O L A F a n d Eu ro j u s t t h a t , i n o rd e r
to ensure sound management, the text is
n o t i n p ra c t i ce i nte r p re te d i n a l i te ra l way
but cooperation is focused on complex
and sensitive criminal cases, and where
i t b r i n g s a d d e d v a l u e. T h i s c o o p e r a t i o n i s
handled by the OLAF-Eurojust liaison team
w h i c h m e e t s re g u l a r l y. Ad d i t i o n a l l y, O L A F
and Eurojust organise regular exchange
v i s i t s to f u r t h e r i m p rove u n d e r s t a n d i n g o f
t h e i r re s pec tive tasks.
44.
Th e Co m m i s s i o n i s p ay i n g c l o s e a t t e n t i o n
to the possibilities offered by the Lisbon
Treat y in ter ms of the fur ther development
of Eurojust and the setting up of a European Public Prosecutor ’s O ffice (EPPO). The
Commission is planning to issue a Commu nication on the establishment of an EPPO
from Eurojust and to further reflect on
the cooperation with all actors involved,
i n c l u d i n g O L A F. O L A F i s f u l l y awa re o f t h i s
perspec tive and will fur ther improve coop e r a t i o n . I t i s e nv i s a g e d t h a t t h e re fo r m e d
Regulation 1073/1999 will lay down rules
for closer cooperation between Eurojust
a n d O L A F. I t w i l l p r o v i d e a l e g a l b a s i s fo r
OLAF to conclude cooperation arrangem e nt s w i t h b o t h Eu ro p o l a n d Eu ro j u s t. An
i n fo r m a t i o n e xc h a n g e b e t w e e n O L A F a n d
Eu ro j u s t w i l l b e re i n fo rce d i n t h e n e w p ro posal.
S ee also reply to paragraph 43.
48.
O L A F m a k e s e ve r y p o s s i b l e e f fo r t to e v a l uate and quantify the financial impact
o f f r a u d u l e n t a c t i v i t y. N e v e r t h e l e s s , t h e
amounts to be recovered are not always
possible to quantify at the outset and
therefore the potential financial impact
cannot always be considered as a clear
‘objec tive’ for an investigation.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
51
REPLY OF THE
COMMISSION
The effectiveness of OLAF investigations
cannot be assessed simply in financial
ter ms. OLAF gathers evidence both against
and in favour of persons concerned, so a
conclusion that a person concerned does
not have a case to answer is also to be
c o n s i d e r e d a p o s i t i v e r e s u l t . A l s o, a c a s e
which has limited immediate financial
impact may have substantial longer term
financial implications once lessons learnt
have been reflected in improved proced u re s.
51.
Indeed, OLAF fulfils its role to optimise conditions for follow-up. I n many
i n s t a n c e s , w i t h o u t O L A F ’s a s s i s t a n c e, fo l l ow- u p would not have been successful.
52.
Ta b l e 5 i n t h e E C A re p o r t c o m p a re s i n t e r n a l i n fo r m at i o n ava i l a b l e fo r m a n a g e m e nt
pur poses and annual repor ts. M anagement
infor mation is necessar ily more detailed to
enable managers to carry out their function. OLAF agrees that the public should
have access to comparable information
o ve r t i m e, i n o rd e r t o g i ve re s u l t s g re a t e r
visibilit y, but reser ves the r ight to produce
more detailed information for managem e nt p u r poses only.
56.–57.
The Commission appreciates the idea of
fur ther improving OLAF’s repor ting, allowing for reliable compar isons over time.
The proposal will be carefully examined.
H owe ve r, d i f f i c u l t te c h n i c a l i s s u e s h ave to
be taken into account and resolved, in par t i c u l a r w i t h re s p e c t to t i m e l a g s a n d q u a l it y of data.
60.
T h e Co m m i s s i o n a g r e e s w i t h t h e f i n d i n g s
o f t h e Co u r t . I t s h o u l d a l s o b e n o t e d t h a t
the relations bet ween OLAF and the Supervisor y Committee have become much more
fruitful since the previous audit.
63.
The rights of individuals concerned are
already protected in the existing legal
framework. Any formal procedure on the
par t of OLAF or the Super visor y Committe e fo r a n i n te r ve n t i o n o f t h e S u p e r v i s o r y
Committee on this issue in ongoing indiv i d u a l c a s e s c o u l d b e s e e n a s a n i n t e r fe r e n ce w i t h t h e i nve s t i g at i ve i n d e p e n d e n ce
of the OLAF Direc tor.
