Suspension of ESF payments to the Calabria Region

Subject: Suspension of ESF payments to the Calabria Region

It has recently been reported that ESF payments to the Calabria Region have been halted by the Commission because of a number of irregularities detected in the system for managing and controlling public expenditure. According to the newspaper LaCnews241, the Calabria Region submitted two separate payment applications, one on 8 June and the other on 28 July 2021, which were not followed up. On 8 August 2021, the Commission then allegedly informed the Regional Government that the payments were to be suspended as a necessary precautionary measure following irregularities detected in ESF expenditure.

In view of this, can the Commission say:

1. what were the measures and/or operations, in detail, that were affected by irregularities leading to the halting of payments;

2. how much funding has been frozen to date;

3. whether the problems encountered in the programme’s control and management system, in both the managing authority and audit authority, are such that they might jeopardise the entire Regional Operational Programme in addition to future measures to be taken under the national recovery and resilience plan (NRPP)?

1 https://www.lacnews24.it/economia-e-lavoro/l-europa-blocca-i-pagamenti-alla-regione-calabria-irregolarita-

nella-gestione-dei-fondi-_144547/

Answer given by Mr Schmit on behalf of the European Commission

(9 March 2022)

On 31 August 2021, the Commission interrupted the payment deadlines for two payment claims submitted on 8 June 2021 and 28 July 2021, following the results of a Commission audit on the management and control system (MCS) of the programme.

The audit found some deficiencies in the functioning of the MCS for payment claim verifications by the Calabrian authorities for the European Social Fund (ESF) expenditure (2). The interruption concerned approximately EUR 68 million of ESF expenditure. This accounts for 3% of EUR 2.3 billion (3) for the whole programming period 2014-2020.

The interruption is a precautionary measure whereby the payment claims related to the ESF expenditure of the Calabrian programme are temporarily not reimbursed due to the presence of irregular expenditure.

In September 2021, the Italian authorities replied to the interruption letter and indicated the corrective measures implemented to address the issues identified by the Commission auditors. The Commission auditors have assessed the adequacy of these measures and issued the final audit report on 21 December 2021. Based on the result of this assessment, payments were released by the end of 2021.

The shortcomings identified by the auditors in the MCS impact only the expenditure declared for ESF operations. There is no indication that such problems may have a broader impact as at putting at risk the entire Regional Operational Programme or the future measures to be taken under the National Recovery and Resilience Plan.

⋅1∙ https://www.lacnews24.it/economia-e-lavoro/l-europa-blocca-i-pagamenti-alla-regione-calabria-irregolarita-nella-gestione-dei-fondi-_144547/

⋅2∙ In particular, these deficiencies concern the lack of adequate supporting documentation to justify the activity underlying the expenditure declared by some

employment centres in the implementation of operations.

⋅3∙ ESF EUR 400 million; European Regional and Development Fund EUR 1.9 billion.