Presse Information – 31.10.2023
The following text is copied from the Explanatory Statement (p. 14) of the European Parliament Committee on Budgetary Control’s draft report on the transparency and accountability of non-governmental organisations funded from the EU budget. Read the full document here.
Non-governmental organizations (NGOs) are instrumental in linking civil society with the political decision-making in all EU policy areas. They also play an important role in the implementation of the EU budget, either when they receive EU funds as direct beneficiaries of EU grants awarded by the Commission or when they receive EU funds indirectly from beneficiaries and partners that have a legal relationship with the Commission, across all budget management modes. According to the data published in the Financial Transparency System (FTS) of the Commission, the contracted amount of grants awarded from the EU budget to NGOs, after excluding EU programmes in the field of education and research, amounted to at least 2.6 billion EUR in 2022, under direct management and across all EU programmes and funds. However, the total amount of grants awarded to NGOs is likely to be higher (approximatively EUR 3.7 billion in 2022), due to the absence of an NGO definition and due to the lack of clear differentiation between NGOs and not-for-profit organisations (NFPOs) in the FTS.
Whereas transparency and accountability are basic principles enshrined in the financial rules governing the implementation of the EU budget and important factors of public trust, the analysis of the framework surrounding the implementation of the EU budget by NGOs reveals major shortcomings in terms of public transparency and accountability. Since only the funds directly awarded to NGOs are subject to monitoring and reporting by the Commission, the EU funds reallocated in the form of sub-granting, sub-contracting or shared within a consortium are difficult to track and are not published on public websites such as the FTS. As a result, control mechanisms aimed at ensuring that EU funds are used effectively, efficiently, and in accordance with the EU’s objectives, policies and financial rules are made difficult to implement, if not ineffective.
With a view to preventing and fighting against fraud and ensuring that EU funds are not used against EU values, public transparency and accountability requirements must be strengthened. It is of paramount importance to ensure that the contracted EU funds be tracked up to the final beneficiaries in a systematic and harmonised manner across information and transparency platforms at EU level and at the level of NGOs in the Member States. In particular, the EU Transparency Register should allow the traceability of funding sources, including EU funds, and provide greater transparency of registered organisations, thus contributing to avoid cases such as Qatargate. Furthermore, the funding of NGOs has to be made transparent from the source.
As recommended in previous years’ budgetary discharge resolutions, the adoption of a NGO Regulation setting up minimum requirements for NGOs across the EU (definition, access to funding, disclosure of sources of financing, independence from political influence and non-European interference, etc.) would provide a more sound budgetary control framework, allowing the NGOs to deliver their positive achievements with the outmost transparency and accountability.
EP Committee on Budgetary Control. Rapporteur: Markus Pieper
Read the full draft report here.