53.
O L A F w i l l ex a m i n e h ow to f u r t h e r i m p rove
i t s a n n u a l o p e rat i o n a l re p o r t, w h e re i t h a s
a certain leeway as opposed to its other
re p o r t s.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
52
REPLY OF THE
COMMISSION
CONCLUSIONS AND RECOMMENDATIONS
64.
As regards the question whether the
Super visor y Committee has to be infor med
when OLAF transmits information to
national judicial author ities in cases which
are already dealt with by the national judicial authorities, no definitive answer to
this question is to be found in Ar t. 11(7)
of Regulation 1073/1999. The provision
c o u l d b e i n t e r p re t e d s t r i c t l y, l i m i t e d o n l y
to internal cases, or in a broader sense.
OLAF is willing to apply an ex tensive inter p re t a t i o n , i . e. i n c l u d i n g e x te r n a l c a s e s, a s
t h i s wo u l d f a c i l i t a t e t h e m o n i t o r i n g wo r k
o f t h e S u per visor y Committee. Concer ning
a l re a d y o n g o i n g c r i m i n a l c a s e s at n at i o n a l
level, OLAF considers it appropriate to
i n fo r m t h e Co m m i t te e o f t h e s e c a s e s i f a n
ex ter nal or inter nal investigation has been
o p e n e d a n d i nve s t i g a t i ve a c t i o n t a k e n b y
O L A F.
67.
The Commission reiterates its opinion that
OLAF should continue to contr ibute to the
establishment of its anti-fraud policy and
s t rate g y. O L A F’s p o l i c y wo r k b e n e f i t s f ro m
its investigative exper ience and vice versa.
OLAF has already adapted its practice
a cco rd i n g to this inter pretation.
68.
T h e C o m m i s s i o n a p p r e c i a t e s t h e C o u r t ’s
f i n d i n g s t h a t O L A F i s m a k i n g m o re u s e o f
its investigative powers.
65.
Wi t h t h e D e c i s i o n o f t h e E u ro p e a n Pa r l i a ment, the Council and the Commission
o f 1 5 Fe b r u a r y 2 0 1 1 , t h e m a n d a t e o f t h e
present Super visor y Committee Members
w i l l b e ex tended until 30 November 2011.
The 34 % figure in isolation does not
reflect the propor tion of OLAF resources
devoted to investigation. In terms of
s t a f f a l l o c a t i o n to i nve s t i g a t i ve a c t i v i t i e s,
nearly 75 % are involved in operational
c a s e wo r k , i . e. i n c l u d i n g p rov i d i n g s u p p o r t
to i nve s t i g at i o n s. Th e s p l i t by d i re c to rate s
does not thus reflect the proportion of
staff involved in investigations.
Even though the figure of 37 % is generated from the TMS, it does not entirely
re f l e c t t h e re a l s i t u at i o n . S e e a l s o re p l y to
paragraph 11.
Concer ning strategic intelligence, its main
concern is to understand the patterns of
fraud and to identify (sectoral and other)
risks which support operational activities
and fraud prevention.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
53
REPLY OF THE
COMMISSION
I n a d d i t i o n t o t h e a s s i s t a n c e O L A F ’s s t r a tegic intelligence offers to M ember States,
O L A F co nt r i b u te s s i gn i f i c a nt l y to t h e a nt i f ra u d p o l i c y o f t h e Co m m i s s i o n . Fo r ex a mple, OLAF has issued specific recommendations to several Commission services
t o i m p ro ve f r a u d p re ve n t i o n fo l l o w i n g a n
a n a l ys i s of its operational cases.
Fo l l ow- up recommendation 1
This recommendation is par tially accepted.
Th e s p e e d o f i nve s t i g at i o n s i s a n a re a t h at
could be fur ther improved (see also replies
t o p a r a g r a p h s 2 7 – 2 9 ) . H o w e v e r, a s O L A F
is committed to dealing with the more
serious cases and is progressively applying financial thresholds when deciding
whether or not to open a case, increased
t i m e s p e nt o n i nve s t i g at i o n s m ay n o t n e c essarily imply an increase in the number
of investigations. M oreover, the number of
c a s e s i s n o t t h e o n l y i n d i c ato r by w h i c h to
j u d g e O L AF’s per for mance.
