‘See Sicily’: the mismanagement of EU funds in Sicily and the risk of funding withdrawal

Subject: ‘See Sicily’: the mismanagement of EU funds in Sicily and the risk of funding withdrawal

On 20 February 2023, Sicily Region’s Audit Authority (AdA) published a final report1on the ‘See Sicily’ project, which was allocated EUR 74.9 million in funding under Action 6.8.3 of the European Regional Development Fund’s (ERDF) 2014-2020 Regional Operational Programme (ROP) for Sicily. The report revealed alarming irregularities.

Spending on promotional activities alone increased almost five-fold, soaring from the EUR 4.9 million budgeted in 2020 to EUR 23.9 million in 2022.

Major compliance issues include: the failure to map out the project and plan its services, the lack of specific targets or a cost breakdown for individual activities, and the project’s non-compliance with the Procurement Code.

The audit found an error rate of 25% for certified expenditure on promotional activities.

What is more, given the project’s poor performance and the irregularities revealed in the audit, the AdA cannot rule out the possibility – pending further examination and the application of a financial correction of 25% – that See Sicily’s promotional campaign was wholly financed through direct awards.

If confirmed, this error rate could result in around EUR 1 billion being withdrawn from ROP Sicily ERDF 2014-2020.

In view of this:

1. Has the Commission taken up the issues raised by the audit with the Sicilian authorities?

2. Can it clarify whether withdrawn funds can be recovered?

3. Can it provide information on the state of implementation, spending and certification in relation to ROP Sicily ERDF 2014-2020?

Submitted: 14.4.2023

1 Final report on the audit of operations (Article 127(1) of Regulation (EU) No 1303/2013 – Procurement of

goods and services – Phase II.

Answer given by Ms Ferreira on behalf of the European Commission

(24 May 2023)

1. The Commission has been aware of the case raised in the Annual Control Report by the Sicilian audit authority. The operations ‘SeeSicily 2020 Pernottamenti SI_1_26072’ and ‘SI_1_27421’ (for a total amount of EUR 2 813 259) have been audited by the audit authority. Financial corrections amounting to EUR 735 089.25 (25% of the total amount of the two concerned operations) have been applied by the national authorities. The Commission has requested further information to the Sicilian managing authorities in order to carry out additional verifications.

2. Pursuant to Article 83(1)(b) of Regulation (EU) No 1303/2013 (2), the Commission may interrupt the payment deadline of any future payments claimed under the programme in question, including the payment of the balance following the annual clearance of accounts, until the issues referred to above are resolved and sufficient assurance on the legality and regularity of the expenditure for the programme in question is received. Irregular expenditure already reimbursed can always be recovered.

3. Taking into account the most recent monitoring information available, the overall amount for Sicily European Regional Development Fund Regional Operational Program (ROP) 14-20 is of EUR 4 273 038 791. Payments to beneficiaries are at EUR 2 914 512 878 and certified expenses at EUR 2 181 761 599. The Commission is concerned by the state of the implementation of the ROP Sicily and is monitoring the advancement of the program with reinforced meeting held bi-monthly with the Italian authorities.

1 ∙ ⸱ Final report on the audit of operations (Article 127(1) of Regulation (EU) No 1303/2013 — Procurement of goods and services — Phase II.

2 ∙ ⸱ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32013R1303