Who controls NGO funding
MEPs from Budget Control Committee insist for more transparency on grant beneficiaries
Maria Koleva, Brussels
10 February, 2017When it comes to grants of EU money, which in fact are coming from the taxpayers’ pockets, the society is always very sensitive. A conference held at the European Parliament in Brussels and organised by the Budget Control Committee debated on the budgetary control of financing NGOs from the EU budget with representatives from NGOs, the Commission and the ECA. As the chair of the session, MEP Markus Pieper, who is also rapporteur of an own-initiative report on the topic underlined, for the committee this issue is of huge importance as it is responsible for transparency in expenditure of the European money.For the Commission the role of the NGOs is essential not only in helping to implement EU policies but because they are very good think tank to help us to develop those policies, Victoria Gil Casado, head of unit at Central Financial Service, EC DG Budget, stressed. Over the years the EU executive has developed different modes of cooperation with them. All funding transactions to NGOs are published in the Financial Transparency System – FTS, she said. Victoria Gil Casado explained that there is no EU definition of NGO “because systems in the national legislation are so different that we concluded that it is almost impossible to provide definition and this has been acknowledged several times by reports provided to the Parliament”. The information Commission gives on NGOs is first based on self declaration by the entities that consider themselves NGOs. The two basic criteria are that entities are private and “non-profit” organisations. Out of €1.2bn funding, more than half has been attributed to so called ‘top 50’ entities. But there are nearly 900 entities to which were given 1,500 contracts, most under MFF heading “Global Europe”, she specified. The top programmes through which NGOs are helping the society are mainly in the area of humanitarian aid, but also of development aid, democracy and human rights, she pointed out. About 96% of the funding is in the form of grants for concrete actions. The Commission is proposing simplification of the procedure, particularly at the stage of submitting application, for example to limit the request for certain financial and administrative documents, as well to be facilitated the recognition of the costs for the work of volunteers. From the audience there was criticism that the distribution of grants from the coordinating NGO to consortium partners is not shown in the FTS. They also insisted for clear lists published online of all NGOs beneficiaries of grants, with name and addresses, as it is applied for the farmers. Others asserted that it is necessary to have stricter assessment of the results achieved by the granted projects.The FTS has limited utility as a tool for analysis of grant funding and the underlying system is a tool for tracking commitments for budgeting purposes and it does not indicate actual disbursements, finds a study on “Democratic accountability and budgetary control of non-governmental organisations funded by the EU budget”, commissioned by the EP. It also reveals that in order to understand relevant rules and obligations relating to EU funding, applicants generally need to consult multiple documents, some of which partly repeat themselves. Some EC departments make this information more accessible than others through clearer presentation on their websites. Rules vary somewhat between funding instruments, for example depending on target group or the objective of the instrument. According to the authors of the study, obstacles to locating and understanding rules are likely to make it harder for NGOs to comply with rules, and it undermines public accountability as it is harder for the public to understand the obligations to which NGOs have committed themselves. The authors of the study suggest that a single, centralised EC system for recording and managing grant funding would enhance transparency and analysis by eliminating variations that currently exist between different EC systems. The authors said as well that it is necessary for all EC services to agree on standard entity definitions, and then to apply them uniformly.