OLAF will make ever y effor t to increase the
e f f i c i e n c y a n d e f fe c t i ve n e s s o f i t s i nve s t i gative work, which remains its core task.
Fu r t h e r m o re, O L A F w i l l l o o k i n t o t h e p o s s i b i l i t y o f i n c re a s i n g t h e p ro p o r t i o n o f i t s
t i m e s p e nt on its investigative func tion.
Fo l l ow- up recommendation 2
Th i s re commendation is accepted.
71.
The Commission is of the view that OLAF
h a s m a d e co n s i d e ra b l e p ro gre s s s i n ce t h e
audit of 2005, in par ticular :
Ū Ū From 2005 until the introduc tion of the
4th edition of the M anual in D ecember
2 0 0 9 , t h e p re v i o u s ve r s i o n o f t h e M a n u a l s e r ve d a s a va l u a b l e to o l fo r i nve s tigators;
Ū Ū Cooperation with Eurojust has improved
based on the agreement which entered
into force in 2008 (see reply to paragraph 43);
ŪŪ The CMS, (and not the TMS,) was de s i g n e d a s a t o o l fo r c a s e m a n a g e m e n t
and fur ther developed;
ŪŪ The duration of investigations has re mained stable in recent years even
though cases have become more serious
a n d c o m p l e x . H o w e v e r, f u r t h e r e f fo r t s
w i l l b e m a d e t o i m p r o v e i nv e s t i g a t i o n
planning and therefore contribute to re ducing the duration of cases (see reply
to paragraph 23).
Changes to improve the legal framework
are underway and expected by the end
of 2011. These will consolidate the rights
o f p e r s o n s c o n c e r n e d b y a n i nve s t i g a t i o n
and make them more visible. They will also
comprise provisions on a review proce dure and on cooperation with Eurojust and
Europol.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
54
REPLY OF THE
COMMISSION
Fo l l ow- up recommendation 3
This recommendation is par tially accepted.
The reform of Regulation 1073/1999, which
i s c u r r e n t l y u n d e r w a y, a l r e a d y a d d r e s s e s
t h e i s s u e o f O L A F ’s co m p e te n ce s a n d p ro cedures. It will also consolidate relations
between OLAF and the Member States’
c o m p e t e n t a u t h o r i t i e s . Fu r t h e r m o r e , t h e
reform foresees that Member States will
designate an authority to ensure good
co o p e rat ion with OLAF.
The Commission is generally in favour of
a n o ve r a l l c o n s o l i d a t i o n o f t h e a n t i - f r a u d
l e g i s l a t i o n . H o w e v e r, g i v e n t h a t t h i s i s
a ver y complex issue involving different
pieces of legislation, it is not envisaged
i n t h e f ramewor k of the ongoing refor m of
R egulation 1073/1999, but is considered as
a l o n g e r ter m objec tive.
Fo l l ow- up recommendation 4
This recommendation is par tially accepted.
Th e co o p e r a t i o n b e t we e n O L A F a n d Eu ro j u s t h a s d e ve l o p e d co n s i d e ra b l y i n re ce n t
years, based on the new Eurojust Decision and the Practical Agreement on the
Ar ra n g e ment of Cooperation with Eurojust
o f S e p te m b e r 2 0 0 8 . Th e exc h a n g e o f c a s e related information and the follow-up of
ongoing cases have been facilitated and
n ow o cc ur on a more regular basis.
O L A F h a s a l re a d y p u t i n p l a c e p ro c e d u re s
regarding the transmission of informat i o n re g a rd i n g re l e va nt c a s e s to Eu ro j u s t 6 .
Fu r t h e r m o r e , i n 2 0 1 1 a n e w s e c u r e i n f o r m a t i o n e xc h a n g e s y s t e m w i l l b e i n s t a l l e d
in order to fur ther facilitate information
exc h a n g e.
6
I t is envisaged that the revised proposal to
amend R egulation 1073/1999 will compr ise
provisions on cooperation with Eurojust,
taking into consideration the respective
scopes of competence of OLAF and Euro just.
Follow-up recommendation 5
This recommendation is accepted.
