Following checks on SAPARD payments performed in 2004 and 2005, auditors of the European Commission recommended, in August 2007, financial corrections of EIR21.44 million, according to information provided by the Paying Agency for Rural Development and Fishing (APDRP), which manages SAPARD funds.
The recommendation was the subject of a conciliation process between Romania and the Commission, and in October 2008, the Commission proposed financial corrections of EUR13.96 million, the agency said.
The European Commission is analyzing the report of the conciliation body and will make a final decision regarding financial corrections, that could be lower than the proposed sum of EUR13.96 million.
According to sources within the Romanian paying agency, chances for Romania not to return any money are slim.
One of the measures in the SAPARD program is the development of rural infrastructure, and beneficiaries of funds are local authorities that draw up investment projects and works are contracted in public procurement auctions.
According to sources in the paying agency, the European Commission unfolded several audit missions in 2004 and 2005, and one of the most serious irregularities was the existence of conflicts of interests over rural infrastructure projects.
Financial corrections are applied if the Commission considers that EU laws have been breached within the program, resulting in risk for the EU budget.
This is the latest of a longer series of problems with the SAPARD program in Romania, after the EC halted payment reimbursements last year following an audit at the paying agency in July. The Commission required Romania to mend deficiencies by implementing an action plan, and said reimbursements would be resumed after an independent auditor confirms that deficiencies have been fixed.
The agency implemented a plan of action, an authorities resumed payments from the state budget within the SAPARD program. The financing system has the beneficiary receive funds from the national budget, which the EC later reimburses.
However, the plan of actions was considered unsatisfactory and reimbursements will not be resumed sooner than in three to four months, after the plan is redone and meets all the Commission’s requirements, Romanian agriculture minister Ilie Sarbu said recently.
The EC recently extended the SAPARD program for Romania by one year, until the end of 2009. If the extension had not been granted, all payments to beneficiaries after the deadline set for the end of 2008, would have been paid from the state budget and would not have been reimbursed by the Commission.
Financing contracts within the SAPARD program were concluded for 4,549 projects, requiring a total EUR1.4 billion in public funds (from the European Commission and the state budget). Payments so far amounted to EUR1.28 billion.