OLAF already uses initial workplans and
is committed to develop these fur ther in
order to improve its planning system.
T h e s e wo r k p l a n s a re re v i s e d w h e n n e c e s sary in the course of the continuous dial o g u e b e t we e n i nve s t i g ato r s a n d m a n a g e ment.
D epending on the different t ypes of investigation, monitoring may take different
fo r m s. H o we ve r, i n a l l c a s e s, b o t h t h e i n i tial workplan and its updates are already
registered in the CMS in the form of
repor ts or notes.
OLAF will wor k on fur ther improvements in
ter ms of investigation planning:
Ū Ū O L A F w i ll e n s u re t h at i n i t i a l wo r k pl a n s
always include the objec tives and scope
of the investigation, and the estimated
financial impac t. I f it is possible at such
an early stage, the plans will also inc l u d e e s t i m a t e s o f re s o u rc e s re q u i re d,
possible missions and a likely timeframe.
ŪŪ O L A F i s co m m i t te d to i m p rov i n g t h e
m o n i to r i n g a n d u p d at i n g o f wo r k p l a n s
on a regular basis.
The transmission of information on cases to Eurojust has
increased compared to 2008 and 2009. In 2010 OLAF has already
transmitted four cases to Eurojust; Eurojust has transmitted one
case to OLAF.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
55
REPLY OF THE
COMMISSION
Fo l l ow- up recommendation 6
This recommendation is par tially accepted.
Monitoring long and complex investigat i o n s s h ould be fur ther improved.
Within the existing governance frame work, the Board delivers recommendations on fundamental decisions relating to
the treatment of cases. But it is the role
of line management to examine investig a t i o n p l a n s r e g u l a r l y, g u i d e t h e i r d e v e l opment and take decisions in order to
re s p e c t t i m e f r a m e s a n d s p e e d u p i nve s t i g at i o n s wherever possible.
OLAF is of the opinion that an involvement
of the Board in the monitoring process
would be likely to result in a dilution of
re s p o n s i bilit y of OLAF’s line manag ement.
The duration of investigations is indeed
a key per formance indicator in terms of
O L A F’s o perational procedures. I t is recogn i s e d a s s u c h i n O L A F ’s AM P. O n t h e o t h e r
hand, targets need to be realistic and
h ave to re f l e c t a c t u a l o p e r a t i o n a l c i rc u m s t a n ce s.
OLAF is alert as regards the duration of
cases and is committed to continue monitoring developments in this field and to
reduce duration wherever possible. See
a l s o re p l ies to paragraphs 27–29.
73.
OLAF makes ever y possible effor t to evaluate and quantify the financial impact of
f ra u d u l e nt a c t i v i t y, b u t t h e a m o u nt s to b e
recovered are not always possible to quant i f y a t t h e o u t s e t . Fi n a n c i a l i m p l i c a t i o n s
are taken into account for reasons of pr ioritisation, rather than ser ving as ‘objec tives’
as such. S ee also reply to ­p aragraph 48.
74.
The spending Commission DirectoratesGeneral (DGs) (as authorising DGs) and
M ember States’ ser vices are responsible for
f i n a n c i a l r e c o v e r y o n t h e b a s i s o f O L A F ’s
findings. Therefore, the amounts recovered
a re o n l y a n i n d i c ato r i n a b ro a d e r co ntex t,
i.e. with regard to stakeholders and, in
p a r t i c u l a r, t h e s p e n d i n g Co m m i s s i o n D G s
and M ember States.
Follow-up recommendation 7
This recommendation is par tially accepted.
OLAF already sets objectives for investigations and updates them regularly
via workplans. OLAF agrees that some
improvements could be made to the curr e n t a r r a n g e m e n t s . H o w e v e r, s u b s t a n t i a l
changes are not required.
O L A F ’s o b j e c t i v e i s t o g a t h e r e v i d e n c e
both for and against and to identify
amounts for recover y as accurately as possible.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
56
REPLY OF THE
COMMISSION
Fo l l ow- up recommendation 8
This recommendation is par tially accepted.
T h e C M S s h o u l d b e f u r t h e r d e v e l o p e d fo r
these pur poses. However, there will always
be factors outside the CMS to be taken
into account. OLAF will examine the possibilities for fur ther improvement in its
repor ting, including in relation to compar i s o n s over time.
75.
The role of the Super visor y Committee will
b e f u r t h e r c l a r i f i e d by t h e re fo r m o f R e g ul at i o n 1 0 73/1999.
76.
The new procedure of informing the
Super visor y Committee before transmitt i n g a c a s e to n at i o n a l j u d i c i a l a u t h o r i t i e s
entered into force with the 4th edition
of the OLAF Manual in December 2009.
The Super visor y Committee is informed
five working days before the transmission of information to national judicial
authorities. OLAF will take any advice of
the Super visor y Committee into account
and react on a case -by-case basis. Any
formal procedure on the par t of OLAF or
t h e S u p e r v i s o r y Co m m i t te e co u l d b e s e e n
as an inter ference with the investigative
independence of the OLAF Director conce r n i n g o n g o i n g i nve s t i g at i o n s, a s a n e l e m e nt o f h i s i n d e p e n d e n ce i n c l u d e s d e c i ding whether and when a case shall be
transmitted to national judicial authorities. Concerning the protection of the
rights of persons being investigated, see
re p l y to paragraph 39.
Follow-up recommendation 9
The first sentence regarding the Supervisory Committee is rejected. Any form a l p ro c e d u re o n t h e p a r t o f O L A F o r t h e
Supervisory Committee could be seen
as an inter ference with the investigative
i n d e p e n d e n c e o f t h e O L A F D i r e c t o r. T h e
second sentence is partially accepted.
The proposal for the reform of Regulat i o n 1 0 7 3 / 1 9 9 9 w i l l co n s o l i d ate t h e r i g ht s
of individuals concerned and make them
more visible.
The rights of individuals concerned are
already protected in the existing legal
framework. Even though it does not
c o n s i d e r O L A F ’s i n v e s t i g a t i v e a c t i o n s
(including the Final Case Repor ts) as
a c t s a d v e r s e l y a f fe c t i n g t h e p e r s o n s c o n cerned 7 , the Cour t of Justice contributes to
a n i n d e p e n d e n t co n t ro l o f t h e s e. S e e a l s o
reply to paragraph 39.
A d d i t i o n a l l y, t h e O L A F M a n u a l p r o v i d e s
c l e a r i n t e r n a l g u i d e l i n e s fo r i nve s t i g a t o r s
concer ning the conduc t of investigations.
7
Refer to cases T-193/04 Tillack v. Commission dated 4 October
2006 and T-261/09P Violetti et Schmit dated 20 May 2010.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
57
REPLY OF THE
OLAF SUPERVISORY
COMMIT TEE
The Supervisory Committee takes note
of the obser vations of the Cour t of Audito r s i n t h e fo l l ow- u p o f t h e S p e c i a l R e p o r t
1/2005 concerning the management of
t h e Eu ro p e a n A nt i - f ra u d O f f i ce a n d wo u l d
m a k e t h e following responses:
1 . Th e role of the Sup er visor y
Co m m i t tee following the Fra nchet a nd
By k ru l i ng (paragraphs 58–63 and 75–76
o f t h e Cour t of Auditors obser vations)
( a ) Ac t i o n to b e taken by the SC where
f u n d a m e ntal rights a nd pro ce dural
g ua ra n te es a re at stake (pa ragra phs
5 8 – 6 3 , 7 5–76 a nd first pa r t of the
f o l l ow- u p re commendation 9)
Cu r re nt situation
Cu r re nt l y, O L A F fo r wa rd s t h e c a s e re p o r t s
t o t h e S C f i v e w o r k i n g d a y s b e fo r e t r a n s mission to national judicial authorities
(NJA). These case repor ts are accompanied
by a special repor t detailing its handling
o f f u n d a mental r ights.
Following examination of these repor ts the
SC may request, where appropr iate, access
to t h e e nt i re f i l e. Th e S C t h e n a r ra n g e s fo r
a discussion on substantive and procedural
aspec ts of cases with OLAF staff who regu l a r l y p a r t i c i p a te i n t h e S C ’s p l e n a r y m e e t ings. This discussion is focused, in par ticu l a r, o n re s p e c t fo r f u n d a m e nt a l r i g ht s a n d
p ro ce d u ral guarantees of the persons con cerned in the investigation. The SC pays
p a r t i c u l a r at te nt i o n to t h e d u rat i o n o f t h e
i nve s t i g a t i o n a n d t o t h e q u e s t i o n o f t i m e
b a r r i n g.
Position of the SC
The SC considers that respect for fundam e n t a l r i g h t s i s b o t h a s a fe g u a rd fo r p e r sons under investigation and a criterion
f o r a s s e s s i n g t h e e f f e c t i v e n e s s o f O L A F ’s
investigations. The SC is aware and conf i r m s t h at i t s h a l l n o t i nte r fe re i n t h e co n duct of ongoing investigations, as stipulated by Regulation No 1073/99. That is
w hy, i n o r d e r t o f u l f i l i t s r o l e o f a s s i s t i n g
t h e D i re c t o r G e n e r a l o f O L A F i n d i s c h a rg i n g h i s r e s p o n s i b i l i t i e s 1, t h e S C c a n , a n d
d o e s, d r aw g e n e r a l o b s e r v a t i o n s f ro m t h e
analysis of an individual case with a view
t o i m p r o v i n g O L A F ’s p r a c t i c e s i n f u t u r e
i n v e s t i g a t i o n s . H o w e v e r, t h e S C s h a l l n o t
give direc tions or recommendations to the
Director-General of OLAF on the subse quent course of the individual investigation.
The SC can also be consulted by the Direc tor- G eneral of OLAF on a specific case.
The SC is currently working to adapt its
rules of procedure to formally take into
account the ruling of the Cour t of First
I nstance in the Franchet and B yk case.
Th e S C co n s i d e r s i n p a r t i c u l a r, t h at b e fo re
t h e i n fo r m a t i o n i s s e n t t o N J A s , i t s h o u l d
be entitled to request access to relevant
c a s e f i l e s to a s ce r t a i n w h e t h e r f u n d a m e ntal rights and procedural guarantees are
being complied with. The SC secretariat
s h a l l b e a f fo rd e d a cce s s to t h e d o c u m e nt s
within a time limit sufficient to guarant e e c o m p l i a n c e w i t h t h i s f u n c t i o n . Co r r e sponding working arrangements shall be
agreed with OLAF.
1
The ECA’s Special Report No 1/2005 concluded that ‘the
Supervisory Committee does not provide the Office’s Director with
all necessary support’ (see paragraph 93).
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
58
REPLY OF THE
OLAF SUPERVISORY
COMMIT TEE
In conformity with the current practice,
the SC may also appoint a rapporteur to
ex a m i n e t h e c a s e s a n d p a r t i c i p ate i n t h e i r
p r e s e n t a t i o n a t t h e C o m m i t t e e’s p l e n a r y
s e s s i o n . The management of OLAF shall be
i nv i te d to this session.
I f n e ce s s ar y, the SC can issue an opinion.
( b ) Le ga l fra mework prote c ting the
p e r s o n s b eing investigate d (pa ragra ph
7 6 a n d s e cond pa r t of the follow-up
re co m m endation 9)
The reform of Regulation No 1073/1999
is ongoing and the SC contributed to the
d e b ate by s u b m i t t i n g t wo o p i n i o n s : O p i n ion No 3/2010 on the Reflec tion Paper
o n t h e re fo r m o f t h e E u ro p e a n A n t i - f r a u d
Office and Opinion No 5/2010 on fundamental rights and procedural guarantees
within OLAF’s investigations. The SC would
w e l c o m e a ny i m p r o v e m e n t i n t h e l e g i s l a tion designed to clarify and strengthen
O L A F ’s p o w e r s o f i n v e s t i g a t i o n a n d t h e
procedural guarantees applicable to
O L A F’s i nvestigations.
2 . S co p e of OL AF’s obligation to
co m m u n ic ate c ases to the Sup er visor y
Co m m i t tee prior to their transmission
to N J As (paragraph 64)
Th e Eu ro p e a n Co u r t o f Au d i to r s n o te s t h at
in 2009, the SC was not informed about
n i n e c a s e s w h i c h h a d b e e n t ra n s m i t te d to
N J As. Th e re a s o n fo r n o t i n fo r m i n g t h e S C
was that these cases were already being
dealt with by the NJAs at the time of transm i s s i o n of the infor mation by OLAF.
Th e S C co n s i d e r s t h at i t m u s t b e i n fo r m e d
of transmission of information to NJAs
both in internal and external investigations. In addition to cases where OLAF
t r a n s m i t s i n fo r m a t i o n t o N J A s i n o r d e r t o
initiate judicial proceedings, OLAF shall
inform the SC when transmission occurs
i n c a s e s a l r e a d y p e n d i n g b e fo r e t h e N J A s
w h e n c a s e s a r e o p e n e d a n d i nv e s t i g a t i v e
a c t i o n i s t a k e n b y O L A F. T h i s o b l i g a t i o n
d o e s n o t a p p l y i f O L A F t ra n s m i t s i n fo r m ation to national administrative author ities.
3. The term of office of the Sup er visor y
Committee’s M emb ers (paragraph 65)
Th e M e m b e r s o f t h e c u r re nt S C to o k o f f i ce
on 30 November 2005, on a three year
mandate, renewable once. On expir y of
t h e i r te r m o f o f f i ce o n 2 9 N ove m b e r 2 0 0 8 ,
t h e y re m a i n e d i n o f f i ce, a cco rd i n g to Ar t i cle 11 (4) of Regulation No 1073/1999,
s i n c e t h e y we re n o t re n e we d o r re p l a c e d.
The procedure for the renewal of their
appointment by common accord of the
Eu ro p e a n Pa r l i a m e n t , t h e Co u n c i l a n d t h e
Commission was at its final stage at the
time this response was draf ted.
The SC agrees with the ECA that the SC
must have a for mal mandate from all three
institutions. The SC regrets the lack of
alacrity on the part of the institutions in
c o n c l u d i n g t h i s m a t t e r, s i n c e t h e e n d o f
the SC ’s first ter m of office. D espite a long
p e r i o d o f u n c e r t a i n t y, t h e S C h a s c o n t i n u e d to f u l l y p e r fo r m i t s t a s k o f re i n fo rc i n g
O L A F ’s i n d e p e n d e n c e by re g u l a r m o n i t o ri n g o f t h e i m p l e m e n t a t i o n o f t h e i nv e s t i gative func tion.
T h e S C a g re e s w i t h t h e E C A t h a t t h e o b l i g at i o n to i n fo r m t h e S C o f c a s e s t ra n s m i tted to the NJAs is unconditional and leaves
n o m a rgi n for discretion 2 .
2
See Franchet and Byk judgement, § 170.
Special Report No 2/2011 — Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
European Court of Auditors
Special Report No 2/2011
Follow-up of special report no 1/2005 concerning the management of the European Anti-Fraud Office
Luxembourg: Publications Office of the European Union
2011 — 58 pp. — 21 × 29,7 cm
ISBN 978-92-9237-115-9
doi:10.2865/7996
How to obtain EU publications
Free publications:
•
via EU Bookshop (http://bookshop.europa.eu);
•
at the European Union’s representations or delegations. You can obtain their contact details
on the Internet (http://ec.europa.eu) or by sending a fax to +352 2929-42758.
Priced publications:
•
via EU Bookshop (http://bookshop.europa.eu).
Priced subscriptions (e.g. annual series of the Official Journal of the European Union and
reports of cases before the Court of Justice of the European Union):
•
via one of the sales agents of the Publications Office of the European Union
(http://publications.europa.eu/others/agents/index_en.htm).
QJ-AB-11-003-EN-C
THE EUROPEAN ANTI-FRAUD OFFICE (OLAF) PROVIDES AN INDEPENDENT
INVESTIGATION SERVICE IN THE FIGHT AGAINST FRAUD AND OTHER ILLEGAL
ACTIVITIES DETRIMENTAL TO THE EU BUDGET. IN 2005 OLAF WAS THE SUBJECT
OF A SPECIAL REPORT BY THE EUROPEAN COURT OF AUDITORS WHICH MADE A
NUMBER OF RECOMMENDATIONS TO MAKE ITS INVESTIGATIVE FUNCTION MORE
EFFICIENT AND EFFECTIVE. THIS FOLLOW-UP REPORT EXAMINES WHETHER THE
ORIGINAL RECOMMENDATIONS HAVE BEEN IMPLEMENTED AND RECOMMENDS
FURTHER MEASURES WHICH COULD HELP OLAF IMPROVE THE EFFICIENCY AND
EFFECTIVENESS OF ITS INVESTIGATIONS.
EUROPEAN COURT OF AUDITORS